What Fees Can Landlords Charge Tenants in the UK? A Comprehensive Guide for Renters

Navigating the UK rental market can be a complex process, and one of the most frequently asked questions by tenants is, “What fees can landlords charge tenants in the UK?” Understanding these potential charges is crucial for renters to avoid unexpected costs and ensure they are being treated fairly. The Tenant Fees Act 2019 significantly reshaped the landscape of landlord charges, aiming to protect tenants from excessive and unfair fees. This article provides a detailed breakdown of what landlords can and cannot charge, offering clarity and empowering renters.

The Tenant Fees Act 2019: A Landmark Change

Before diving into specific fees, it’s essential to understand the legislation that governs them. The Tenant Fees Act 2019, which came into effect on June 1, 2019, abolished most of the upfront fees that landlords and letting agents were previously able to charge tenants in England. This act was a significant victory for renters, who often faced substantial costs before even moving into a property. The primary goal was to increase transparency and reduce the financial burden on tenants.

Permitted Payments: What Landlords CAN Charge

While the Tenant Fees Act 2019 has placed significant restrictions on landlord charges, there are still certain payments that are legally permitted. These are typically linked to the actual costs incurred by the landlord or agent due to specific tenant actions or needs. It’s important to note that these fees must be reasonable and reflect the genuine expense.

Rent

This is the most fundamental payment a tenant will make. Rent is the agreed-upon amount paid periodically for the use of the property. The Tenant Fees Act does not regulate the amount of rent itself, but it does stipulate how it should be paid and when it is due.

Tenancy Deposit

Tenancy deposits are a common requirement for landlords to cover any potential damage to the property beyond normal wear and tear, or for any unpaid rent at the end of the tenancy. However, the Tenant Fees Act has capped the amount that can be charged for a deposit. For most tenancies, the maximum deposit a landlord can request is equivalent to five weeks’ rent if the annual rent is less than £50,000. If the annual rent is £50,000 or more, the maximum deposit is six weeks’ rent.

It’s crucial that these deposits are protected in a government-approved tenancy deposit scheme (TDP) within 30 days of receipt. Landlords must also provide tenants with the prescribed information about the scheme.

Holding Deposit

A holding deposit is a payment made by a prospective tenant to a landlord or letting agent to reserve a property while referencing and credit checks are carried out. The Tenant Fees Act limits the holding deposit to a maximum of one week’s rent. This payment is not a fee; it’s a deposit that should be returned to the tenant if the tenancy does not proceed due to the landlord or agent withdrawing the offer, or if the tenant is unable to secure the tenancy due to issues with the referencing process that were not their fault.

There are specific circumstances under which a landlord can legitimately retain a holding deposit:

• If the tenant withdraws their application for the property.
• If the tenant fails a right-to-rent check.
• If the tenant provides false or misleading information that the landlord reasonably relied upon when deciding to offer the tenancy.
• If the tenant breaches the terms of the tenancy agreement during the referencing period.

Payments for Changes to the Tenancy Agreement

If a tenant requests a change to the terms of their tenancy agreement after it has been signed, landlords can charge a fee to cover the administrative costs associated with making that change. This fee is capped at £50, unless the landlord can demonstrate that their reasonable costs are higher. Examples of such changes include adding or removing a tenant, or changing the rent due date.

Payments for Early Termination of the Tenancy

If a tenant wishes to leave their tenancy before the end of the fixed term, they may be liable for certain costs. This is often referred to as “surrendering” the tenancy. Landlords can charge a fee to cover the costs they incur as a result of the early termination. These costs might include:

• Advertising the property to find a new tenant.
• Referencing new tenants.
• Lost rent until a new tenant is found.

The total amount a landlord can charge for early termination should not exceed the amount of rent that would have been paid for the remainder of the contract term. This is to prevent landlords from profiting from the tenant’s early departure.

Payments for Utilities, Communication Services, TV Licence, and Council Tax

Landlords can require tenants to pay for utilities such as gas, electricity, water, and council tax. They can also charge for services like broadband, phone line rental, and television licences if these are contracted by the landlord and provided to the tenant. However, these charges must be clearly stated in the tenancy agreement and should reflect the actual cost of the service.

Payments for Lost Keys or Othermeans of Access

If a tenant loses the keys to the property, landlords can charge a reasonable fee to cover the cost of replacing them. This fee should reflect the actual cost of the replacement keys or locksmith services.

Payments for Default Fees (Late Rent Payments)

Landlords can charge interest on rent that is paid late. This interest can only be charged if the rent is more than 14 days overdue. The rate of interest is capped at 3% above the Bank of England’s base rate. This is intended to compensate the landlord for the inconvenience and cost of chasing late payments, not to be a punitive measure.

