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Say goodbye to tenant fees

24th January 2019

Agencies and landlords who charge tenants for things like referencing, inventories and cleaning in addition to their deposit and advance rental payments will be subject to fines up to £30,000 per property due to a new law.

The Tenant Fees Ban will affect 35% of Warrington and UK residents. It will come into force on the 1st of June 2019, following a recent hearing in the house of Lords.

The news is likely to initially delight tenants, but how will it affect others in the property industry, such as landlords and agencies?

According to ARLA, the average saving for a tenant will be £337, whilst the cost to an average agency could increase, costing them around £60,000 to Feb 2021.

Gerry Mason-Rolls Lettings Director at Warrington based James Peacock Property has been following the journey of the legislation since it was first muted in government. She explains;

“The administration checks pre-tenancy are absolutely essential to protect tenants and keep them safe. For landlords, diligent referencing provides assurance the tenant will care for the property, and be able to pay their rent. Landlords have previously been able to charge for these fees, but the new law means that us, as an agency will incur the costs”.

Whilst some agencies and landlords may be tempted to take the risk and stop some of the checks, or increase rents to cover the gap, James Peacock are clear that they won’t cut corners.

Gerry continues:

“Whilst at first glance the change doesn’t look great for landlords and agencies, it is a positive step forward for the industry. We’ve had some time to plan and change our processes to meet it head on, without compromise. As a result, we think we’re actually able to offer a better service than we did before, without impacting too much on our clients”

The news is coupled with today’s announcement that all landlords must be registered with a redress scheme, so that tenants and homeowners have somewhere to turn in case of a dispute, the fine for not complying? Up to £5000.

Initially the new law will apply to new tenancies or renewals, however it is expected that by June 2020 it will be extended to include pre-existing tenancy agreements.

Gerry is offering her time freely, to speak to local landlords who are concerned about how the changes to legislation will affect them. Call 01925 243366.

Among the fees that landlords and agencies will no longer be able to charge for are.

  • Charges for a guarantor form;
  • Credit checking;
  • Inventory checks;
  • For domestic cleaning;
  • For taking up references;
  • Professional cleaning;
  • Having the property cleaned of fleas as a condition of having a pet;
  • Administration costs;
  • Requirements to have specific insurance providers;
  • Gardening provisions.

There are a few charges which will be exempt from the ban, namely holding deposits, rent, deposits and charges related to contractual.

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