Tenant Fee Ban & Rental Guide

Prinsegate

Prinsegate

Chartered Surveyors

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This guide is for tenants and landlords in the private rented sector to understand their rights and responsibilities. It provides a checklist and more detailed information on each stage of the process, including:

  • what to look out for before renting
  • living in a rented home
  • what happens at the end of a tenancy
  • what to do if things go wrong

The newest version of this guide can be downloaded here.

The guide was created following the Deregulation Act 2015 and needs to be legally given to all tenancies starting or renewing their tenancy after October 2015. The main change with the newest version of the guide is the mention of the tenant fee ban, which came into place on June 1 this year; the deposit cap to 5 weeks rent, rather than 6 weeks. It will remain 6 weeks deposit where the annual rent exceeds £50,000; last but not least, the new guide mentions the alternative schemes to a deposit. One example of this is ‘Zero Deposits,’ which is FCA regulated and the only scheme approved by the Residential Landlords Association. Read about it here.

The tenant fee ban was put into place due to a small portion of unscrupulous agents who would charge up to £1000 per tenancy for a mixture of references, contract drafting, guarantor agreements, contract renewal, etc. With the tenant fee ban, the agent can not charge the tenant any fees. What is expected in the industry is that landlords will bear this cost and potentially raise their rents to cover the extra amount.

What schemes like ‘Zero Deposits’ offer insurance for the tenants, which would ensure the landlord is covered in a similar way to when they would have a full deposit, but the payout process could be a lot quicker. It also means that tenants would have to find less money upfront, which in many cases was preventing them from renting something they could afford, but only after their original deposit was refunded back to them. Schemes like Zero Deposits charge the tenants the equivalent of one week worth of rent, which is a much lower upfront cost.

There have also been a few changes to the Section 6A (Former Section 21) used in evictions; this now refers to the tenant fees being banned – as it cannot be used where fees have been taken – it also cannot be used where the property is an unlicensed HMO, where it should have been licensed but hasn’t.

For these reasons and many more, one should ensure that tenants are provided with the correct paperwork and that it’s done correctly if you’re letting out your property. The alternative is to use a reputable agent to do the paperwork for you and ensure it has been done correctly.

At Prinsegate, we are first and foremost chartered surveyors, but we do offer property management & tenancy contract drafting services, as well as project management for your build. If you would like to find out how we could help you contact us and one of our friendly team will assist you. 

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