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Tenant Fees Bill: a fairer playing field for all is needed

MPs are currently debating the proposed Tenant Fees Bill, that’s due to be made law next year. The Bill recommends tighter regulations on tenancy deposits, holding deposits and default fees, proposing that all payments, apart from rent, default fees, security deposits of up to six weeks and holding deposits of up to one week, are prohibited.

As a member of ARLA, we are fully in favour of regulation – and behind the aim to safeguard tenants by ensuring renting costs and fees are affordable – however, we do feel that a complete ban on fees is unfair and counterproductive. For example, not allowing agents to retain the holding deposit when a tenant fails the referencing check will only serve, in the long term, to negatively impact tenants, not protect them, as these costs will have to be picked up somewhere else down the line and most likely by tenants, through rental increases, for example.

MPs are also debating how much security deposit a tenant should legally be required to provide. The current draft Bill states six weeks, but the Housing, Communities and Local Government Committee believes this should be reduced to five. We generally charge four weeks’ rent as a damage deposit but there are definitely circumstances where we feel a higher deposit is warranted. For instance, where there are pets in a property, and we are concerned that the legislation will prevent a landlord from doing this, which puts them at greater risk of financial loss from damage, as in some circumstances, even six weeks rent would not be considered enough to safeguard the landlord in case anything goes wrong.

Level playing field

Agents, on behalf of landlords, incur genuine costs when processing a new tenancy and vetting a potential tenant, and it also takes a lot of time. This includes initial admin for a holding agreement, referencing and credit checking (which we as the agent are charged for), creation of the tenancy agreement and other processes including the transfer of utilities on behalf of the tenants etc. What we should all be working towards, and fully supportive of, is a capped fee that would ensure that unscrupulous, rogue agents don’t rip off tenants, but there is a fair charge for the work and time involved.  A capped fee would provide a level playing field for agents and landlords, as well as tenants who would be protected from unnecessary and unfair costs.

Moving forwards

The Government needs to focus more on tighter regulation in dealing with rogue agents and landlords, rather than continuing to penalise good agents who play by the rules and do all they can to provide a compliant, honest and professional service to landlords and tenants.

Negligent agents, and landlords, do destabilise the private rented sector which is why we need to take a united stance against their activity, with the aim of driving them out of the sector altogether. Outlawing all fees that agents charge is not the way to do this, as some fees are justified and there to protect not just the tenant, but landlords and agents too. We hope the final Bill provides a more balanced approach to letting fees and clarity for all involved, in a market where progressive, and effective, regulation is vital.

To read the Draft Tenant Fees Bill in full, visit:


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