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How Will The UK Tenant Fees Act Impact Mobile Employees? 05.20.2019 | Morgan E. Wiedmann

Historically, in order to set up tenancies, landlords and agents have charged fees to cover a broad range of administrative tasks, including inventory check-ins and check-outs. In recent years, these fees have been deemed unreasonably high. 

This has led to a new Tenant Fees Act, which will be coming into effect June 1, 2019 in England. This Act is also due to take effect in Wales in the autumn of 2019, as it has now passed through the Welsh Assembly and awaits Royal Assent.

The new Act will protect tenants from high fees in a number of ways. For example: tenant deposits are currently capped at six weeks’ rent, with an additional two weeks’ rent required of tenants with pets.

The new Act limits deposits to five weeks’ rent while prohibiting landlords from charging additional amounts for pets. The exception to this is when the annual rent is over £50,000; in this case, six weeks’ rent can still be taken.

What Does This New Legislation Mean?

  • Excessive fees can no longer be charged, which should save tenants anywhere from £200 to £600 or more in certain regions of England.
  • Prospective tenants will have a clear understanding of the exact cost to rent a property in England.
  • Holding deposits paid by tenants to secure a property will be limited to the equivalent of one week’s rent.
  • Fees for adjusting a tenancy in relation to an assignment or novation will still apply but will be capped at £50.
  • Interest to be paid on rent arrears will be capped at 3% above the base rate set by the Bank of England.

The Act also allows for greater protection throughout the term of the tenancy in that a landlord must provide evidence of any reasonably incurred costs that they ask tenants to cover, which will prevent tenants from being charged inflated prices for damaged items.

If a tenant is charged unfairly, the timeframe by which landlords and letting agents must issue a refund will also be shorter under this new legislation.

Although a landlord may recover damages arising from a tenant’s failure to perform obligations or discharge liabilities under a tenancy, the amount recoverable must be reasonable and limited to the loss suffered.

How Will the New Act Impact Relocation Programs?

  • First and foremost, the act will reduce costs as companies and tenants will no longer have to pay tenants fees or inflated deposits
  • It will also provide clear guidance of what charges can or can’t be made and expedite any dilapidation claims.

According to Jonny Stearn, Team Leader, Relocation Management in Weichert’s UK office, “This new legislation is really great news for all of our mobile employees moving into England & Wales. There will be big cost savings once the tenants fees ban comes into effect in the form of better protection from landlord claims and lower security deposits required.”

Please contact your Weichert Relocation Consultant for further information or to discuss how these changes will affect your specific program.

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Written by Morgan E. Wiedmann

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Morgan Wiedmann is the Content Specialist in Weichert’s Marketing group. Leveraging over five years of experience in writing and marketing, she develops content for the company’s website and social media channels as well as for client and colleague communications. Morgan graduated Magna Cum Laude with a degree in Journalism from Suffolk University in Boston.

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