The Government has clarified what letting agents can charge tenants for ahead of the Tenant Fee Ban on 1st June. Letting agents should make immediate note of allowable fees, and ensure their tenancy agreements and associated paperwork reflects the new structure.
What agents can still charge for
- the rent
- a refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the annual rent is £50,000 or more
- a refundable holding/reservation deposit, limited to one week’s rent
- payments to change the tenancy when requested by the tenant, limited to £50, or reasonable costs incurred if higher
- payments associated with early termination of the tenancy, when requested by the tenant
- payments in respect of utilities, communication services, TV license and council tax
- a default fee for late payment of rent
- replacement of a lost key/security device, where required under a tenancy agreement
Agents will be acutely aware that the above list precludes many of the detailed, time-consuming tasks associated with starting and subsequently managing a tenancy. With the ban imminent, letting agents will need to carefully consider if they pass some of the costs on to landlords or whether they restructure their business to compensate.
ARPM has worked with a number of estate and letting agents and property managers to future-proof their businesses, with agents able to reduce fixed costs and balance books as a result of our outsourced services. To receive tailored advice and your own personalised business plan, get in touch today.
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