#AskTDS: “What is the Tenant Fees Act?”

Having received Royal Assent in February 2019, the Tenant Fees Act, will become law from 1 June and affect tenants, landlords and letting agents in England. The Act will apply to all new tenancies and renewals from this date onwards. 

In April it was announced that the Wales Fees Ban will come into force in September 2019. We will continue to update our members and customers on the legislation in Wales as it progresses. 

What is the Tenant Fees Act?

The new law essentially means that many of the administrative costs associated with a new tenant moving in to a property cannot be passed on to the tenant. This includes charges such as reference checks and professional cleaning services. Landlords are still entitled to charge for rent, bills, TV licenses and payment towards council tax. Breaching the new law will be treated as a civil offence and could result in a fine of up to £5,000 – so it’s crucial that all parties are aware of their rights and responsibilities. 

How can letting agents and landlords prepare for the Tenant Fees Act?

There is a wealth of advice to help landlords and letting agents prepare for the impact of the new legislation. For example, the recently published guidance about inventory reports, produced by TDS, Propertymark and the Association of Independent Clerks (AIIC), provides best practice advice for landlords and letting agents and is designed to reassure landlords worried about the impact of the Tenant Fees Act. 

TDS has also launched DepositCap.com, a suite of online tools including a Deposit Cap Calculator. The free online resource centre comprises of a graphical timeline, example scenarios, guides, information and other tools to help provide clarity on how the Tenant Fees Act will affect letting agents and landlords. 

The best way for landlords and letting agents to prepare for the new legislation is to read and understand the wealth of information provided by reputable sources. Then they can make informed business decisions about the likely impact the Tenant Fees Act will have. 

Agents and landlords can also get the latest information and guidance on the Tenant Fees Act via TDS’ Deposit Cap Bulletin. 

How can tenants prepare for the Tenant Fees Act?

Tenants are being encouraged to be diligent when signing tenancy agreements. Anything on top of a deposit, rent and bills should not be included in the cost of renting a property – including services which take place before the tenant has moved in. Ensuring a tenancy agreement is thoroughly studied prior to signing is important for both parties – as well as minimising the risk of dispute later on, with the new Act coming into place it’s vital that all parties remain within the law. 

How does the Act affect tenancy deposits?

The Act also means that landlords and letting agents won’t be able to take any more than the equivalent of five weeks’ rent on tenancies where the rent is below £50,000 annually and six weeks’ rent on tenancies with a rent of £50,000 and over annually. You can find out more about this on TDS’ suite of online tools at depositcap.com, which includes a deposit cap calculator.

TDS have also created a Deposit Cap bulletin to keep landlords and agents up to date as we learn new developments of the incoming legislation.  Sign up to receive these alerts. 

Further information and advice on the Tenant Fees Act can be found from our partner organisations ARLA and RLA.

About TDS

Tenancy Deposit Scheme (TDS) is a Government-approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.

We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.

TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.

TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.

TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.

TDS Northern Ireland: TDS is Northern Ireland's leading and only not for profit tenancy deposit protection scheme.

TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.

These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.

ARLA|Propertymark: For agents who would like to stay up to date, you can contact Propertymark | ARLA at: join@propertymark.com. By being a member of Propertymark | ARLA you will be eligible for TDS Insured best headline rates.

RLA: If you are a landlord and would like to keep up to date with any changes that may affect you or your responsibilities, you can contact the RLA at: info@rla.org.uk and quote reference: dg715 to receive 25% off your first year's membership.