12th February 2024
What Fees are Landlords Allowed to Charge a Tenant?
The Tenant Fees Act 2019 was implemented to protect tenants from unfair fees charged by landlords and letting agents. As of June 2020, many fees and charges have been prohibited.
Please note: the following guidance applies to England only. Welsh law is covered by Renting Homes (Fees etc.) (Wales) Act 2019.
What fees are landlords prohibited from charging tenants?
1) Saturday move-in fees
2) Reference fees
3) Admin fees
4) Check-in/check-out fees
5) Negotiation fees
6) Invoice charges
7) Late payment of rent fees
If a landlord is charging a fee which is similar to one on the above list, it is likely a prohibited payment, which is illegal.
What fees are landlords permitted to charge tenants?
1) Holding deposit (to reserve a property)
A maximum of one week’s rent and can be held for 15 calendar days. If a tenancy agreement is signed, the holding deposit must be returned to the tenant within 7 calendar days.
The landlord can keep the holding deposit if the tenant:
- pulls out before the 15-day deadline
- fails Right to Rent checks
- provides misleading or false statements on the application form.
2) Tenancy deposit/ security deposit
The maximum amount for a refundable tenancy deposit depends on the annual rent:
- less than £50,000 = five week’s rent
- move than £50,000 = six week’s rent
The landlord must:
- Protect: The deposit must be protected with a Government-backed tenancy protection scheme within 30 days of taking the payment.
- Inform: Tenant must be provided with information about where and how their deposit is protected.
- Record: The deposit is the tenant’s money, and the landlord will need to provide evidence to substantiate any claims against the deposit at the end of the tenancy.
If a landlord does not protect the deposit, a tenant can seek up to three times the amount back in Court.
3) Pet deposit
As stated above, the total deposit taken cannot exceed five or six weeks’ rent. If the landlord has taken the maximum tenancy deposit, further money towards a pet deposit is prohibited.
4) Interest on late payment of rent
If the tenant is at least 14 days late with payment, interest can be charged at a maximum of 3% above the Bank of England base rate (currently 5.25%) for each day until the arrears are paid.
5) Deposit deductions for dilapidations
If a tenant is in breach of their tenancy obligations, a landlord can deduct payments from the deposit.
The landlord must provide evidence that:
- An obligation in the tenancy agreement had been breached
- Financial loss has been suffered
- The deposit can be used against loss
6) Deposit deductions for rent arrears
Landlords can still claim for this.
7) Early termination costs
If the tenancy is terminated early by the tenant, landlords can charge a fee provided that the fee does not exceed:
- the loss suffered in permitting the tenant to leave early
- the reasonable costs that have been incurred in arranging for the tenant to leave early.
8) Amendments to the tenancy agreement
Charges can be levied for any variation, assignment or novation of the tenancy (such as change of sharer or request to have a pet), but this is capped at a maximum of £50 (inc. VAT), unless the landlord can show that greater costs were incurred.
9) Lost keys
Only a reasonable cost for replacement can be charged. evidence must be provided through invoices/ receipts.
If the fee a landlord is charging is not on this list, it is likely a prohibited payment which is illegal. If you are uncertain as to whether a charge is permitted, or for any advice on landlord/tenant matters, our litigation team is readily available for consultation.
For more information, email email@example.com or call 01892 510 222