What are tenancy fees?

A. The Tenant Fees Act 2019 states that lettings agents and landlords are no longer allowed to charge tenants for reference and credit checks as well as the preparation of legal documents such as a tenancy agreement. The Tenants Fee Act 2019 has made such charges illegal and after a twelve month transition period, came into full effect from 1 June 2020.

The only fees that can be charged in connection with the tenancy are:

• Rent – chargeable in reasonable instalments (no upfront costs)
• A refundable deposit – preferably kept with a professional tenancy deposit scheme
• A refundable holding deposit – allows the landlord to take the property off the market for an agreed period
• Payments to alter the tenancy agreement – if the tenant wishes to make changes in the terms of contract before the present rental period expires
• Payments to terminate the tenancy early – applicable only if it is the tenant that wishes to moveout before the rental term expires

Any other fees will now be deemed as prohibited payments, and are not allowed under the new regulations. Administration costs are now expected to be absorbed by the landlord and should not be factored into any tenancy agreement as that would make the contract invalid. Of course, all other fees should still be included and it still makes sense to have a comprehensive legal document drawn up that covers all the details, responsibilities and penalties. Reputable lettings have invaluable experience in drawing up tenancy agreements and will guide you through the fine print, so as to ensure that all parties are fully informed of what they can expect to pay.

The Property Ombudsman also provides a free, fair and Independent service for dealing with unresolved disputes between member estate agents/letting agents and consumers who are landlords or tenants of residential property in the UK.