Letting agent fees

After several years of consideration and planning, the Government has decided to end letting agent and landlord fees for tenants. The Tenant Fees Act aims to protect tenants from excessive cost of tenure by banning most forms of fees and capping all forms of deposits required from landlords and letting agents.

We advise all tenants to carefully review the guidelines provided by the Government – Tenant Fees Act 2019: Guidance for tenants. All legal fees, charges and deposits are outlined in the list below:

Fast facts

  • Rent as listed in the tenancy agreement
  • Refundable tenancy deposit (security deposit) – capped to 5 weeks worth of rent where the total annual rent is less than £50,000. Higher value property landlords can charge up to 6 weeks worth of rent.
  • Refundable holding deposit – capped to 1 week worth of rent.
  • Charges for amending the tenancy agreement as requested by the tenant – capped to £50, or a reasonable sum, where the landlord can prove they have incurred additional costs.
  • Charges for early termination of the tenancy as requested by the tenant – an appropriate amount to compensate the landlord based for their losses.
  • Charges for household utilities – electricity, gas, heating, communication services, TV license, council tax and other related.
  • Charges for breaches to the tenancy agreement – late payment of rent, replacement of keys, etc.

All letting agent or landlord fees outside of the above list are considered illegal after the introduction of the Tenant Fees Act. The new legislation will apply for England only.

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When does the Tenant Fees Act come into force?

The regulations will come into force for new tenancies starting June 1st, 2019. If you sign a private tenancy agreement, student let or license to occupy a private property after this date, your landlord or letting agents cannot charge you any fees outside of the aforementioned list.

Tenancies started before June 1st, 2019 will continue to use the previous legislation, and therefore landlords and agents will be able to charge fees like administration, inventory reports and renewal of tenancy agreements.

From June 1st, 2020, the new regulations will come into force for all private tenancies, regardless of their starting date.

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Which letting agent and landlord fees are getting banned?

A number of letting agent activities are currently being paid by tenants, even though they mostly serve the benefit of the landlord.

Due to the previously loose regulations, these can go by many names, including:

  • Administration fee
  • Tenancy renewal fee
  • Check-in / check-out fee
  • Tenancy inventory fee
  • Tenant background check / Tenancy referencing
  • Right to rent check fee
  • Guarantor background check / Guarantor referencing
  • Deposit protection fee
  • Application fee

All of these fees will become banned after June 1st 2019, meaning agents and landlords can no longer require tenants to pay or make contributions towards completing the activities. Agents can still ask landlords to cover the expenses.

Some existing charges, where the tenant introduces changes to the tenancy agreement or does not adhere to their responsibilities will remain legal.

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If you believe you have paid illegal fees

In the cases where your landlord or letting agent has collected a payment from you, which is not on the list at the top of this page, the Government recommends the following action plan:

  1. Read the document – Tenant Fees Act 2019: Guidance for tenants. Make sure you understand your rights and the scope of the new regulations.
  2. Write to your landlord and letting agent, requesting the sum returned to you. In the link above you’ll find a template for the letter.
  3. Write to any redress schemes or voluntary associations the landlord or letting agent may be enlisted in. They will provide assistance and mediation in resolving the dispute.
  4. Contact your local council and ask for help. They have a department which is responsible for enforcing the law and help you defend your rights as a consumer.
  5. As a final option, you have the choice to seek justice in courts. The First-tier Tribunal is the most accessible court of law for tenants and will offer a simplified procedure which you can usually follow without a solicitor. Your local council should offer assistance and guidance for using the First-tier Tribunal.
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How to complain against my letting agent?

Every letting agent must be registered with one of three property redress schemes. The correct scheme must be prominently displayed on their website by law.

To complain against your letting agent, you should begin by contacting the redress scheme and asking them for help to resolve the problem. In this case, you can ask them to review the fees you’re being or have been charged and check whether they are legal or not.

The redress scheme should help you communicate with the agent and get their willful compliance. More information on property redress scheme is available in our dedicated guide – Complaints about letting agents

If no informal resolution is possible, please contact your local council. They will direct you to the proper department which handles letting agent fees – usually the Trading Standards.

From there on, you will receive instructions and assistance on how to seek justice from your letting agent and recover unrightfully collected fees and deposits.

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How to complain against my landlord?

Landlords are not required to participate in mandatory redress schemes. However, many of them are members of either the National Landlord Association, the Residential Landlord Association or another similar body.

Contacting such an organization may be fruitful as they will commonly assist you, where you can prove their member is breaking the code of conduct they work by.

Otherwise, you need to contact your local council and seek their help in resolving the problem.

In either case, you have the option to go to court, but you must use that only when all other methods fail. Also, please seek professional advice before you engage in legal action. Failure to prepare for court may result in losing the case and incurring the legal bills.

More information is available in our dedicated guide – Complaints about landlords

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New Section 21 rules

The new regulation also creates a new rule for using Section 21 Notice to Quit against tenants. Your landlord cannot serve a valid Section 21 notice if they have collected illegal fees, charges or excessively large deposits which do not appear on the list.

Therefore, your landlord cannot evict you for seeking justice against their misconduct. A landlord can only regain the right to use Section 21 notice after repaying all unrightfully collected fees and deposits.

All existing regulations regarding the use of Section 21 Notice to Quit remain in force. Please see our updated guide here – Section 21 Notice to Quit

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Consequences for not adhering to the Tenant Fees Act 2019

Landlords and letting face fines of £5,000 for each offence of the Tenant Fees Act 2019. A second offence will make them liable for a financial penalty up to £30,000. Of course, all unrightfully collected fees and deposits will be returned to the tenant immediately.

Letting agents who are not part of a redress scheme also face a fine of £5,000 under the Consumer Rights Act 2015.

Where tenants suspect their landlord or letting agent is exceeding their rights and taking money which doesn’t legally belong to them, it’s advised to collect and organize all available records and proof including:

  • Tenancy agreement, student let agreement and other forms of contract
  • Supporting paperwork, addendums, etc.
  • Receipts, invoices and banks statements for payment you’ve made
  • Communication with the landlord or agent – emails, letters, text messages

Those will be needed to prove your case where necessary.

Disclaimer

This article is provided as a guide. Any information should be used for research purposes and not as the base for taking legal action. The Tenants' Voice does not provide legal advice and our content does not constitute a client-solicitor relationship.

We advise all tenants to act respectfully with their landlords and letting agents and seek a peaceful resolution to problems with their rented property. For more information, explore the articles in our Rights and responsibilities category.

The Tenants' Voice works in conjunction with Deposit Recovery Claims to assist tenants.

If you experience problems with your tenancy deposit, have disrepair in your rented property or suspect that your landlord should have a licence to rent your property but does not have one then you can receive a free consultation by calling our advice service: Call Tenant Assist on 0333 344 3788.

For more ways to reach us, please visit our contacts page.