It is unlawful for landlords or agents to charge tenants (or licencees) fees for tenancies entered into or renewed on or after 1 June 2019.
What you can and can't be charged for
A tenant can only be charged:
- a refundable tenancy deposit capped at no more than 5 weeks’ rent (where the total annual rent is less than £50,000)
- a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- payments associated with early termination of the tenancy, when requested by the tenant
- payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
- payments in respect of utilities, communication services, TV licence and Council Tax
- a default fee for late payment of rent and replacement of a lost key/security device giving access to the property, where required under a tenancy agreement
All other fees, such as charges for referencing, administration, renewing tenancies and credit and immigration checks, are prohibited.
From 1 June 2020 a landlord or agent will not be able to charge prohibited fees regardless of when the occupancy agreement began.
What happens if unlawful fees are charged
If a prohibited fee is charged in error, it should be returned to the occupier as soon as possible or at latest within 28 days. As well as returning the unlawful fee, any breach of the legislation will usually be a civil offence with a financial penalty of up to £5,000.
If a further breach is committed within 5 years, this will be a criminal offence. The penalty for the criminal offence is an unlimited fine or a financial penalty of up to £30,000 as an alternative to prosecution.
The no-fault section 21 possession procedure cannot be used until any unlawful fees have been returned.
What you can do if you've been charged
If you think you have been charged an unlawful fee you should report it to Trading Standards.