It has been two years since the government announced that there would be a ban on letting fees, but what does this mean for landlords and tenants? At Lint Group we ensure our tenants are given the lowest letting fees possible and have always offered refundable holding fees, however this is not the case with many other letting agencies.
Many tenants have reported the abuse of fee charging within the property sector and this has spurred this new legislation change. In general, this has been welcomed, as the banning of letting fees has promised to make renting more affordable and to level the playing field between tenants and landlords. However, many are still sceptical due to the multitude of new rules that come with the introduction of this legislation.
So, what are the new rules?
- A ban on letting fees.
- A cap on tenant deposits equivalent to six weeks rent.
- Holding deposits to be capped at the equivalent of one week’s rent.
- Charged as a criminal offence a £5,000 fine will be imposed on anyone breaching the ban who can also face a £30,000 maximum penalty.
- The Consumer Rights Act of 2015 will be modified to make it clear that letting agent requirements for transparency will also be applied to online property portals like Zoopla and Rightmove etc.
- Trading Standards will be mandated to enforce the ban and also facilitate tenants to recover any fees unlawfully charged.
- Charges for a change in tenancy will be reduced to £50 (this might change if a landlord can prove that the costs related to the change of tenancy did exceed £50).
- Landlords will no long be able to claim possession of their rented property using Section 21 of the Housing Act 1988 until all unlawfully charged fees have been repaid to their tenants.
- Local authorities will be able to hold and utilise any finances gathered from penalties for use in future enforcement.
Additionally, landlords and agents are only to be able to charge for:
- The rental of the property.
- The tenant deposits.
- Any change in the terms of the tenancy, or early tenancy termination when the tenant has requested this.
- Council tax and other utilities.
- Costs or damages attributable to the tenant, or as a direct result of something a tenant has done, for instance, losing a key.
The biggest worry is that landlords will be forced to pass on the rise in their costs in the form of higher rents. In that case, is this really going to be a new dawn for renters?
Although the letting fee ban has not yet been implemented, at Lint Group we believe it is important for our tenants, landlords and partners to be aware of any potential changes in the property industry.
If you would like more information or feel you will be affected by the ban on letting fees, please do not hesitate to get in touch with Lint Group.
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