What Landlords Need To Know About The Tenant Fees Act

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The Tenant Fees Act 2019 comes into force on 1st June 2019.

Otherwise knows as The Tenant Fees Ban or The Tenant Fees Bill, the aim of the Act is to reduce the costs that tenants incur at tenancy application stage and throughout the tenancy. The legislation applies to Assured Shorthold Tenancies (ASTs) but not company lets.

The Government claims it’s rebalancing the relationship between tenants and landlords to deliver a fairer, good quality and more affordable private rented sector. Many landlords and letting agents may disagree with this claim.

What can landlords or agents charge?

The changes mean landlords will only be able to charge for:

  • Holding deposits

  • Rent

  • Security deposits

  • Utilities

  • Council tax

  • TV licence

  • Communication services (a telephone other than a mobile telephone; internet; cable or satellite television)

  • Tenancy amendments at the tenant’s request

  • Damages for breach of a tenancy agreement

  • Interest on late rental payments

  • Loss of keys

What can’t a landlord or agent charge?

All other fees are banned under the Act, including:

  • Administration fees

  • Credit checks and referencing

  • Inventories

  • Cleaning/de-infestation

  • Gardening

Essentially, tenants will be able to easily see what a rental property will cost them – with no hidden costs. The landlord will be responsible for paying for the letting service.

Control of tenant costs

Additional resolutions under the Act ensure that the tenant is not unduly or unfairly out of pocket:

Holding deposits

Holding deposits taken by landlords or agents to reserve a property will be capped at the equivalent of one week’s rent. The landlord must make a decision on whether or not to proceed with the tenancy in fifteen days of receipt of the holding deposit.

If the landlord decides not to proceed, the holding deposit must be returned within seven days of the deadline being reached.

If the tenant doesn’t proceed with the tenancy, the landlord is permitted to make a reasonable deduction to cover costs incurred.

If the tenancy proceeds, the holding deposit can be used as part payment for the holding deposit or rent otherwise it must be returned to the tenant within seven days.

Security deposits

Security deposits will be capped at the equivalent of five weeks’ rent where the annual rent is below £50,000. Deposits for tenancies where the annual rent is £50,000 or more will be capped at the equivalent of six weeks’ rent.

Amendments to the tenancy agreement

Charges for amendments to a tenancy agreement must be reasonable. They will be prohibited if the amount of the payment exceeds the greater of £50 or the reasonable costs of the landlord or letting agent in respect of the amendment of the tenancy.

Breaches and damages

Where the tenant has breached the terms of the tenancy agreement, damages such as repairs, for example, may be claimed at the end of a tenancy. Naturally, any deductions from the security deposit must be agreed between the landlord and the tenant.

Landlords or agents will only be permitted to charge 3% above the Bank of England base rate for interest on late payments of rent. Charges can no longer be made for sending reminder letters.

Landlords or agents will be permitted to make a reasonable charge in the event that keys are lost. However, the cost must be evidenced in writing, i.e. receipts.

What happens if a banned fee is charged?

Tenants will be able to recover any wrongly charged and paid fees, possibly with interest, via the courts. In addition, the local trading standards office will issue a fine of up to £5,000 for a first offence. Subsequent infringements may incur fines up to £30,000 as well as a ban.

Furthermore, the Section 21 notice cannot be served if a banned payment is still being held by the landlord or agent. Landlords and agents must either refund the payment or, with the tenant’s permission, use that money as payment towards rent and/or the deposit.

Landlord and agent revenue and business models

One agent in the West Midlands charges a single tenant £360 in set-up fees with each additional applicant being charged £240.

That’s an eye-watering £600 for a couple before they even have to think about the rent and security deposit. And to think that a full reference can be obtained for as little as £18…

If this company lets 20 dual-applicant properties in a month, they have already lost £12,000 in revenue per month. This a substantial amount of revenue and will surely have an impact on the business. This will probably lead to higher costs to landlords (and rent increases).

Landlords and agents will have to carefully review their business models.

Celsium Winner of 2018 Corporate Immigration & Relocation Awards

Celsium Winner of 2018 Corporate Immigration & Relocation Awards

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The award, which recognises the very best firms and professionals who work to ensure the most instrumental individual is present in the most opportune place, at the right time to have the greatest impact for all stakeholders, was presented by Acquisition International

EU Settlement Scheme

EU Settlement Scheme

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The statement of intent document is 60 pages long, so for those of you who don't have time to read through it, here are the main points:

Calling Time on Rogue Landlords and Agents in London

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The Rogue Landlord and Agent Checker has been launched that will allow tenants to check landlords and agents before they sign a tenancy agreement.

The checker, from the Mayor of London, lists those landlords and lettings agents who have been successfully prosecuted or have faced civil enforcement action for housing offences, along with details of the offences and the properties to which they relate.

