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More legal challenges ahead for residential landlords


As landlords and letting agents should already be aware, a draft Tenant Fees Bill was published at the end of last year. The Bill aims to make it easier for tenants in the private rented sector to see how much a property will cost them to rent, without being hit by extra fees. It will prohibit landlords and letting agents from requiring tenants to pay fees and other charges on top of the rent as a condition of obtaining a tenancy. The Bill, in its current form, will also cap security deposits at no more than 6 weeks’ rent and holding deposits at no more than 1 week’s rent. It will also introduce new civil and criminal offences for breaching the ban with a civil penalty of £5,000 and criminal offences for subsequent breaches or a civil penalty of up to £30,000 as an alternative to prosecution.

The move has been criticised by those in the private rented sector in that the proposals are potentially double-edged and could lead to higher rents as letting agents will need to recoup losses by passing them on to landlords, who in turn will be forced to pass on higher costs to their tenants.

The Bill forms part of a larger review of the private rented sector. Consultations have also recently been launched on mandatory client money protection schemes for letting and managing agents in England and on barriers to longer term tenancies, as well as a ‘call for evidence’ by the Government on rent-a-room relief: a scheme which provides income tax relief for those letting out furnished accommodation. The property redress scheme, which is a government authorised consumer redress scheme, may also be given a shake-up with a move to a single Housing Ombudsman to cover the entire housing sector including social and private rentals and new build homes, under contemplation.

The last three years have seen many changes in the law affecting private residential tenancies and clearly with more on the horizon it is unsurprising that landlords are quitting the lettings sector with a recent report by housing charity Shelter suggesting that one in ten landlords are quitting each year. But with other reports estimating that a quarter of households in the UK will rent privately by the end of 2021 the sector is still an attractive proposition; the key is for landlords and their agents to be well informed and to prepare for changes in the law well in advance so that they are not caught out.

For further information relating to the points raised in the above article, please contact Johanne Spittle, Partner in our Property Litigation team.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.


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