More residential leases affected by statutory limitation on what a landlord may charge

England and Wales

From 1 June 2020 the Tenant Fees Act 2019 is extended to apply to all applicable tenancies and licences to occupy housing in the private rental sector in England (whether newly entered into from that date or an existing tenancy/licence).

The Act already affects landlords of applicable tenancies and licences entered into from 1 June 2019.

The Act limits the payments that a landlord can charge in connection with most short term residential tenancies. Its purpose is to reduce the costs that tenants face at the start of and during the tenancy and is part of a wider set of measures aimed at rebalancing the landlord and tenant relationship, in order to deliver a more affordable private rental sector.

The so called “ban” under the Act applies to all assured shorthold tenancies (ASTs), tenancies of student accommodation and most licences to occupy housing in the private rental sector in England. Since the majority of tenancies in the private rental sector are ASTs, the ban is and will be very impactful for landlords of residential properties and their advisors, and there are substantial financial penalties for a breach.

The letting fees ban applies to new ASTs in Wales entered into on or after 1 September 2019.

Please click here for our original article on the impact of the Tenant Fees Act.