At the moment, 10 of the 32 London councils have published data (equivalent to 25% of renters), with another 8 councils to submit data in the coming weeks.

Property Rental Prices in Great Britain: November 2017

Property Rental Prices in Great Britain: November 2017

Private Rental Prices Still Increasing in England, Scotland and Wales

  • Rental prices paid by tenants in Great Britain (England, Scotland and Wales) increased by 1.4% in the 12 months to November 2017.

  • Rental prices for Great Britain excluding London increased by 1.8% in the 12 months to November 2017.

  • Rental prices for London increased by 0.6% in the 12 months to November 2017. This is the lowest annual increase in London since October 2010.

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A major player in Dubai, blueground leases and upgrades high-quality properties in the most sought-after locations, and subsequently rents them out to business travelers for mid-to-long term duration.

Celsium Powered by Brunel - City Centre Office Relocation

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You may have read last week that Celsium Global Mobility Solutions has been acquired by Brunel International N.V., a leading global workforce mobilisation company headquartered in the Netherlands. If you haven't heard this exciting news, you can catch up here.

As part of the acquisition, Celsium Global Mobility Solutions has been rebranded as Celsium Powered by Brunel and we have relocated to new offices based in the heart of Birmingham's city centre business district. 

Brunel International N.V. Acquires Celsium Ltd.

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We are delighted to announce Celsium’s acquisition by Brunel International N.V., a leading global workforce mobilisation company headquartered in the Netherlands. Celsium extends Brunel’s global mobility capabilities and brings further expertise for continued innovation in the staffing and employee mobility markets.

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We are delighted to announce that Celsium has won the ‘Newcomer of the Year’ category in the City of Birmingham Business Awards 2017.

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This will be the country's sixth airport, in addition to Muscat, Salalah, Sohar, Duqm and Khasab, according to Times Of Oman.

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According to a survey from industry body Tech London Advocates, nearly two-thirds of London’s tech entrepreneurs believe Britain’s vote to leave the European Union has already damaged the international reputation of the city’s tech sector, although they still said it was the best place for start ups.

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In July 2017, the Government commissioned the Migration Advisory Committee (MAC) to advise on the economic and social impacts of the UK’s exit from the European Union and also on how the UK’s immigration system should be aligned with a modern industrial strategy.

The areas outlined below provide a general indication of the information the MAC is reviewing:

Part 1 - EEA Migration Trends

Part 2 - Recruitment Practices, Training & Skills

Part 3 - Economic, Social and Fiscal Impacts

Celsium nominated for City of Birmingham Business Awards

The inaugural City of Birmingham Business Awards, known as #COBBA17, is held to celebrate outstanding individual and corporate success throughout the region and will be hosted by Downtown in Business on the evening of Thursday 9th November at Edgbaston Stadium.

EU workers reluctant to relocate for a UK job

Employers in the UK are finding it harder to fill jobs after the steepest decline in candidate availability for 16 months, according to the Recruitment & Employment Confederation (REC).

The REC report which compiled data from 400 recruitment companies shows Brexit influence on the jobs market as workers become more reluctant to move jobs and EU nationals less likely to relocate to the UK due to uncertainty over future immigration rules.

UK: Immigration Fee Changes

The UK Home Office will implement updated fees for immigration and nationality applications from Thursday 6th April 2017.

Previous years have seen advance warning from the Home Office that changes would take place; this year, the fee increases were laid before Parliament just days ago with no official announcement.

There are to be increases to fees across a number of immigration categories, with the most significant increase to an application for Indefinite Leave to Remain, or Settlement, made from within the UK. The charge for an application of this type will increase by £422 to £2297.

US: February Visa Bulletin Update

USCIS has determined that, next month, it will only accept employment-based adjustment of status applications from foreign nationals with a priority date that is current for final action under the State Department’s February Visa Bulletin.

Employment-Based Priority Date Cut-offs for February 2017

To be eligible to file an employment-based adjustment application in February, employer-sponsored foreign nationals must have a priority date that is earlier than the date listed below for their preference category and country.

US: President Trump Suspends Entry of Foreign Nationals from Seven Countries

President Donald J. Trump has signed an executive order that reportedly suspends the entry of foreign nationals from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen to the United States for a period of 90 days, or through April 27, 2017. The order also reportedly suspends a worldwide program that exempted certain visa renewal applicants from consular interviews.

Although the order has been signed and is in effect, the Administration has not yet released the final signed text. The following guidance is based on Fragomen’s analysis of a draft. The final published order may differ, and Fragomen will provide updates as necessary when it is released.

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Foreign employers seconding employees to Bulgaria must comply with new notification and document retention rules by February 10, 2017.

Notification Rule Details

Foreign employers seconding employees to Bulgaria must file a form with the Labor Inspectorate by February 10, 2017. The foreign employer may authorise the Bulgarian host entity to file the form on its behalf through a representative employee.