Limiting what landlords and letting agents can ask tenants to pay, the Tenant Fees Act came into force in England on 1st June 2019, with the goal of making renting fairer and more transparent. The Act brings clarity to a sometimes confusing sector, as tenants know exactly what their costs will be, and landlords can avoid inadvertently overcharging renters and invoking penalties as a result.
© fizkes / Shutterstock
Why was the tenant fee ban introduced
Prior to 2019, renters often faced a bewildering array of fees such as general administration costs, compiling inventories and end-of-tenancy cleaning. On occasion, the fees disproportionately inflated the cost of renting.
The tenant fee ban clamped down on financial practices deemed unfair by detailing the types of permitted payments and outlawing everything else. This has improved affordability and helped tenants predict costs and manage their budget, while enabling landlords and agents to be more competitive and transparent.
What can landlords charge?
Under the Tenant Fees Act, landlords and agents can charge tenants only for specific items, apart from the rent itself. Deposits for assured shorthold tenancies are capped at either five weeks’ rent for properties with annual rent of less than £50,000, or six weeks when the rent reaches or exceeds this threshold. A refundable holding deposit to reserve a property is permitted, but is capped at no more than one week’s rent.
Charges connected with changes to the tenancy such as a tenant’s request to vary or surrender the agreement are allowed, but must be limited to either £50, or any “reasonable costs” incurred, whichever is less. Similarly, landlords can charge for actions such as late rent payment or lost key replacement, but the fee must reflect the actual cost or statutory cap. Utility, telephone and internet bills, council tax and TV licence fees can be recouped only if the landlord pays for them first. All of the permitted payments are defined by Schedule 1 of the Act.
What is prohibited?
Any fee not specifically included among permitted payments is outlawed – common examples include charges for obtaining references and credit checks; professional inventory services; bills for inspections at the beginning and end of the tenancy; administration or viewing fees; and professional cleaning after the tenancy ends.
Tenancy deposits must be placed in a government-approved deposit protection scheme within 30 days. If a tenancy agreement is signed, a holding deposit to secure the home must be returned to the tenant within seven days, or can be used towards the first month’s rent or the security deposit, with the tenant’s agreement. If a landlord decides not to proceed with the tenancy, the holding deposit must also be returned within seven days.
Refusing to repay a deposit is permitted only under specific conditions, such as the tenant providing false or inaccurate information during the referencing process, or backing out of the tenancy agreement after the landlord has offered fair terms.
Regional differences in the Home Countries
In Wales, the equivalent legislation is the Renting Homes (Fees etc) (Wales) Act, which came into effect on 1st September 2019, with similar restrictions to England’s Tenant Fees Act. Wales now prohibits many tenant charges and has introduced capped deposits and rent.
The Welsh Act of 2019 prohibits landlords and letting agents from charging tenants for administration fees, reference fees and credit check costs. This ban applies to new tenancy agreements entered into on, or after, 1st September 2019, and also includes start or end-of-tenancy charges and guarantor and inventory fees.
Scottish law takes a slightly different approach under the Private Rented Housing (Scotland) Act 2011 and earlier legislation, such as the Rent (Scotland) Act 1984. Landlords and agents are prohibited from charging any additional fees beyond rent and a deposit. Tenants can’t be charged for compiling an inventory, referencing, administration or contract renewal services.
Northern Ireland introduced the Private Tenancies Act 2022, effective from April 2023, which limits tenancy deposits to a maximum of one month’s rent, extends deadlines for deposit protection and prohibits any fees that indirectly benefit the landlord. While it does not mirror English law exactly, it strengthens tenant security.
Penalties for non-compliance
A first breach of the Tenant Fees Act can lead to a fine of up to £5,000, while repeat offences within five years can escalate to criminal charges or civil penalties up to £30,000. In addition, the Act prevents landlords from issuing a Section 21 notice to repossess a property until any prohibited fees have been repaid to the tenant.
Landlords or agents charging banned fees may face enforcement by Trading Standards in England and Wales and also by Rent Smart Wales. Tenants may also reclaim unlawfully charged fees through the First-Tier Tribunal. On top of financial sanctions, errant landlords face a loss of reputation, potentially hampering their prospects of finding good tenants in future.
Does the law apply to furnished properties?
Tenants living in fully furnished properties with landlord furniture packages included in the inventory at the start of their tenancy can’t be charged for general wear and tear. When an item of furniture needs repairing or replacing after regular use over a period of time, the landlord is responsible financially.
The only time tenants are liable to pay for a repair or replacement item is if they have damaged the existing one due to negligence. An example may be if a pet has chewed soft furnishings, or if drinks such as red wine have been carelessly spilled on a fabric sofa. In this situation, while the landlord may source replacement furniture packages to ensure compliance with fire safety laws, the tenant can be asked to foot the bill, as long as this is clearly stated in the tenancy agreement and is not excessive.
A landlord can’t add hidden charges for providing or removing furniture, or require renters to pay for cleaning, as long as it has been subject only to regular use. If the tenants have brought their own furniture, they are solely responsible for its maintenance and replacement costs and this doesn’t fall under the landlord’s remit.
What kind of misunderstandings occur?
A common mistake is charging tenants for professional cleaning at the end of their tenancy as a mandatory fee. While they must leave the property in good condition, they are not liable for professional cleaning costs, unless damage beyond fair wear and tear warrants a deduction from the tenants’ security deposit.
Another frequent landlord misconception is adding a charge for seeking references and carrying out a credit check. Tribunal cases have routinely reduced excessive fees that landlords have deducted from deposits, ruling that they must demonstrate actual costs. Similarly, if a landlord charges more than the £50 cap for tenant-requested changes to the contract, this can be reviewed by a tribunal. In 2022, a tribunal reduced a £170 charge for replacing a flatmate on the tenancy agreement to £58.40, stating this was a reasonable, evidence based cost.
Thoughtful property managers and landlords who engage with the spirit (as well as the letter) of the law build trust, avoid sanctions and help uphold fair renting practices across the UK.