With the upcoming tenant fee ban edging ever closer, landlords are looking for as much information as they need to ensure that the new laws will work out for them and their tenants. The government has published the statutory guidelines on the new regulations, targeted towards landlords, tenants and letting agents.
The new regulations come into force on the 1st June and will affect tenancies starting on, or after, that date. However, existing tenancies will still be subjected to fees until 1st June 2020 which is when the regulations will cover all tenancies.
The government said that the purpose of the act was to reduce the costs that tenants can face at the outset and throughout their tenancies and is part of a wider package of measures that rebalance the relationship between tenants and landlords.
The key takeaway points from the guidelines were that landlord and agencies cannot require a tenant to make certain payments in connection with a tenancy nor can they require them to enter a contract with a third party or make a loan in connection with a tenancy.
The only fees permitted under the tenant fee ban include, but are not limited to, a refundable tenancy deposit that should not amount to more than five weeks’ rents, a refundable holding deposit that is capped at one week’s rent and a default fee for late payment. Any fee charged to tenants that hasn’t been included in the list will be classed as an unlawful payment.
The news has obviously been welcomed by tenants, with many burdened by the large number of upfront costs when renting a property. It will also help to deter any rogue landlords who intend on making profit off tenants through unfair charges.
The new laws were not as welcomed by landlords and agencies. Landlords were concerned with how these new laws will affect them financially, many have chosen to increase their rent and others have even opted to leave the private rental sector all together. However, many organisations are coming up with various resources to help landlords and letting agents prepare.
A regulatory body for letting agents, ARLA Propertymark, has introduced a ‘Tenant Fee Ban Toolkit’ which features fact sheets, videos and templates for legal documents. There have also been various resources produced by portals like Rightmove and government websites.
Heather Wheeler, a minister for housing, has advised that there will be more documents being produced in the coming months to level the playing field for tenants, agents and landlords.
She said: “We are only looking to push rogue landlords out, we want the rest to make money. I appreciate the tax changes coming with these regulations is a little bit of a double whammy, but things needed to change. This is a business that is for the long term, people should carry on investing in it.”
The tenant fee ban will certainly shake things up in the PRS market but, if it plays out like the government hopes, it will benefit tenants and if landlords utilise the resources available to them in the run up to the laws coming into effect, they should find very little difference in their income from their rental property.
Are you a landlord looking for more information on how the upcoming ban might affect you? Call or email the Intus Lettings team today who will be able to assist.