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Wed 5 June 2019
Tenancy Deposits - New Rules
As part of the Tenant Fee Ban, known as the Tenant Fees Act 2019, which comes into force on 1st June 2019, there are a number of new rules affecting residential tenancies that landlords should be aware of. One of the new rules concerns deposits.
From 1st June, tenancy deposits will be limited to the equivalent of five weeks’ rent, for any tenancy with an annual rent of up to £50,000. If the rent is between £50,000 and £100,000 per annum, the deposit is limited to six weeks’ rent.
Holding deposits will be capped at one week’s rent and can only be held for up to 15 calendar days, unless agreed otherwise in writing.
The Tenancy Deposit Protection legislation has been in place for many years. However, there are still many landlords who are unaware of the requirements involved and continue to put themselves at risk of potential penalties and even being unable to regain possession of their property.
Getting the Tenancy Deposit Protection right is just one of many changing factors landlords must keep on top of. To help, we have outlined the key points all landlords should be aware of when dealing with a tenant’s deposit:
Samuel & Son is a member of the Deposit Protection Service (DPS) and as a result you can be assured that your tenant’s deposit is registered and protected in the correct way, providing you with peace of mind.
Where you have taken a tenancy deposit yourself, if you are unsure whether you have registered your tenants’ deposit correctly and would like further advice, please contact our lettings department at our Horam office.
The Tenant Fee Ban, known as the Tenant Fees Act 2019, came in to force on 1 June 2019
The ban on tenant fees applies to Assured Shorthold Tenancies (ASTs) only, which are signed (by all parties) on or after 1 June 2019, regardless of the tenancy start date.
If you have an agreement to let to a company or the rent is over £100,000 per annum the tenant fee ban will not apply. If, after 1 June 2019, the terms of your tenancy agreement change and fall in to the category of an AST, the tenant fee ban will then apply.
From 1 June 2019 it is illegal for letting agents or landlords to charge fees to tenants apart from a small number of fees which are referred to as ‘permitted payments’.
If a renewal is signed on or after 1 June 2019, the new fees will apply as above. On renewal you/ a letting agent will also be required to repay any difference in the deposit to the tenant if they have paid over the new limit as detailed above.
If your tenant has a tenancy which is signed on or before 1 June 2019 and isn’t due to be renewed before 31 May 2020, the deposit will need to be refunded once it reaches the end of the fixed term and is renewed.
If you'd like any further help or friendly advice, contact our Samuel & Son lettings department at our Horam office.