Understanding Tenant Fees in England

Renting a home involves several financial commitments, including rent, deposits and certain payments that may arise during a tenancy. The rules governing tenant fees in England are designed to identify which payments landlords and letting agents can legally request.

The Tenant Fees Act 2019 sets out the permitted payments that can be requested in connection with a tenancy. The rules have also been affected by subsequent changes to rental legislation, so tenants should always check the latest government guidance when assessing a particular tenancy.

Zuplex aims to keep its rental process clear and transparent by providing information about applicable charges and explaining the relevant stages of the tenancy where appropriate.

Holding Deposit

A holding deposit may be requested when a prospective tenant wants to reserve a property while the necessary pre-tenancy checks are completed.

A holding deposit is separate from the tenancy deposit. Where the tenancy proceeds, the holding deposit can, with the tenant’s agreement, be applied towards the first rent payment or tenancy deposit in accordance with the applicable rules.

Government guidance also sets out circumstances in which a holding deposit should be returned or may lawfully be retained.

Tenancy Deposit Limits

A refundable tenancy deposit may be required as security for the tenant’s obligations under the tenancy. The maximum amount depends on the annual rent of the property.

Where a tenancy deposit is taken, it must be handled and protected in accordance with the applicable tenancy deposit protection requirements.

Late Rent Payments

Rent is one of the permitted payments under the tenancy rules. Where rent is paid late, a default charge may only be applied where the relevant requirements are satisfied.

Under the Tenant Fees Act framework, interest on late rent is restricted to a maximum of 3% above the Bank of England base rate and the statutory conditions for charging the interest must be met.

Tenants should therefore review their tenancy agreement carefully and contact their letting agent promptly if they believe they may have difficulty making a rent payment on time.

Lost Keys and Security Devices

Losing a key or another security device can create an unexpected cost during a tenancy. A landlord or letting agent may be able to recover the reasonable cost of replacing a lost key or security device where the relevant conditions are met.

The amount charged should reflect the reasonable cost actually incurred. Tenants may be entitled to receive written evidence of the relevant cost.

For this reason, a fixed arbitrary charge should not automatically be assumed to apply to every lost key situation.

Changes to a Tenancy Agreement

A tenant may sometimes request a change to an existing tenancy, such as a change involving the people named on the agreement. Certain tenancy changes requested by the tenant can involve a permitted payment.

Any requested change should be discussed before the work is undertaken so that the tenant understands the potential cost and the requirements involved.

Changing a Sharer or Tenant

When a tenant requests a change to the people named on a tenancy, this can involve an assignment, variation or novation of the agreement.

The applicable permitted payment rules may allow a charge of up to £50, or reasonable higher costs where those costs can be properly demonstrated. The exact circumstances of the tenancy should be considered before any change is agreed.

Ending a Tenancy Early

A tenant may occasionally wish to leave a tenancy before the agreed end of the contractual arrangement. Where early termination is requested by the tenant, certain payments may be permitted.

Any amount associated with an early termination should be considered in accordance with the applicable tenancy agreement and legal requirements. Landlords and agents should not use an early termination payment to create an unlawful additional charge.

If you are considering leaving a tenancy early, it is advisable to contact the letting agent before making arrangements to understand the financial implications.

Payments That Cannot Simply Be Added as Extra Tenant Fees

The Tenant Fees Act establishes a defined list of permitted payments. A landlord or letting agent cannot simply introduce an additional charge because it appears in a standard price list.

• Rent payable under the tenancy
• Permitted refundable tenancy deposits
• Permitted holding deposits
• Certain tenant-requested tenancy changes
• Qualifying early termination payments
• Permitted late rent payments
• Reasonable costs associated with replacing lost keys or security devices
• Other payments specifically permitted by the relevant legislation

Any proposed charge should be checked against the current legislation and the individual tenancy circumstances.

Transparency and Letting Agent Fees

Letting agents are required to provide information about the fees they charge. This transparency helps prospective tenants understand the financial commitments associated with renting before proceeding with a property.

Where properties are advertised through third-party platforms, applicable fee information must be presented in accordance with the relevant requirements.

Zuplex aims to maintain clear communication with tenants and landlords so that everyone involved understands the relevant costs and responsibilities.

Tenant Fees and Your Rental Agreement

The tenancy agreement remains an important document throughout the rental process. Before signing, tenants should read the agreement carefully and understand the rent, deposit, responsibilities and circumstances in which permitted payments may apply.

If you are unsure about a charge or a particular term in your tenancy agreement, ask the letting agent for clarification before proceeding.

For the latest information on tenant fees and renting in England, tenants should also consult the relevant guidance published by the UK Government.