The National Landlords Association (NLA) is trying to help buy-to-let investors prepare for the ban on tenant fees by introducing a new comprehensive guide that tenants can download.
The guide on the upcoming Tenant Fees Act, containing information that landlords need to know about the upcoming legislation, looks at some of the key changes.
The Tenant Fees Act 2019, which will come into play from 1 June 2019, applies to England only, although similar legislation is being introduced in Wales.
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 only charges permitted will be for replacement of a lost key or security device, and a charge when rent payments are at least 14 days late.
Landlords will also still be able to claim for damages where there is a breach of the tenancy agreement.
There will be a 12-month transition period for existing tenancies, which means that any tenancies agreed before 1st June 2019 will not be subject to the new rules until 2020.
However, all new tenancies from 1st June 2019 will need to comply with the regulations. You must make sure that any tenancy agreements are up-to-date and reflect the provisions around fees. NLA members can always access the most recent version of our Assured Shorthold Tenancy agreement via NLA Forms.
For landlords who are found to be in breach of the fee ban, a fine of £5,000 will be issued for an initial breach of the ban. It will be a criminal offence if an individual has been fined or convicted of the same offence within the last 5 years.
Alternatively, financial penalties of up to £30,000 can be issued by local authorities instead of prosecution.
For further advice on how to prepare for the ban on fees click here to download the guide.