Proposed ban on fees for tenants
In November 2016, the government announced in its Autumn Statement that it plans to ban letting agent fees for tenants.
No timetable has been set for the new law needed to stop letting agents charging tenants.
Charges before you move in
Before you move in, most letting agents charge you for:
- drawing up the contract
- doing an inventory of the property
- doing credit checks to see if you’ve had problems paying bills in the past
- getting references from your employer, bank or previous landlord
- admin costs for things like phone calls and postage
You may also be charged for a right to rent immigration check.
You could also have to pay a holding deposit to ‘reserve’ the property before you sign a tenancy agreement.
It’s worth shopping around as charges vary.
Find out more about using a letting agent to rent a home.
What letting agents can’t charge you for
Letting agents should not charge you for:
- routine inspections during your tenancy
- anything they also charge the landlord for
It’s a criminal offence if a letting agent charges you to register with them or to show you a list of properties to rent.
What letting agents must tell you
Before you sign a tenancy agreement, make sure you find out about all the fees you’ll be charged.
Letting agents must clearly set out the fees they charge on their websites and in their offices. They must not mislead you. They must clearly describe:
- the cost of each fee including VAT
- what each fee covers
Fees don’t have to be published in this way for websites that just advertise properties, like Rightmove or Zoopla.
Rent in advance and tenancy deposits
Once you’ve signed the tenancy agreement, most letting agents ask you to pay:
Holding deposits to reserve a property
If you want to reserve a property, a letting agent may ask you to pay a holding deposit while they check your references.
Paying a holding deposit means:
- you’re committed to renting the property
- the landlord is committed to renting the property to you, subject to checks
Don’t pay a holding deposit or sign anything if you are not sure that you want the property.
Before you pay any money, ask the letting agent to confirm to you in writing:
- how the holding deposit will be used
- if it will be returned to you (this should happen if the landlord decides not to rent the property to you)
- if it will be used towards your tenancy deposit or rent
- if any of their fees will be taken from it
- when some of it may not be refunded, for example, if you give inaccurate information about yourself (they can’t legally keep all of it)
After you pay a holding deposit, the landlord shouldn’t ask you to pay a higher rent than you initially agreed. You have the right to change your mind and get all your holding deposit back if they do.
You can take the letting agent to court for breaking the agreement if they:
- refuse to give you back your holding deposit
- decide not to rent to you when all your references and credit checks were in order
Fees when your contract ends
When your tenancy agreement ends the letting agent can ask you to pay for:
- renewing your tenancy agreement
- an inspection of the property when you move out (if they told you about it when you moved in)
- professional cleaning costs (if your tenancy or deposit agreement allow for this)
You don’t have to pay a fee to stay on after the fixed term ends if you don’t sign a new agreement.
How to complain about letting agent fees
You must contact the agency first to complain about fees that are hidden or unclear.
You can complain to a letting agent redress scheme if the letting agent doesn’t resolve the problem. Letting agents must be a member of a redress scheme.
If fees are unlawful or the agency doesn’t belong to a redress scheme you can complain to your local council’s trading standards department through Citizens Advice.
Only agencies themselves can deal with complaints about the level of fees.
To read the official post click below