The report and third reading in the House of Commons for the Tenant Fee Ban Bill was held on the afternoon of the 05 September 2018. The full transcript of the proceedings can be read at:
However, to make it easy we have read it through and highlight what we consider to be the main points, positive or negative.
Amendment 5 prohibits there being another agreement, outside the tenancy, for tenants to pay fees. This will stop agents not having a charge in the tenancy but in a side agreement. As a fee “in connection with” (as per the new definition) the tenancy it was probably not allowed anyway but they have very clearly shut this down.
We have always said that the original drafts banned relocation agents from charging fees. Amendment 7 confirms relocation agents are not intended to be covered by the legislation. It will be acceptable to charge tenants for finding a property, but only if you are not also paid by the landlord.
The original drafting in Schedule 1 para 4 sub para (3) only allowed for the landlord to charge for default payments. Amendment 27 allows for the costs of the agent if the tenant is in default, not just the landlord.
Where costs for default are being sort by the landlord or agent amendment 28 requires the production of invoices for charging tenants in default. This is to try and stop charges being raised without justification and makes it easier for the tenant to challenge if the charges are “reasonable”.
Amendments 24, 25, 29 and 42 make changes to parts of the legislation to confirm it is OK for a relevant person (someone acting on behalf of the tenant) to pay money to the landlord or agent in lieu of the tenant, for example the rent, without it being a prohibited payment.
The original draft of the legislation required that an unlawful payment ordered to be repaid, had to be repaid within up to 28 days. This amendment cuts that time to an expectation of normally being 7 days and exceptional up to a maximum of 14 days.
Amendments 9, 10, 12, 18, 19 and 43 deal with where a payment is due to be refunded to the tenant. What this requires is that the landlord or agent must get the tenant’s AGREEMENT about how it is refunded. For example, the holding deposit, it is normal for this to be transferred to the rent or tenancy deposit, under this proposal the tenant will have to agree to that and will have the ability to insist it is refunded. It might be a smart move to include this agreement in the application form. Other monies may be a little more difficult to deal with. For example, if a tenant leaves on property with a surplus you will need to have the tenant’s consent to use that surplus towards their next property.