Tenant Fees Ban:
The national charity Citizens Advice (CA) has warned that a loophole exists in the Tenant Fees Bill currently passing through Parliament which would allow landlords and agents to still charge tenants fees, for tenancy contract defaults.
Examples of defaults might be fees for such things as late rent payments, replacing keys and locks, and keeping pets without permission. The CA argues that the default clause in the Bill, which does not clearly define what these charges might be, could lead to unscrupulous landlords and letting agents hitting tenants with unfair charges.
The default fees clause was included to allow landlords some flexibility to charge for tenancy breaches, but the CA thinks this is too open ended and does not give sufficient protection to tenants.
The Government has promised it will issue guidance on when and how default fees could be charged, but, argues the CA, that would not be legally enforceable.
The Citizens Advice wants a clearer definition of when a default fee is legitimate inserting into the Bill before it is written into law.
This, the CA says, would also benefit landlords by providing a “clearer steer on the rules” and stop rogue landlords and agents who are prepared to abuse the clause from gaining an advantage.
The CA also thinks that the bill should to be amended to make security deposits capped at four-weeks rent, as opposed to the proposed six-weeks currently written into the Bill.
The CA says that tenants have already paid out £235 million in unfair and uncompetitive fees since the government promised to ban them in November 2016 – a rate of £13 million a month.
Gillian Guy, Chief Executive of Citizens Advice, said:
“The government’s pledge to ban fees will be fundamentally undermined unless the clause on default fees is significantly tightened.
“The loophole leaves tenants vulnerable to rogue landlords and agents looking to continue charging unfair fees.
“The government must tighten this clause and issue a clearer definition of what a default fee is. Leaving this just to guidance risks poor outcomes for both renters and landlords.”
David Cox, chief executive of ARLA Propertymark has said:
“There is clearly overwhelming support in Parliament for the ban, however tonight’s debate makes clear MPs do not understand what is meant by default fees and the implications of reducing tenancy deposits,”
“As the Bill goes to committee stage it is more important than ever that agents go and see their MPs to make the case for why these fees remain vital even after the ban comes into force.”
The Citizens Advice service provides a network of local centres providing information and advice and by influencing policymakers. www.citizensadvice.org.uk©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.