Tenant Fees Act: landlords should read up on the new law before it comes into force, or risk a £5,000 fine

Strict new laws will dictate what a landlord can and can't ask tenants to pay for. Both sides need to know the rules
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Do you want to save £5,000? Of course you do. If you are a landlord, here is a tip that could save you an awful lot more than that: read the Government's guidance on the new Tenant Fees Act — but make sure you read it before the end of the month.

You might have heard that there will be a ban on tenancy fees from June 1 and you might have assumed, like me, that this means landlords and letting agents won't be able to charge tenants for such things as inventories, tenancy agreements and referencing.

In other words, the landlord will have to bear all the costs associated with setting up a tenancy.

However, the Tenant Fees Act also outlaws a whole load of other charges you might expect your tenant to pay.

For instance, if you organise a weekly cleaner or a regular gardener, you won't be able to charge the tenants separately for this service.

Similarly, you won't be able to charge them penalties for such things as failing to stick to an appointment with the plumber, or leaving rubbish in the front garden.

Also, while you can insist tenants leave a property cleaned to "a professional standard" you won't be able to insist that they pay for a professional cleaner at the end of the tenancy as this would require them to enter into a contract with a third party, which is outlawed by the Act.

Essentially, from June 1 landlords will only be allowed to charge tenants for water, gas, electric and any other utilities, council tax, wifi and phone lines and the TV licence. Pretty much all other fees will be banned.

If your tenant requests a change to the tenancy, you'll be able to charge them up to £50, or more as long as the charge is "reasonable", and you will be able to charge them a reasonable amount if they ask to end their tenancy early.

You will also be able to charge them a default fee for late payment of rent and the replacement cost for lost keys or other security devices, as long as these are specified in the tenancy agreement.

From June 1, you will still be allowed to request that tenants pay a holding deposit prior to them signing the tenancy agreement, but this will be capped at one week's rent and there are strict rules about if and when this must be refunded.

You will also be able to take a deposit for the duration of the tenancy, but this will be capped at five weeks' rent, even for high-risk tenants and those with pets. Many landlords I know, myself included, like to take six weeks' rent as security and up to two months for pet owners.

If you've already taken a deposit of more than the amount permitted by the Tenant Fees Act, you'll have to refund the excess if and when you renew the tenancy.

If you allow the tenant to roll on to a statutory periodic contract instead of issuing a new fixed-term tenancy agreement, you will be allowed to hang on to the full amount until they move out.

Make a mistake and accidentally charge a tenant for something which isn't permitted under the new rules and you could end up with a £5,000 fine. Do it again and you could face a criminal prosecution and an unlimited fine.

So, read the government guidance, bone up on the new rules and save yourself at least five grand. You can visit www.gov.uk for full information.

Victoria Whitlock lets four properties in south London. To contact Victoria with your ideas and views, tweet @vicwhitlock

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