Landlords must understand new legislation

If you have cottages on your farm which you manage yourself to save fees, you may want to double check everything you are doing is legal. This is due to the introduction of the Tenant Fees Act 2019. It is important well-meaning landlords do not inadvertently fall foul of the new legislation without realising.

Wiser tenants who know their rights may well pick up on things if you do not comply.

While the obvious answer would be for all people who privately let and manage properties to immediately move them into the management of Howie, Kent and Co, we fully realise that many people like to manage them in-house. It is to you people that this article is addressed and if you need any assistance please give us a call.

In short, the headline points are:

• For all new tenancies from June 1, 2019, and all existing tenancies from June 1, 2020, payments from a tenant to a landlord or agent will be banned unless expressly permitted under the act. Permitted payments include rent, deposit, holding deposit, payments on a default, payment on variation of a tenancy, payment on termination (surrender) of a tenancy, payments for council tax and payments for utilities.

• Prohibited payments include tenant application fees, tenancy set up costs, referencing charges, inventories, end of tenancy cleaning fees and general service charges amongst others.

• Deposits are limited to five weeks’ rent. From June 1, 2020, any deposits held in excess of this amount must be returned. This cap rises to six weeks’ rent if the annual rent is in excess of £50,000.

• If a fixed term tenancy is renewed for a further fixed term after June 1, 2019, this will constitute a new tenancy which must comply with the new legislation.

• A breach of the fees ban is a civil offence with a fine of up to £5,000. Successive breaches are a criminal offence with an unlimited fine. This means if you have one or several let properties where tenants have been in situ for some time, you need to know if your tenancy agreement is up to date. How much deposit do you hold? Will you need to return some of the deposit by June 1, 2020?

• If your tenants are paying a service charge, do you need to re-arrange this to incorporate those costs into a higher rent? Are there any inclusions in the tenancy agreements that are prohibited payments? If you need any assistance on this please give us a call, we are more than happy to discuss possible concerns.

By Duncan Howie, from the firm Howie, Kent & Co Ltd