A council’s warning to letting agents on its patch has resulted in £34,416 worth of unlawful fees and deposits collected since the ban being refunded.
Cherwell District Council in Oxford contacted lettings agents over the summer, resulting in some issuing refunds.
The council reminded the agents that since June 1, most fees have been banned while deposits are capped.
According to the authority, some agents have been slow to comply with the Tenancy Fees Act, and have continued to charge admin and renewal costs.
Cllr John Donaldson, lead member for housing, said: “The Government banned most letting fees because they were disproportionate, often poorly explained, and ultimately proved an obstacle to households in need of accommodation.
“I’m pleased to see that council officers have been monitoring local agents’ responses so closely in the months following the law coming into force.
“By taking decisive action early we have made it clear that non-compliance with this new legislation is not an option.”
If a charge that is prohibited under the ban is made in error, there are 28 days to make a refund or be fined up to £5,000.
Comments (8)
The biggest problem for us at the moment, is where we’ve issued a renewal on a contract taken out before June 2019, we then have to go to the DPS and arrange a refund of the original deposit to bring it down to 5 weeks equivalent, but there’s no mechanism for dealing with a pet deposit that has previously been taken. The amount of administration it takes to sort something that should be so simple is mind-blowing, and this is all work that we’re not getting paid for in real terms. It’s depressing.
Why don’t you charge the Landlord for this extra work ?
Would you classify that as a landlord expense? It’s making ourselves compliant – the landlord has no liabililty for any fines for this, and we didn’t pass the original tenant fees that we received onto the landlord. It’s the cost of doing business at the moment unfortunately
Definitely a landlord chargeable item if they want the tenant to sign a renewal tenancy then as long as you have told them about the costs then they should pay. Presumably you have explained to your landlords the extra work involved in signing a renewal tenancy especially where there has been an enhanced pet deposit paid pre TFB.
Can’t they just work out what the deposit of 5 weeks rent should be and return the difference? I haven’t renewed any tenancies yet so I don’t know how easy the system is to use, but I thought that they had said they had an automatic system to just keep 5 weeks rent and send a cheque for the rest?
They can do that – it’s an automatic service, but if you’ve taken (as we did previously) a £200 pet deposit – you either have to pass that back to the tenant in its entirely – which leaves the landlord with no protection, contrary to his original agreement to the tenancy, or you have to find a way to legally increase the rent on the property to cover the pet rent – up to the amount of the deposit held. If you just do a pet rent increase, the tenant could potentially be charge far more than the original agreed £200 – and as it wasn’t advertised in advance that you’d charge this extra rent – it’s not straightforward at all.
It would be so much better if – where the tenant is agreeable, a pet deposit is just kept in a place of safety for the event of any issues. Tenants are far keener to do this than to pay an extra rent according to the feedback from our tenants
a pet deposit is just kept in a place of safety for the event of any issues.
I’m sure the tenant will be more than happy for you to do this and break the law both on taking a deposit of more than 5 weeks rent and not protecting the deposit. They will be able to get their deposit back in full and between one and three times extra as a fine (HA 2004). Plus you run the risk of a fine for taking more than 5 weeks rent as a deposit (TFA).
If the tenant has a pet and doesn’t want to pay extra rent to cover potential damage then you need to issue a section 21. Based on articles in the press, if you are prepared to take a pet then you will have no shortage of tenants who will pay the higher rent. Make sure you explain to the current tenant that it is because the TFA limits how much deposit you are able to take and it is definitely not because the landlord is looking to recover the extra fees being paid
Fully aware that it’s not legal – the IF WE COULD was implied :). Thanks for the advice though