The private rental sector in the UK has undergone significant changes in recent years, with one of the most notable being the Tenant Fees Act 2019. Designed to make renting more transparent and affordable, the Act set clear limits on what landlords and letting agents can and cannot charge tenants.
Whether you’re a landlord adjusting to the new rules, a tenant trying to understand your rights, or even exploring property opportunities with letting agents in Southampton City, knowing the ins and outs of this legislation is essential.
This article breaks down the Tenant Fees Act into plain English, explaining what it covers, how it affects landlords and tenants, and what you need to know to stay compliant.
What Is the Tenant Fees Act?
Introduced in June 2019, the Tenant Fees Act aims to reduce hidden costs in renting by banning most upfront fees charged to tenants. Before its introduction, landlords and letting agents often charged tenants for services such as credit checks and administrative tasks, which added hundreds of pounds to the cost of moving into a property.
The law now strictly limits what landlords can charge, ensuring greater fairness and consistency in the rental process.
Who Does It Apply To?
The Tenant Fees Act applies to:
- Assured Shorthold Tenancies (ASTs)
- Student accommodation agreements
- Licences to occupy housing in England
It covers both new tenancies and renewals signed after 1 June 2019. Since June 2020, it has applied to all existing tenancies as well, meaning landlords and letting agents must comply across the board.
What Fees Are Permitted?
The Act doesn’t mean that tenants won’t pay anything at all—only that charges are limited to certain permitted fees. These include:
- Rent – Regular rent payments are, of course, still allowed.
- Refundable Tenancy Deposit – Capped at five weeks’ rent for annual rents under £50,000, or six weeks for higher rents.
- Refundable Holding Deposit – To reserve a property, capped at one week’s rent.
- Default Fees – Limited charges for late payment of rent or replacement of lost keys/security devices.
- Early Termination – If requested by the tenant, costs must be reasonable and no more than the landlord’s loss.
- Utilities and Services – Charges for utilities, TV licence, broadband, or council tax if agreed in the tenancy.
What Fees Are Banned?
The Act prohibits landlords and agents from charging for services that were once common. Examples of banned fees include:
- Charges for viewing a property.
- Tenancy set-up or admin fees.
- Charges for renewing a tenancy.
- Check-out fees at the end of a tenancy.
- Third-party fees, such as referencing or credit checks.
This shift ensures that tenants aren’t burdened with hidden costs when renting a home.
The Impact on Landlords
The Act brought significant changes for landlords in how they manage costs. Landlords must now cover many expenses that they previously passed on to tenants.
This has led some landlords to increase rent slightly to offset the changes. However, transparency is now a crucial part of the rental process, and failing to comply with the Act can result in hefty penalties.
Working with professional letting agents in Southampton City can help landlords remain compliant, as reputable agents ensure tenancy agreements and processes follow current legislation.
The Impact on Tenants
Tenants are the clear beneficiaries of the Act, with lower upfront costs making renting more affordable. Instead of facing a barrage of unexpected charges, renters now know exactly what to expect when moving into a property.
However, tenants should still be aware of their obligations, particularly around paying rent on time and looking after the property. While the Act reduces unfair charges, it does not remove the responsibilities of being a tenant.
Penalties for Non-Compliance
Failure to comply with the Tenant Fees Act carries serious consequences:
- First offences can result in fines of up to £5,000.
- Repeat offences within five years may lead to unlimited fines and banning orders.
- Landlords or agents who charge prohibited fees cannot serve a valid Section 21 notice until the money is repaid.
This highlights just how important it is for landlords and letting agents to understand and follow the rules.
Common Misconceptions About the Tenant Fees Act
Like many changes in property law, the Tenant Fees Act has created some confusion. Let’s clear up a few common myths:
Myth 1: “All deposits are banned.”
False—tenancy and holding deposits are still permitted, but they are capped to prevent excessive charges.
Myth 2: “Landlords can still charge admin fees if agreed in the contract.”
Incorrect—the Act bans these fees regardless of what is written in the tenancy agreement.
Myth 3: “The Act only applies to new tenancies.”
Not true—since June 2020, it applies to all existing tenancies in England.
Practical Tips for Landlords and Tenants
For Landlords:
- Review tenancy agreements to ensure compliance.
- Be transparent with tenants about permitted charges.
- Keep detailed records of deposits and any default charges.
For Tenants:
- Know your rights and check agreements for prohibited fees.
- Ask for receipts for any permitted payments.
- Report concerns to your local Trading Standards authority if you suspect unfair charges.
Why Professional Advice Matters
With property law constantly evolving, both landlords and tenants benefit from expert guidance. Professional letting agents in Southampton City can help landlords remain compliant while providing tenants with reassurance that the process is fair and transparent.
From drafting agreements to managing deposits, working with knowledgeable agents reduces the risk of mistakes and ensures everyone understands their rights and responsibilities.
Conclusion
The Tenant Fees Act has reshaped the rental market in England, eliminating unfair charges and creating a more transparent process for tenants and landlords alike. By banning most upfront fees, the Act has levelled the playing field, ensuring that costs are clear, predictable, and regulated.
For landlords, the Act means taking on greater responsibility for certain expenses, but also provides an opportunity to build trust and long-term relationships with tenants. For tenants, it means moving into a property is more affordable and straightforward than before.
Ultimately, understanding the Tenant Fees Act is vital for anyone involved in the rental market. By staying informed and seeking expert support when needed, both landlords and tenants can ensure smooth, compliant, and fair rental experiences.
