This is a series of articles originally published on the Anthony Gold blog. The second part can be seen here.
The Tenant Fees Act- An Outline
The government finally published its guidance document (actually three of them) on the Tenant Fees Act on 1 April 2019. The provisions come into force on 1 June 2019 so there is still time (but not much!) to digest the guidance and make changes accordingly.
This is made a little harder because the various statutory instruments which will bring the Act into force and which can (optionally) be used to amend the list of prohibited or permitted fees have not been published and so the guidance operates in something of a vacuum at the moment. In other words, it may be wrong or it may not and its hard to tell!
There are currently three pieces of guidance. One for landlord/letting agents, one for tenants, and one for local authorities.
The Tenant Fees Act (TFA) operates by prohibiting landlords and letting agents from charging tenants any fees for the grant, renewal, termination, assignment, or novation of a tenancy unless they are specifically included on an approved list. That list is pretty short. The Act also prohibits requiring a tenant to enter into a contract with a third party so it prevents the obvious evasion of not charging a fee myself but getting someone else to charge it on my behalf.
The Act has a schedule of permitted fees within it which set out what can be charged. It is important to bear in mind that if a fee falls into one of the categories in the schedule then it is permitted. Even, if it does not fall into other categories or is excluded from another category specifically. It is easy to fall into the trap of thinking that because a category excludes a specific class of fees that these are excluded altogether, even though they are permitted elsewhere.
Enforcement is by local authority trading standards officers. This is by way of civil penalty initially with the option of higher penalties or prosecution for repeated offences.
The TFA is actually very complex and there is a lot of details which need looking at. Not least because parts of it are badly worded and the guidance itself says things that are incorrect, or ambitious at the very least! Therefore this is the first, introductory post, of a series I will be writing over the next fortnight looking at a range of aspects of the TFA.
Next up is optional fees, what is and is not allowed?