The Tenant Fees Bill, banning landlord and agents from charging fees to tenants, has become an Act of Parliament after being given Royal Assent.
The act means that from 1 June 2019, landlords and agents will no longer be able to charge fees to set up or renew a tenancy in the private rented sector.
The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in England.
There will also be a cap on the amount of refundable security deposit a tenant would be required to pay to the value of five weeks’ rent as well as a cap on the amount of holding deposit a tenant will be required to put down to secure a property to the value of one week’s rent.
The government believes that the Bill will make renting properties in England fairer and more affordable for tenants by reducing the costs at the outset of a tenancy, at the same time as improving transparency and competition in the private rental market.
David Cox, chief executive, ARLA Propertymark, commented: “We’ve known the tenant fees ban has been coming for a long time, but with only 109 days to go until it comes into force, the industry must start taking time to prepare.
“The government will soon publish its guidance now that we have legislative certainty, which will give agents a better understanding as to how the ban should practically be implemented.”
Under the terms of the new Act, the maximum amount that can be charged for a change to a tenancy is £50. Any landlord breaching the ban for the first time will be hit with a £5,000 fine.
Housing and Communities Secretary James Brokenshire said: “Tenants across the country should not be stung by unexpected costs from agents or landlords.
“This Act not only delivers on our promise to ban letting fees but also caps deposits at 5 weeks’ rent and sets out how and when landlords can charge tenants fees – helping renters keep more of their hard-earned cash.
“This is part of our ongoing action to make renting fairer and more transparent and make a housing market that works for everyone.”