The Tenant Fees Act 2019 (‘TFA 19’) – more restrictions for residential landlords

Wednesday 31st July 2019

The 1 June 2019 was not a good day for residential landlords with The TFA19 coming into force.  The TFA19 restricts what landlords and agents can charge tenants before and during a tenancy.

Intended to help tenants, it’s inevitable that the new rules will just result in landlord’s increasing rents to reflect the increase in management costs, which can no longer be recovered directly from the tenant.  Long term market rents will simply go up, so tenant’s won’t even be able to challenge any new rents via the First Tier Tribunal (Property Chamber).

The new changes include restrictions on deposits, charges for lost keys/security devices and late rent payments.  Fees for credit checks, professional cleaning and inventory checks are now banned.  Other listed charges must be put in the tenancy agreements and must be reasonable, but there is some detail to this so any landlord should check before preparing a tenancy agreement. For example limited charges for variations, assignments, novation or for early termination.

There is a transitional period where any provision in a tenancy agreement signed pre 1 June 2019 will continue to be binding until 31 May 2020. Thereafter such a provision will cease to be binding but the remaining provisions will still continue with full force and effect. Tenancy deposits in excess of the cap will not need to be returned immediately but must be returned at the end of the tenancy. There is also a grace period post 1 June 2020 where any landlord or agent who accepts a prohibited payment will have 28 days to return it before they will be found in breach.

Landlords and agents need to be wary and get their ‘houses in order’.  There are sanctions for breaching the new rules and it is envisaged Trading Standards will enforce the provisions.  These include fines (up to £30,000), committing a criminal offence if repeat breaches, and having to repay fees.  Also, it will be more difficult to evict a tenant if a landlord fails to comply with the rules, as they can’t serve a s21 notice to obtain possession.

For information on what you, as a landlord or agent, should be doing, please contact Sallyanne Phillips.