Tenants moved into my property on a tenancy dated before 1st June 2019, I am concerned I need to be taking action. What do I need to do to ensure I comply with the Tenant Fees Act?
The Tenant Fees Act 2019 took effect 1st June 2019, and applies to all Housing Act Tenancies that were signed on or after the 1st June 2019. The impact of this Act was to limit the proess of taking Holding Deposits, limiting the value of any Holding Deposit during the pre tenancy process and ensuring all parties understand the reasons for release or forfeiture of that Deposit. Once a tenancy is agreed the Act also determines the Tenant Deposit Cap at 5 weeks rent for most tenancies (i.e. those with rent < £50,000), and details a list of prohibited payments (i.e. Tenant fees that cannot be charged to tenants for a tenancy).
The Tenant Fees Act 2019, has a 'transition period' applicable to the implementation, and thus allows any existing tenancy to continue in accordance with its terms (as they were agreed on the tenancy agreement) until the end of the tenancy, OR 31st may 2020 whichever is earlier. For most tenancies in place prior to the 1st June 2019 therefore, they will be allowed to complete under the existing terms without the need for any 'Tenant Fees Act' related actions from any party. That is, the tenancy can continue holding larger deposits where these were applied on the Agreement, any fees detailed in the agreement will continue to apply to the tenants.
Should the tenancy continue under the existing terms beyond the transition period (i.e. after 31st May 2020), action will need to be taken to comply with the Act. These actions will include (not exhaustive):
- The release of any excess deposit beyond the 'Tenant Deposit Cap' applicable for the tenancy
- No fees will be chargeable to the tenant that are defined as 'prohibited payments' - for example: Arrears charges where they are not defined in accordance with the Act
Failure to take such actions will prevent the issuing of a Section 21 notice for possession until the 'prohibited payments' are returned to the tenants.
ludlowthompson have proactively managed the introduction of the Tenancy Fees Act into all tenancies for 1st June 2019 onwards, and the Property Management team can guide landlords and tenants on the regulations on new and older tenancies alike. For further information please contact your Property Manager.
19th June 2019
DISCLAIMER: Neither ludlowthompson nor their ‘experts’ take any responsibility for any action or loss incurred by readers of these pages. The reader acts on advice at their own risk. Answers to questions are not exhaustive. Financial advice must always be sought from a professional financial adviser
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