Banned tenant fees and penalties for landlords
Fees that landlords or agents cannot charge, enforcement of the tenant fees rules, sanctions, and appeals.
- Fees that landlords and agents can charge
- Payments by relevant persons
- Tenancies and licences covered
- Restriction on section 21 notice
- Action by tenant or licensee
- Enforcement authorities
- Financial penalties for landlords and agents
- Enforcement authority notice of intent
- Enforcement authority final notice
- Landlord or agent appeals
Fees that landlords and agents can charge
The permitted payments are:
tenancy deposit (up to maximum of five or six weeks’ rent)
holding deposit (up to maximum of one week’s rent)
a fee in the event of a ‘relevant default’
damages for breach of agreement
in respect of council tax, utilities, communication services and TV licence
Most of permitted payments are capped. Any part of a fee that exceeds the permitted amount is a prohibited payment.
Payments by relevant persons
The tenant fees rules apply to payments made by:
any other person acting on the tenant or licensee’s behalf
They are referred to as 'relevant persons' in the legislation.
Tenancies and licences covered
The tenant fees rules apply to payments in connection with:
assured shorthold tenancies
most licences to occupy housing
student lettings provided by specified educational institutions
Lodgers of resident landlords and tenants of houses in multiple occupation are covered.
From 1 June 2020, the ban on prohibited payments applies to all agreements listed above regardless of their start date. For tenancies that began before 1 June 2019 and have not been renewed since, the ban applies only to prohibited payments on or after 1 June 2020.
Any term in an agreement requiring the payment of a prohibited fee is not binding.
Between 1 June 2019 and 31 May 2020 the prohibition applied only to tenancies and licences that started or were renewed on or after 1 June 2019. It did not apply to statutory periodic tenancies arising between 1 June 2019 and 31 May 2020.
If the landlord or agent charged a deposit above the permitted cap before the rules came into force and a new fixed-term agreement is signed afterwards, they must repay any amount above the cap. If the deposit is protected in a tenancy deposit protection scheme, the government guidance suggests a 10-day time limit for the refund to take place.
The tenant fees rules apply to registered providers of social housing (both local authorities and housing associations) only where they are letting an assured shorthold tenancy in the private rented sector.
Certain authorities and letting types are not covered by the tenant fees rules.
Authorities to which the rules do not apply
The following authorities are not classed as relevant persons:
local housing authorities
the Greater London Authority
any organisations acting on behalf of the above two
The exclusion of these authorities from the definition of 'relevant person' is not limited to any particular functions, but will often be relevant where authorities are exercising homelessness functions.
The effect of the exclusion is that where these authorities make payments on behalf of a tenant or a licensee, it cannot be a 'prohibited payment'. This means that they can offer payments to private landlords and agents, for example 'finders’ fees’ or tenancy deposits.
Lettings to which the rules do not apply
Payments of fees in connection with the following are not covered:
other types of letting in the private rented sector, including fully assured tenancies
tenancies and licenses of social housing
'excluded licences' in the private rented sector
The only ‘excluded licences’ in the private rented sector are Homeshare type of licences. The exclusion is intended to exclude certain charities that help facilitate home sharing arrangements in the private rented sector which have a social benefit, for example the prevention of loneliness of the elderly.
The excluded licence must be:
arranged between the licensee and licensor with the assistance or advice of a registered charity or Community Interest Company (usually a registered Homeshare organisation) in connection with the grant, renewal or continuation of the licence
arranged in order to provide the licensor with companionship sometimes combined with care or assistance (other than financial assistance)
for no rent or other consideration, except for payments in respect of council tax, utility bills, a communication service or a television licence
Restriction on section 21 notice
A landlord cannot serve a section 21 notice to end an assured shorthold tenancy until any prohibited payment or unlawfully retained holding deposit has been repaid, or with the relevant person’s agreement, credited towards their rent or tenancy deposit.
There is no similar sanction restricting the service of a notice to quit on licensees or tenants who are not assured shorthold tenants.
Action by tenant or licensee
A tenant or licensee who has paid a prohibited fee can take direct action to recover that money in the First-tier Tribunal. An enforcement authority can assist, for example by providing advice or by conducting proceedings.
There is no prescribed time limit for bringing a claim. However, if the claim is made more than six years after the breach occurred, it is likely that the landlord or agent could rely on the Limitation Act 1980.
Local trading standards are responsible for enforcing the rules.
District councils (that are not trading standards authorities) also have the power to take enforcement action against a landlord or letting agent that has required a relevant person to make a prohibited payment or breached the requirements relating to holding deposits.
