More controversy has been stirred up by the introduction of the Tenant Fees Bill which is currently being considered by Parliament. Tenants believe that the provisions under the Bill won't go far enough to protect them from "rogue landlords" and leave them open to an increase in rent, which was surely not the purpose of the proposed legislation.
The Bill contains restrictions on landlords and letting agents of charging their tenants with certain payments. The restrictions also aim to benefit people acting on behalf of tenants or who are guaranteeing tenants' obligations.
The intention is to prevent tenants from having to pay letting fees. Payments such as the rent and security deposit are not barred. It is intended that holding deposits will still be permitted provided they are refundable and the amount does not exceed one week's rent. Fees relating to assigning or varying a tenancy are still acceptable, but in effect they must be reasonable.
Breaches of the proposed new rules will lead to a fine and, potentially, a criminal conviction.
The concern is that as letting agents may increase their fees to landlords, to off-set the reduction of letting fees recovered from tenant, the landlords will increase the rents thus passing the costs back indirectly to the tenant.
If the bill is passed by Parliament, as well as banning letting fees and capping tenant deposits, it will: Cap holding deposits to reserve a property at no more than one week's rent. Cap the charge to change a tenancy at £50 unless the landlord can show it cost more than that. Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements, which include publicising fees, should apply to property portals such as Rightmove and Zoopla. Introduce a £5,000 fine for an initial breach of the ban and make it a criminal offence, with a maximum penalty of £30,000, if a person has been fined or convicted of the same offence within the last five years. Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover wrongly charged fees. Prevent landlords taking back possession of their property until they have repaid any unlawfully charged fees. Under the new rules letting agents and landlords will only be able to charge for rent, deposits, if a tenant requests a change or early termination of their tenancy, for utility and council tax bills and damage or cost caused by a tenant, such as replacing lost key.