London Landlords – Ready For Tenant Fees Act?
It is vital landlords remain up to date with lettings industry regulations. The pace of changes and updates in the industry has challenged many landlords. There has been anecdotal evidence some landlords have left the industry due to the pressure they face. However, with demand for rental property high, we believe there is an excellent opportunity for London landlords.
At Fortess Homes, we aim to provide you with support and guidance. If you want to let your property with confidence, rely on us. The Tenant Fees Act comes into force on the 1st of June, and we are here to help you update your records and ensure you make informed decisions.
Do you know what you can charge tenants?
The Act impacts landlords operating in England and affects fees paid concerning the rental period. Landlords will find that many of the fees they imposed on tenants will no longer be valid. A landlord, after the Act is introduced, will no longer be able to charge for vetting tenants or impose a fee for inventory tests. Landlords cannot charge a fee for the check-in or check-out process, and landlords are no longer allowed to charge inventory fees. Third-party fees, such as gardening or cleaning services, are no longer permissible under the new Act.
Landlords can charge:
- Monthly rental fees
- A fee where the landlord has incurred a charge in their duties, but only to the level of the cost
- A fee when the tenant wishes to change the rental agreement
- Holding deposit
- Security deposit
- Utility bills as applicable
An example of a charge that incurs a loss to the landlord would be when the tenant loses their key, and the landlord has to get a new set cut. The landlord can pass the cost of this service on to the tenant, but they cannot charge an additional fee. Therefore, landlords should retain receipts for these moments, so as they have evidence of the cost the tenant is due.
You can charge for some services
If the tenant wishes to leave the agreement early or switch names on the rental agreement, the landlord can charge a fee. However, the landlord can only charge for lost income, not an additional cost. If a tenant leaves the property with two months of the agreement to run, and the landlord places a new tenant into the property in one month, the former tenant is only responsible for the lost month of rent.
There are some interesting aspects for the holding deposit regulations, including:
- The holding deposit cap is equivalent to one weeks’ rent
- The landlord has 15 days from accepting this deposit to decide if the applicant can live in the house
- If the application is unsuccessful, the landlord should return the deposit in seven days
- If the tenant provided false information, fails any relevant test or doesn’t provide relevant information, the landlord doesn’t have to return the full deposit
- If the application is successful, the landlord should return the holding deposit in seven days, or this money should be used towards the security deposit or first months’ rent
For the security deposit, the new cap is five weeks’ rent, when the annual rent is less than £50,000. If the yearly rent is £50,000 or more, the new cap is six weeks’ rent.
If you are a London landlord and you need assistance in dealing with the Tenant Fees Act, contact Fortess Homes, and we will help you out.