The government has today revealed its formal consultation process on the proposal to ban tenant fees in England  – and agents have until 11:45pm on 2nd June 2017 to respond.

The proposed ban on tenant fees was announced at the 2016 Autumn Statement.  The ban is intended to improve competition in the private rental market and give renters greater clarity and control over what they will pay.  It also hopes to bring an end to the small minority of agents exploiting their role between renters and landlords, banish unfair charges being imposed and stop those agents that double charge tenants and property owners for the same service.

Gavin Barwell housing minister says: “We’re determined to make all types of housing more affordable and secure for ordinary working people. Tenants should only be required to pay their rent alongside a refundable deposit and not face hidden fees“.

The start of the consultation produced an angry response from ARLA.

David Cox managing director says: “The government’s housing policy is shambolic and today’s consultation contradicts its already stated aim to encourage longer term tenancies

 Have your say!

The consultation paper invites views and comments on how the ban on letting agent fees paid by tenants in England should be implemented and enforced.

You can respond online HERE or complete a response form which can be emailed or posted.

For full details on the consultation and how to have your say click here.

 

Key points of ban (summarised)

  • The Government is keen to see a ban that is clear and simple for all involved, but does not wish to unreasonably increase the risk or financial exposure of individual landlords or agents.
  • The Government proposes to introduce legislation which will mean that no agent will be able to charge tenants any fees, premiums or charges that meet the general definition of facilitating the granting, renewal or continuance of a tenancy.
  • The Government also proposes to ban any letting fees charged to tenants by landlords and any other third parties to ensure that letting agent fees are not paid by tenants through other routes. Tenants should only be required to pay their rent and a refundable deposit.
  • Deposit levels have been increasing and the Government is keen to examine the option of capping the amount of deposit that can be requested by the landlord.
  • In the longer term the Government is seeking to explore the potential and implications of wider options to minimise the financial burden on tenants and to understand what alternative models there are to remove the need or reduce the scale of a deposit at the outset of a tenancy, and what role the Government might be able to play in supporting this.

Noted exemptions

  • Holding deposits – the Government proposes to permit agents to continue to collect holding deposits in order to ensure that there is a commitment from a tenant to a given property and to mitigate the risk of tenants speculating on a number of properties, leading to potentially unnecessary and costly work by agents and landlords. Tenants who proceed with the letting will have their holding deposit refunded. Similarly, deposits will be refunded in the case of landlords or agents failing to proceed. However, the deposits would be forfeited if the applicant has failed to uphold their side of the agreement to let, for example by providing false documentation or withdrawing from the tenancy. The Government does however suggest that holding deposits may need to be capped.
  • In-tenancy property management service charges arising because of the action of the tenant – the Government also proposes that charges that directly relate to an action or service carried out at the request of the tenant or as a result of a tenant’s actions should be chargeable to the tenant. Such charges could include arranging for replacement keys, repairs carried out as a result of deliberate damage or breach of the tenancy agreement, or late rent payment charges.

This ban will directly affect you so we’d recommend getting involved and telling the government what you think (in polite terms of course!)