Prohibited Fees: What Landlords CANNOT Charge

The Tenant Fees Act 2019 explicitly bans a wide range of fees that were previously common in the rental market. Understanding these prohibited fees is just as important as knowing what you can be charged. Any landlord or letting agent charging these prohibited fees could face penalties.

Admin Fees

This is one of the most significant categories of banned fees. Landlords and agents can no longer charge tenants for general administration, such as:

• Referencing fees
• Credit checks
• Inventory checks
• Right-to-rent checks
• Contract arrangement fees
• General administrative tasks related to setting up or managing a tenancy

Referencing Fees

As mentioned above, any fees associated with referencing a prospective tenant are now illegal. This includes fees for credit checks, identity verification, and employment references.

Inventory Fees

Previously, tenants were often charged for the creation of an inventory report, which details the condition of the property and its contents at the start of the tenancy. These fees are now prohibited.

Viewings Fees

Landlords and agents cannot charge tenants for arranging or conducting viewings of properties.

Check-in and Check-out Fees

Fees for the process of checking a tenant in or out of a property are also banned.

Pet Fees

While landlords can stipulate in the tenancy agreement whether pets are allowed, they cannot charge an additional “pet fee” to allow pets. If a landlord wishes to charge more for a property where pets are permitted, this would need to be reflected in the rent itself, and the deposit cap still applies. However, if a tenant causes damage due to their pet, the cost of repair can be deducted from the tenancy deposit.

Professional Cleaning Fees (Unless Stipulated in Contract for End of Tenancy)

Landlords cannot demand that tenants use a specific, often expensive, professional cleaning service at the end of the tenancy. However, a tenancy agreement can include a clause requiring the property to be returned in the same state of cleanliness as it was at the start, allowing for professional cleaning if it’s necessary to meet this standard. The cost of this cleaning would typically be deducted from the deposit if the property is not returned to the required standard.

Gardening Fees

Unless the tenancy agreement specifically states that the tenant is responsible for garden maintenance, landlords cannot charge a separate fee for gardening services.

Inventory Check-in/Check-out Fees

These are explicitly banned under the Tenant Fees Act.

“Tenant Lifestyle” Fees

Any fees based on a tenant’s lifestyle, such as charges for having guests or for using certain facilities, are illegal.

Break Clause Fees

While a break clause allows for early termination under specific conditions, landlords cannot charge a separate fee for the tenant exercising this clause.

Deposit Protection: A Crucial Tenant Right

As mentioned earlier, tenancy deposits must be protected in one of the three government-approved TDP schemes: Deposit Protection Service (DPS), MyDeposits, or Tenancy Deposit Scheme (TDS). This protection is a legal requirement. Within 14 days of receiving the deposit, landlords must provide tenants with:

• The name and contact details of the TDP scheme.
• The landlord’s or agent’s name and contact details.
• The name and contact details of any third party who will be managing the deposit.
• The amount of the deposit.
• The address of the property.
• Information on how to reclaim the deposit at the end of the tenancy.
• Information on what to do if the tenant disagrees with the amount of the deposit to be returned.

Failure to protect a deposit correctly can result in tenants being able to claim compensation from their landlord, even if the landlord intends to return the full deposit.

What to Do If You Are Charged Prohibited Fees

If you believe your landlord or letting agent has charged you a prohibited fee, you have several options:

1. Speak to Your Landlord or Agent

The first step is to politely inform them of the Tenant Fees Act 2019 and explain which fee is prohibited. They may have made an error and be willing to refund the money.

2. Seek Advice from a Housing Charity or Advice Service

Organisations like Shelter, Citizens Advice, or your local council’s housing options team can provide free and impartial advice. They can help you understand your rights and the best course of action.

3. Report to Trading Standards

If your landlord or agent refuses to refund the fee, you can report them to your local authority’s Trading Standards department. They have the power to investigate and issue fines.

4. Take Legal Action

In some cases, you may be able to take legal action to recover the prohibited fees. This is usually a last resort and may involve a small claims court.

The Importance of a Clear Tenancy Agreement

A well-written and clear tenancy agreement is vital for both landlords and tenants. It should explicitly outline all the permitted charges and the conditions under which they might apply. Tenants should always read their tenancy agreement carefully before signing and ask for clarification on any points they don’t understand. Ensure that any agreed-upon fees align with the Tenant Fees Act 2019.

Summary Table of Permitted and Prohibited Fees

To provide a quick reference, here is a summary table:

Understanding what fees landlords can charge tenants in the UK is essential for a smooth and fair rental experience. The Tenant Fees Act 2019 has brought about significant protections for renters, making the process more transparent and affordable. By being aware of your rights and responsibilities, you can confidently navigate the rental market and avoid being unfairly charged. Always ensure that your tenancy agreement clearly outlines any permitted payments and that your landlord or agent adheres to the law.