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It is worth taking a look at the draft Tenant Fees Bill to see how it might change the role of landlords and letting agents in the UK. It seeks to reduce costs to tenants, so that there aren’t any unexpected extras or costs when they come to sign their contract.

One of the changes is to ban landlords and agents from requiring any payments from tenants as a condition of a rental contract, whether it is a new or continuing contract. All tenants can be asked to pay is rent, of course, a refundable tenancy deposit, a holding deposit and any default fees or charges for things such as not paying rent on time or losing keys. Also, they cannot be asked to pay for services provided by a third party – this will prevent agents’ fees being introduced by the back door.

In the draft bill, it says that this ban cannot be applied retrospectively. That means any fees relating to tenancies which existed before the ban comes into force will still have to be paid. The good news is that the cap for the maximum tenancy deposit will be six weeks and not four weeks, as was outlined in the Queen’s Speech.

As mentioned above, landlords and letting agents can ask tenants to pay a refundable holding deposit of up to one week’s rent. This is used to remove a property from the market and is also a good indication that the tenant seriously wishes to take up the lease. This deposit has to be returned within 15 days if the landlord or agent does not take the tenancy forward. It does not have to be given back under certain circumstances, such as if they find out the tenant does not have the right to rent under the Immigration Act or if the tenant is found to have provided false or misleading information to try to secure the property. Also, if the tenant decides not to take up the lease or takes too long to enter into a tenancy agreement, then they could forfeit this deposit. If they do go ahead, then this deposit could be used towards the first month’s rent or moved over to the tenancy deposit.

There are serious penalties if a landlord or letting agent is found to have required a tenant to pay a prohibited payment or has not returned a holding deposit. This could mean Trading Standards imposing a fine of up to £5,000 or it could be increased to as much as £30,000 as an alternative to prosecution for repeat offenders.

Fees, client money protection and membership of redress schemes will have to be displayed on property portals. These are also on display in offices and websites, so this is an extension to the provision for the display of fees under the Consumer Rights Act 2015.

Landlords and agents should contact their local MP if they want to put forward their case against any proposal in this draft bill.

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