02/11/2017
Draft bill will ban letting fees for tenants (E)
Agents that charge letting fees to tenants will face civil penalties of £5,000 for their first offence and criminal charges – or civil penalties up to £30,000 – if they have been fined or convicted of the same offence within the past 5 years, under a measure banning letting fees in the ‘Draft Tenants Fees Bill’.
The ban, which will apply to assured shorthold tenancies and licences to occupy in the private rented sector in England, reflects responses to an earlier consultation in April that generated 4,700 responses, 90% of which supported the ban. 7 out of 10 respondents also said the fees affected their ability to move into a new rented property.
Other measures in the bill will
- cap holding deposits at no more than one week’s rent and security deposits at no more than 6 weeks’ rent
- require landlords and agents to return a holding deposit to a tenant
- require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees
- appoint a lead enforcement authority in the lettings sector
- amend the ‘Consumer Rights Act 2015: Duty of Letting Agents to Publicise Fees etc’ to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
Views are also sought in a separate but closely linked consultation on proposals to make membership of client protection schemes mandatory for letting and managing agents which handle clients’ money.
‘Mandatory client money protection schemes for property agents’ aims to give both landlords and tenants complete confidence that their money is safe when it is with their agent and that they will be compensated if it is not repaid.
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