Tenant Fees Act 2019 now catches existing lettings

The Tenant Fees Act 2019 (“Act”) came into force on 1 June 2019 and initially applied to tenancies commencing from that date onwards. There was a one year grace period for tenancies that started before 1 June 2019, however, as of 1 June 2020, the prohibitions under the Act now apply to all tenancies falling under the following categories:

• Assured Shorthold Tenancies (except for social housing and long lease tenancies)
• Student lettings
• Licenses to occupy housing

Prohibited payments

The Act sets out certain payments that a landlord or letting agent can request from a tenant, their guarantor or person acting on their behalf (“relevant persons” under the Act). Any other payments are deemed “prohibited payments”. These include:

• Tenancy set-up fees
• Inventory check fees
• Credit check fees
• Check out fees
• Professional cleaning fees

Landlords and letting agents are also restricted on the amount of deposit and holding deposit they can request and it should be noted that slightly different rules apply depending on whether it is a landlord or letting agent asking a relevant person to make a prohibited payment.

Any term in a tenancy agreement requiring a prohibited payment will not be binding on the tenant, although the rest of the tenancy will still have effect.

Sanctions

The sanctions for breach of this Act are a financial penalty of up to £5000 for each breach (ie each request for a prohibited payment). Even more seriously, a criminal offence is committed if the landlord or agent commits a further breach within 5 years of a financial penalty being imposed, or if convicted of an offence for an earlier breach. This is a banning order offence and can carry an unlimited fine.

A landlord in breach of the Act is also prevented from serving a section 21 Notice and using the fast-track termination procedure to regain possession of the dwelling.

Landlords and letting agents should check tenancies, which were granted before 1 June 2019 to ensure that any prohibited payments are returned to the tenant and that any new requests for payment comply with the Act.