Financial penalties for landlords and agents
An enforcement authority can impose a civil penalty if it is satisfied beyond all reasonable doubt that a landlord or agent has committed a breach of the tenant fees rules.
The civil penalty can be up to:
£5,000 for an initial breach
£30,000 for any subsequent breach within five years
A landlord or agent cannot be subject to a civil penalty if:
they have already been convicted or acquitted of an offence in relation to the conduct
criminal proceedings for the offence have been commenced
A landlord or agent cannot be convicted of an offence if a civil penalty has already been imposed in respect of the same breach.
An enforcement authority cannot impose a financial penalty for failure to repay a holding deposit if the landlord or agent decided that the tenant did not have the right to rent as a result of incorrect information provided by the Home Office.
An enforcement authority can require a landlord or agent who has committed a breach to repay to the relevant person the amount of any prohibited payment or holding deposit that has not been repaid, unless the relevant person has already made an application to the First-tier Tribunal to recover the payment.
Enforcement authority notice of intent
Before the enforcement authority imposes a civil penalty or requires the money to be repaid, it must serve a ‘notice of intent’ on the landlord or agent.
The notice must set out the:
date on which it is served
amount of the civil penalty
amount to be repaid to the relevant person
reasons for imposing the penalty
information about the right to make representations
The notice must be served within six months of the authority having sufficient evidence that the landlord or agent has required a prohibited payment or breached the requirements relating to holding deposits.
If the breach is or was ongoing, the notice must be served while the breach is continuing or within six months of the last day on which the breach occurred.
The landlord or agent has 28 days from the day after the date of service of the notice to make written representations to the authority.
Enforcement authority final notice
After the end of the period for representations, the enforcement authority must decide:
whether or not to impose a civil penalty
the amount of the penalty
The authority must serve a final notice on the landlord or agent if it decides to continue with enforcement action.
The final notice must set out the:
date on which it is served
amount of the civil penalty
amount to be repaid to the relevant person
reasons for imposing it
details of how and when the penalty must be paid
information about rights of appeal
consequences of failing to comply with the notice
The final notice must require payment of any civil penalty within 28 days, or repayment of a prohibited payment or holding deposit within 7 to14 days from the date of service.
Landlord or agent appeals
A landlord or agent can appeal to the First-tier Tribunal against a final notice.
An appeal can be made against the decision to impose a civil penalty or the amount of the penalty.
If appealing against a financial penalty, the appeal must be brought within 28 days from the day after the date of service of the final notice. If appealing against an order to repay a prohibited payment or holding deposit, the appeal must be brought within the repayment period specified in the notice.
Last updated: 4 January 2022
s.3 Tenant Fees Act 2019.
Sch.1 Tenant Fees Act 2019.
ss.9,10 and 28 Tenant Fees Act 2019.
s.28 Tenant Fees Act 2019; para.8, Sch.1, Housing Act 1988; Ch.3, Tenant Fees Act 2019: statutory guidance for enforcement authorities, MHCLG, April 2019.
s.30 Tenant Fees Act 2019.
s.4 Tenant Fees Act 2019.
ss.1 and 2 Tenant Fees Act 2019.
p.30, Guidance for landlords and agents, MHCLG, April 2019.
Ch.3, Tenant Fees Act 2019: statutory guidance for enforcement authorities, MHCLG, April 2019.
s.1(10) Tenant Fees Act 2019; para. 2.5, Tenant Fees Act 2019: statutory guidance for enforcement authorities, MHCLG, April 2019; p. 9, Tenant. Fees Act 2019: Guidance for landlords and agents, MHCLG, April 2019.
s.17 Tenant Fees Act 2019.
Assured Tenancies and Agricultural Occupancies (Forms) (England) (Amendment) Regulations 2019 SI 2019/915.
ss.15 and 16 Tenant Fees Act 2019; rule 5, Tribunal Procedure (Amendment) Rules 2019 SI 2019/925.
ss.6 to 8 Tenant Fees Act 2019.
ss.8(2) and (3) Tenant Fees Act 2019.
s.12 Tenant Fees Act 2019.
s.8(4) Tenant Fees Act 2019.
s.12(4) Tenant Fees Act 2019.
s.8(5) Tenant Fees Act 2019.
s.10 Tenant Fees Act 2019.
para 2, Sch.3 Tenant Fees Act 2019.
para 3, Sch.3 Tenant Fees Act 2019.
para 4, Sch.3 Tenant Fees Act 2019.
para 6, Sch.3Tenant Fees Act 2019.
s.6(4) Tenant Fees Act 2019.