Letting fee refund is win for renters

Tenants should check the wording of their contracts, says the council, after a recent warning to letting agents saw £34,416 of unlawful fees and deposits refunded.

Published: Tuesday, 17th September 2019

The Tenant Fees Act 2019 came into force in June, banning most letting fees and limiting deposits, in most cases, to the equivalent of five weeks’ rent. But some agents have been slow to respond, continuing to charge admin and renewal costs deemed “unreasonable” by Government.

A wave of warnings sent over summer to all letting agents in the district saw some issue refunds, running to hundreds of pounds per tenancy. But fears persist that other agents could still be hitting renters with arbitrary charges for referencing, administration and credit and immigration checks.

Cllr John Donaldson, lead member for housing, said: “Government banned most letting fees because they were disproportionate, often poorly explained, and ultimately proved an obstacle to households in need of accommodation.

“I’m pleased to see that council officers have been monitoring local agents’ responses so closely in the months following the law coming into force.

“By taking decisive action early we have made it clear that non-compliance with this new legislation is not an option.

“As well as continuing our landlords forum - which helps local landlords stick to best practice - we will soon be ramping up our support for renters with the announcement of a tenants forum, set to begin this autumn.”

As of 1 June 2019, letting agents can only charge fees for renewing a tenancy if this is provided for in the previous tenancy agreement. If there is no wording suggesting that there will be renewal fee charges, then tenants should not be charged.

If a landlord has made a charge that is prohibited under The Tenant Fees Act 2019 in error, they have 28 days to make a refund, otherwise they could face a fine of up to £5,000. If a person commits a second offence within 5 years, it is deemed a criminal matter and a penalty of up to £30,000 is payable.

Landlords cannot issue a S21 notice, the first step towards evicting a tenant, while refunds for unlawful fees are still outstanding.

The Act also reinforces the importance of deposit protection schemes: failure to protect deposits in a Government-registered scheme means a court can order landlords or agents to return deposits and repay the tenant a sum up to three times the amount of the deposit.