WITH tenant fees on lettings applications banned from June 1, Berrys took early action and banned tenant fees in April.
The new legislation makes it illegal for letting agents and landlords to charge fees to their tenants as a condition of granting or continuing the tenancy such as charging for credit checks, inventories, referencing or administration services.
The legislation aims to help protect residential tenants against excessive fees being charged by some letting agents.
“At Berrys we no longer charge tenant fees to people applying for properties we manage under our residential letting service,” said Gary Conaghan, residential lettings manager with Berrys in Northamptonshire.
“The new legislation covers most fees but there are certain exceptions to this list, namely: holding deposits, rent, deposits and charges for defaulting on the contract but these have new restrictions placed on them in the new Tenant Fees Act,” he explained.
“For example, deposits will be limited to a maximum five weeks’ rent where the annual rent is below £50,000 and six weeks for rentals above £50,000.
“With regard to defaulting on the tenancy, if a tenant loses keys the landlord can charge the reasonable cost that can be evidenced in writing and for late payment of rent the charge three per cent above the Bank of England base rate in interest on the late payment of rent from the date the payment is missed.”
Where the tenant wishes to change the tenancy such as swapping tenant, the landlord may charge a fee of £50 for the change or the costs incurred if higher than that with evidence in writing.
If the tenant wished to surrender the tenancy early the landlord or agent can charge fees equivalent to the loss incurred for rent lost.
“The downside of this is that as the new legislation does not permit charges for the additional costs of referencing and drafting a tenancy for a new tenant, landlords may be put off accepting an early surrender of a tenancy,” said Gary.
The new legislation will be enforced by Local Trading Standards and if a banned fee is taken tenants can claim the lost fee with interest via the county court.
“Landlords should be aware of the legislation and ensure they do not make unlawful charges,” said Gary. “Where this happens and the tenant has paid a banned fee the landlord will not be able to serve a Section 21 Notice to evict them.
“Having not charged these fees from April 1, we have protected our landlord clients and residential tenants and future proofed our residential letting business model,” he added.
For more information contact Gary Conaghan at the Kettering office of Berrys on 01536 532374, email or Jo Walker on 01536 213174 email