A major change is the landlord’s ability to charge for default fees which include lost keys, other security devices, and interest on rent overdue more than 14 days. Evidence of these costs must be provided by the landlord or agent before the tenant is charged, and interest cannot exceed more than 3% above the Bank of England base rate. These fees are called permitted payments.
If the landlord charges any other fees (for example for sending a letter chasing unpaid rent, a missed appointment with a contractor, a set fee for cleaning a room etc) then these are called prohibited payments. If the landlord has received a prohibited payment the tenant can apply to the First Tier Tribunal for the money to be returned. The landlord will also be unable to serve a Notice under Section 21 of the Housing Act 1988 until the prohibited payment is returned or the tenant has consented to the prohibited payment being put towards the rent or security deposit.
Powers were granted to local authorities in an effort to regulate those landlords and agents who are considered rogue and who are running unfit properties. These powers include a civil prosecution with a penalty up to £5,000 for a first offence. If the landlord commits a second offence the penalty rises to £30,000 and a possible banning order. The Landlord can then be banned from renting out any properties, potentially for life.
In addition to the Tenant Fees Act, new legislation to abolish Section 21 evictions is to be opened for consultation. This would potentially prevent the eviction of tenants by private landlords without good reason or with less than 8 weeks’ notice.
Steps are also being taken to improve living conditions for tenants, with an emphasis on shared homes. Mandatory licensing for ‘Houses in Multiple Occupation’ has been extended to include stricter rules on smoke and carbon monoxide detectors. If a private landlord does not deal with the health and safety hazards of the property, the tenant is able to apply for a refund of up to 12 months’ rent as compensation for the hazardous living conditions.
Many other steps are being taken to help improve the relationship between landlord and tenant. For expert advice on your rights as a tenant or landlord, contact us.