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Consultation on Tenant Fees has opened

Published: 12/04/2017   Last Updated: 26/04/2017 12:21:01   Tags: Tenant Fee Ban, Housing Policy, Letting Agent Fees

Consultation on Tenant Fees has opened


The consultation on on the proposed ban on Tenant Fees by Department for Communities and Local Government has opened on the 7th April 2017 and will remain open for eight weeks, closing on 2 June 2017.

           

Key points taken from the consultation:

The Government proposes to introduce legislation which will mean that:

1. No agent, landlord and any other third party will be able to charge tenants any fees, premiums or charges that meet the general definition of facilitating the granting, renewal or continuance of a tenancy; and

2. Tenants should only be required to pay their rent and a refundable deposit.


However, there are certain costs that arguably should continue to be met by the tenant:

1. Holding deposits to take the property off the market whilst reference checks are undertaken; and

2. In-tenancy property management service charges arising because of the action of the tenant – such charges could include arranging for replacement keys, repairs carried out as a result of deliberate damage or breach of the tenancy agreement, or late rent payment charges.

 

Agents may occasionally provide bespoke, non-standard services to tenants at the top end of the market, for example, when arranging a property for someone currently living abroad who is relocating to the UK. The Government is keen to understand whether there are premium parts of the market where a different approach to handling letting fees may be warranted.

            

The Government believes that robust and effective enforcement is central to the successful implementation of the ban on letting agent fees paid by tenants. The Government proposes that the ban should be enforced by local authorities, primarily Trading Standards but recognises that Trading Standards may require additional support in order to ensure that enforcement of the ban is effective. The Government is therefore keen to explore the views of the sector on a number of issues including further regulation of the sector.


The leading industry body, the Association Of Residential Letting Agents (ARLA) to which Dwell Leeds are members, described the Government’s housing policy as 'shambolic' and said that their consultation contradicts its already stated aim to encourage longer term tenancies. Independent analysis launched at ARLAPropertymark’s annual conference last week revealed that if an outright ban was introduced, rents will increase by £103 per year which will punish long term tenants financially.


David Cox, the Chief Executive of ARLA said "The decision is a short-term crowd pleaser and we are disappointed DCLG has not considered our proposals in today’s consultation. We urge the Government to use this process to think again to ensure that consumers, and the wider economy are not penalised by contradictory Government policies."