Only 3 more weeks to go until the tenant fee ban comes into play. So do you know what you can, and can’t charge for?
What about the exemptions?
Holding deposits, rents, deposits and charges for defaulting on the contract, are all exempt from the tenant fee ban.
But do also note, that all these 4 exemptions are still subject to additional restrictions as part of the legislation.
• Holding deposits – limited to a maximum of 1 weeks rent, plus additional legislation on the repayment of this should the tenancy not go ahead
• Rent – ban on setting rent at a higher level for the first portion of the tenancy then dropping it down afterwards
• Deposits – limited to 5 weeks rent as a maximum amount for tenancies where the annual rent is below £50,000. Above £50,000, limited to equivalent of 6 weeks rent
• Tenancy breaches – deposit deductions for damages, reasonable charges for loss of keys, 3% above BOE for late rent payments and no charge for sending reminder letters (current legislation draft)
Another area where we are getting a lot of queries about is the deposit being held for current tenancies. Here is some information on this issue…
You may be aware that the amount of deposit that can be taken from a tenant at the start of each new Assured Shorthold Tenancy (AST) and the renewal of all existing tenancies will be capped in England as part of the Tenant Fees Act 2019. The Act sets a limit on most residential tenancy deposits of the equivalent of five or six weeks’ rent (depending on the annual rent charged).
New regulations state that from 1st June 2019 the total deposit that can be requested and taken from a tenant will be as follows:
• Where the annual rent is up to £50,000, a maximum of 5 weeks’ rent
• Where the annual rent is over £50,000, a maximum of 6 weeks’ rent
From 1 June 2019…
- The cap on tenancy deposits will apply to new applicable tenancies. This includes assured shorthold tenancies, tenancies of student accommodation and licences to occupy housing in the private rented sector in England, and
- The cap also applies to fixed term contracts which are renewed for another fixed term – even if this is at the same property – as they will be a new applicable tenancy. You will be required at this point to repay the amount of the deposit held which is over the five (or, where appropriate, six) week cap. The cap will not apply to tenancies which continue as a periodic (statutory or contractual).
As always, any questions or you simply need to discuss these updates, please do not hesitate to contact Elite Property.