So as most of you in the property world will be aware the ban on charging tenants fees was announced in 2016 and is due to come into force in England either towards the end of this year or the beginning of next.
It’s fair to surmise though, that in due course Wales will probably follow suit !
There has been a lot of speculation surrounding exactly how these fees will be banned. However we now have some clarity following the draft bill being debated in Parliament.
Basically there will be a ban on ALL fees. This means, that as a landlord or a letting agent you will no longer be able to charge tenants any fees or charges on top of rent, other than reasonable default fees; for example late rent payments or a charge for replacement keys should your tenant lose theirs.
Some of the other changes include capping holding deposits at one weeks’ rent and limiting security deposits to six weeks’ rent, even if the tenant has a pet !
The ban will go even further and will prevent charging a tenant any third party fees; this means that any referencing companies cannot charge a tenant directly. This therefore takes away the option of requesting the tenant to present you with their own credit report !
It’s intended that this ban will apply to tenancies started after the ban comes into force although the date for this has yet to be confirmed. The ban will apply to all assured shorthold tenancies and licences but will exclude social housing, holiday lets, company lets, long leaseholds and non-Housing Act tenancies.
Once again the landlord seems to be in the firing line ! We think that this will potentially lead to tenants seeing an increase in the amount of rent that’s being charged for properties that are on the market. After all landlords will need to cover these costs in some way shape or form !