UPDATE: Draft Tenants’ Fees Bill published along with a consultation on mandatory CMP insurance provision.
The main measures contained in the draft Bill will:
- Cap holding deposits at no more than one week’s rent and security deposits at no more than 6 weeks’ rent. The draft bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
- Create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees and creating a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Civil penalties of up to £30,000 can be issued as an alternative to prosecution.
- Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees.
- Appoint a lead enforcement authority in the lettings sector.
- Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
The publication of the draft Tenants Fees Bill marks the next step towards banning fees charged by letting agents and landlords as a condition of granting, renewal or continuance of a tenancy in England.
The Government has also launched a consultation on making membership of client money protection schemes mandatory for letting and managing agents that handle client money.
The Government has confirmed it will introduce the Draft Tenants’ Fees Bill to Parliament today – 1 November 2017.
The Government announced in the Autumn Statement 2016 the Government announced they would ban letting agents’ fees. From April to June 2017 the Government held a consultation on introducing a ban on letting agent fees paid by tenants.
During the 2017 Queens Speech the Government announced they would bring forward a Draft Tenants’ Fees Bill. The Government said the Draft Bill would include measures to ban landlords and agents from requiring tenants to pay letting fees as a condition of their tenancy and measure to enforce the ban with provision for tenants to be able to recover unlawfully charged fees.
According to Inside Housing the Draft Bill will:
- Cap deposits at no more than one week’s rent and security deposits at no more than six weeks’ rent
- create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees
- create a criminal offence where a person has been fined or convicted of the same offence within the past five years. Penalties of up to £30,000 can be issued.
As a draft bill it will be issued first in a draft form to allow it to be looked at in detail before it is formally introduced.
Following today’s introduction, it will be examined either by a Commons or Lords select committee or by a specially created joint committee of both Houses of Parliament.
Only after this process is completed will the bill-proper finally see the light of day.