10^th Jun 2018

Buy-to-let landlords must ready themselves for the letting fees ban as it will be illegal charging tenants for such things as inventories and references.

The Tenant Fees Bill, which is likely to be made law by spring 2019, will also be introducing a tenant's deposit cap, and varying fines for not complying with any of its regulations.

The government predicts that landlords and lettings agents could lose up to £240 million in fees that landlords and agents are currently able to charge throughout England and Wales.

David Alexander, managing director of an estate and lettings agency, said: “This bill has been introduced to regulate what was a largely unregulated and potentially problematic area of letting.

“Some landlords and agents have been charging substantial fees to tenants with little explanation why these charges applied other than for “administration”.

“This has been an area of complaint for tenants who believe that unscrupulous landlords and agencies were using these fees as a means of increasing their income rather than improving service for the tenants.

“The loss of these fees may prove problematic for some but should be looked upon as an opportunity to ensure that tenants have a transparent, honest, and understandable agreement with their landlord or agent.

“Landlords and agents cannot ignore this change which is inevitably coming so must put in place appropriate measures to deal with any loss of income and ensure their business is operating in a legally appropriate way.”

Not only does the Tenants Fees Bill eliminates tenants' fees it will introduce the capping of deposits to a maximum of six weeks rent, as well as the charge to change a new tenancy becoming no more than £50. Fines will be levied on those landlords for persistent non compliance with the regulations. The Bill will also bring in Trading Standards to 'police' the regulations and will be changing the Consumer Rights Act 2015, which means online property portals will have to follow the letting agents' transparency requirements.

Alexander added: “Similar changes were implemented in Scotland in 2012 which ended agency fees and cleared up deposit holding by landlords and agents and generally most have coped well with this.

“The bulk of the fee loss is likely to be absorbed by landlords, but they will be creating a more trusting and attractive environment for their tenants which generally results in greater demand and consequently increased rental returns.”

Alexander fully appreciates that because of the legislative and financial changes the sector has had to endure, has made BTL investment not as the viable proposition it was before. He does believe that the Tenants Fees Bill and changes can be viewed by good landlords as a real opportunity to form a “transparent, open, and honest relationship with their tenants”; which no doubt will lead to “longer term tenancies, greater trust, and increased revenues in the long term”.

The Vetting process starts with the Tenant completing your Tenant Application Form always ask for a Guarantor.If renting to people on benefits we recommend additional checks. Bad Tenants can easily be identified and avoided by following our tried and tested methods see the PIMS vetting videos below

VIDEO 1 Compulsory LAW - How to Perform Right to Rent Checks	VIDEO 2 PIMS Tenant Credit Check are Instant and FREE to members	VIDEO 3 PIMS Top 10 Vetting Tips - help you avoid the bad tenants
THE LAW if you do not follow the "right to rent Legislation for non EU persons" then you can be fined up to £3000 What does the Immigration Act mean for landlords	FREE Tenant Credit Check - Online Instantly Credit Check - Risk Score Bankruptcy Order CCJ Report	The Classic Deception Tenant Referencing Vetting Check List Vetting Benefits, DSS. LHA Tenants Selecting the Tenant

News Archive »