26 Jun Tenant Fee Ban: Everything You Need To Know
What Is The Tenant Fees Act?
Essentially the Tenant Fees Act bans most letting fees and caps tenancy deposits paid in the private rented sector in England.
The Landlord Guidelines For New Contracts:
As from June 1 2019, the only payments Letting Agents and Landlords can charge to tenants with new contracts are:
- Their rent payment
- A refundable tenancy deposit which is capped at five weeks when the annual rent total equals less than £50,000 or six weeks rent where the total annual rent is equals £50,000 or above.
- A refundable holding deposit which is used to reserve a property that is capped at no more than one weeks rent.
- Any payments involved with the early termination of the tenant – when it has been requested by the tenant.
- Payments in relation to utilities, communication services, TV license and Council Tax
- A default fee for late rent payment, replacement of a loss of keys or security device, when required under a tenancy agreement
The Next Step For Agents and Landlords Generating Business Following The Ban
- Given the Tenant Fees Act, Agents are urged to try and expand the services that they can offer to their clients in order to make a profit over an area that they can no longer generate money from. This could be offering in-depth property surveying of a home or office space when someone requires to view it.
- Letting Agents could also expand their expertise and knowledge of the property mark and work out an area that they can offer the extra mile that other agents can’t offer and ultimately means that they stand out from the competition.
- Another way of Agents generating business following the ban is to really stress the need for Tenant Referencing. A Tenant Reference check is carried out by a Letting or Estate Agent on behalf of the Landlord. The Reference checks if you have any County Court Judgements, your income/credit checks to ensure that you can afford your rent payments, your employment history and any previous Landlord reference on your tenancy before you sign the deal.
A Tenant Referencing check simply proves your eligibility to rent the chosen property and generally in most cases, people do pass it.
Another way of preparing for extra business following the new law is for Landlords and Agents to stress the Rent Guarantee Insurance, which is in place to confirm the chances of your credibility for paying your monthly rental payments to whom you owe the payment to. You can take out a Rent Guarantee Insurance with us here at Van Mildert that offers you:
- No excess
- Up to £8,333 of rent cover per month until the vacant possession
- Legal expenses of up to £50,000 for eviction of a tenant and the recovery of the cost of any repairs to the property
- 50% of the rent paid for up to two months after vacant possession if the property is being repaired as a result of damage which the tenant has done
- A two hour service level on the issuing of eviction notices
- A claims system which is fully integrated into your lettings software
If you have any lasting enquiries regarding the Tenant Fees Ban Act or you are a Landlord yourself and would like to discuss our Rent Guarantee Insurance or Tenant Referencing checks then please do not hesitate to get in touch and give us a call on 0191 256 0920 and a member of our expert team would be more than happy to assist with your enquiry!