Every year, renters would have to pay an arm and a leg on Letting Agents Fees, but not for long! A draft bill, along with a six week industry consultation, was put to Parliament on November 1st 2017 to ban these fees. This outlines the governments approach to banning the fees for tenants helping bring an end to all those costly upfront payments. I should mention Before going any further that the new bill would only come into force for those renting in England. Letting Fees are already banned in Scotland.
But what are the fees for exactly?
When a landlord uses an agent to rent a property, that agent then charges the landlord a number of fees for their service, such as a Tenant Reference fee, Inventory fee and then the agents own admin fee. Nearly all of these fees are then passed on the tenant. This can put a big strain on the tenants, as they would have to pay a few hundred pound in extra charges when signing for a property, on top of their security deposit and rent. This means that some tenants are having to borrow this extra money in order to move. Under the new rules, tenants will only be able to be charged for rent, deposit, and contracted default penalties.
However, anyone renting from a private landlord usually pay very small fees, if any at all! We had this in mind when developing Reoli. We want to help Landlords and Tenants not only save some time but, more importantly, money.
The government has already introduced measures so those few little rogue landlords don’t ignore their responsibilities. Earlier in 2017, the law changed to allow councils to dish out fines as an alternative to prosecution for a range of housing offences. So, for example, the first offence would be classed as a ‘Civil Offence’ and carries up to a £5,000 fine. If the same offence is then repeated within 5 years it would then be classed as a Criminal matter or a civil penalty of up to £30,000 is issued.
So when does the ban come in?
A ban on letting agents fees was previously proposed in 2016, then the Queen mentioned it during her June 2017 speech and it was also a pledge in the Conservative Manifesto during the snap General Election but has yet been passed in Parliament, although Spring 2019 is rumoured as the proposed time.
Wales on the other hand are still going through the consultation process. Initial research into this suggested a ban on the fees for the tenant would be beneficial.