Lettings

Landlords are you ready for the Tenant Fee Ban?

Lettings | 09/03/19   Joscelyne Chase

Further changes are on the way for all landlords and letting agents that will affect the process of letting property, many of you may have already followed the proposed introduction of the Tenant Fee Ban and its consequences going forward.

It was first announced in the Autumn Statement on 23rd November 2016 and in May last year it was introduced to parliament. It has been a lengthy process going through the various stages as of February it has been passed into law as the Tenant Fees Act 2019 and the Housing Minister in the House of Lords made his statement revealing that from the 1st June 2019 all new and renewed tenancies will come under the scope of the new ban and all existing tenancies will be brought under the new rules from 1st June 2020.

 "Here at Joscelyne Chase we have as you would expect followed this with interest together with our governing body Propertymark (ARLA) and although we still await the formal guidance from Government  it has been imperative that we act now to implement these new regulation". Yvonne Crane (Senior Property Manger)

What will the ban include?

Applicants/tenants currently across the industry pay upfront for application/referencing fees together in some cases for check in/check out and inventories all this will stop from June including renewal charges which in most cases are picked up by the tenant also.

Incorporated is the restriction on the amount of the Tenancy Deposit held and collected, this is a permitted payment however limited to a five week rent amount from June, no additional amount can be taken i.e. for pets or by special request from the landlord. This will also cover existing tenancies and if the amount of deposit is above the five week limit, the excess will have to be returned at renewal or before. All deposits are now registered with one of the governments recommended bodies ie TDS, DPS or My Deposits. We are awaiting further guidance from these companies to how complex this process will be, all deposits with us are registered with the DPS.

A Holding Deposit will be allowed to be taken of one weeks rent at application which will show a commitment from the applicants whilst the referencing is carried, there will be only 15 days from this point to process and produce documents and for them to be signed.

Enforcement and Penalties:

The Bill places a duty with Trading Standards/Local Authorities to recover unlawfully charged fees by landlords or agents and can lead to not being able to serve a Section 21. A breach of the fee ban will fall under a civil offence with a financial penalty of up to £5000 successive breaches would be a criminal offence with an unlimited fine or the Enforcement Authority which may impose a financial penalty of up to £30,000 as an alternative to a criminal prosecution.

Will these new regulations affect you as a private landlord? 

Yes they will and the penalties apply regardless even if you have just one property but be warned if you have a portfolio of properties the penalties will escalate very quickly. This is where Joscelyne Chase as professional long established company can be of service, with qualified experienced staff on hand to offer a fully managed service taking care of every aspect and ensuring you are fully compliant. Since 2018 landlords have had no fewer than 18 new legislations directed at them from smoke and co alarms to HMO’s and Right to Rent checks. We are constantly ensuring we continue to offer a professional service that Joscelyne Chase landlords expect giving them peace of mind when instructing us as their agent.

Whilst this is an initial brief outline of what’s to come, we are already preparing revised documents, tenancy agreements, application forms, working practices and staff training. We are considering the cost of these changes and undoubtedly this will impact on ‘the landlord’ as we look at a breakdown of fees and the way we charge for our services  many of which have previously been directed at applicants and tenants.

We will be offering new fees with a Marketing and Tenant Introduction charge to landlords of just £722.00 Inc vat! Costings on all other services will be clear and precise. On the plus side it is generally felt within the industry that rents will increase, with no doubt fewer properties available and to balance the increase in fees for landlords, it will be interesting to monitor the market over the next 12 months.

We invite all landlords to have the opportunity to discuss with us in more detail the new legislation and how we can be of service.

Last modified on 29/03/19