Tenant Fee Bill passes third reading

Through this clampdown on rental fees, landlords could lose out on millions of pounds under the new default fee provision, in which a landlord or agent will only be able to recover reasonable incurred costs, and must provide evidence of these costs to the tenant before any charges can be made.

The move is designed to ensure that tenants in the private rented sector are not made to pay excessive fees for what is perceived to be minor damages.

Other important amendments brought forward in the reading Bill brought include steps by the Government to reduce tenant wait times to receive their money by reducing the timeframe that landlords and agents can pay back charges deemed unlawful.

The National Landlords Association (NLA) has lobbied the government in trying to bring the initial plans for the bill more in line with how it looks today, and report that they are pleased to see that the cap on security deposits was not been reduced from six weeks in the recent hearing.

The organisations lengthy lobbying process was designed to ensure landlords were still afforded a degree of flexibility to adjust security deposits when there is potential for higher risk, such as taking on tenants with pets, whilst still keeping within the remit of the original bill proposal.

The NLA also noted that they welcome the focus on enforcement and the commitment of £500k towards enforcing regulations. This is an important factor that they feel has been lacking in many areas, which was pointed out in evidence presented to the Public Bill Committee in June. They are prepared to push for further interventions and a greater level of funding to ensure local authorities are enforcing regulations to target and rid the private rented sector of criminal landlords.

The clarifications made on the level of the payments, ie reasonable incurred costs, and the need to set out in the tenancy agreement what these payments cover are welcome additions that will make these payments clearer for both landlords and tenants. However, it should be noted that landlords do not routinely take advantage of default payments and this has the potential to disadvantage small landlords who self-manage their properties. It is unlikely that these landlords would be able to charge for their time in rectifying any defaults as ‘incurred costs’, as it may not be easy to provide the necessary evidence.