What is the Tenant Fees Act?

by | Aug 26, 2021 | Welcome

It was often considered a risk to put in an application to rent a property many years ago as there were a lot of fees that accompanied the process, and there was no guarantee that these would be refunded if you were unsuccessful. Luckily, this all changed with the introduction of the Tenant Fees Act in 2019. Here at Empanda Properties, we abide by a strict ‘no hidden fees’ ethos as this is an integral part of the law and protects both ourselves and our tenants. Read on as we go over everything there is to know…

Why was the Tenant Fees Act Introduced?

It’s widely believed that rogue letting agents had been increasing the amount of fees that tenants had to pay for many years which has given those who truly want to help a bad reputation. The government implemented the Tenant Fees Act into law on June 1st 2019 as a way to make renting more stable for those as statistics suggest that there are over 4.5 million households renting in England alone. The act specifically targets the private sector which was more likely to be affected by inflated fees prior to its implementation.

What Does ‘No Hidden Fees’ Mean?

The aim of the Tenant Fees Act is to allow prospective tenants to see how much a property will cost at a glance and understand the costs that will be expected of them if the letting agency agrees to proceed with their application. This means that there will be no additional costs that are strung on a tenant without anticipation or expectation, and this is what is meant by the term ‘no hidden fees’. Essentially, a letting agency is legally required to be completely transparent about the renting process from the outset.

Which Fees are Permitted by the Tenant Fees Act?

In the past, a letting agency was able to charge tenants for a number of processes such as reference checks, credit checks and admin, however these are now banned. Under the Tenant Fees Act, there are a number of regulations that cover which fees a letting agency is allowed to request, including:

  • A refundable deposit; this is capped at 5 weeks rent where the annual rent is below £50,000 or 6 weeks rent where the annual rent is at or above £50,000
  • Fees associated with early termination of an agreement where requested by the tenant
  • Payments in order to cover cost associated with utilities, council tax and tv licence
  • Additional fees where late payment of rent is concerned or costs associated with replacing lost key, as outlined in the tenancy agreement

The Tenant Fees Act has been in place for over 2 years now, however it still requires careful planning from letting agents in order to ensure that we aren’t putting prospective tenants in a precarious financial situation. Empanada Properties are 100% transparent from the outset and we only request the basic fees from our renters once we have decided to proceed with their application. To discuss the act in more detail, get in contact with the best letting agency Altrincham has to offer and speak to a member of the Empanda Properties team today!