On 10th October 2018, the Tenants Fees Bill underwent its second reading in the House of Lords, bringing it another step closer to becoming law. Next, the bill will go to Committee Stage on 5th November, where the Lords will consider the propositions line by line before the Report Stage.
The bill proposes a dramatic change to the current rules governing letting fees, including creating a cap on security deposits, with harsher penalties for those in breach of the new regulations.
How Will It Work?
The bill proposes capping the amount of security deposit a landlord can take to six weeks’ rent and the holding deposit to secure a property to one week’s rent, in addition to banning letting agents from charging tenants fees.
Anyone found in breach would face a fine of up to £5,000. Any further breach within five years would be classified as a criminal offence, incurring unlimited fines or banning orders.
Although this might sound good to prospective tenants, some have questioned whether the proposals could cause an unwanted rise in rental prices, meaning that tenants pay more in the long run. The Residential Landlords Association suggests that rather than changing the law, “ministers could achieve a greater and earlier impact by using the powers they already have to improve the transparency of fees charged by agents.”
What Does It Mean For Me?
Either way, the bill has made it more than halfway through parliament and has a lot of support across various parties. With only the committee stage, report stage and third reading in the House of Lords before the bill becomes law, agencies specialising in property management Cheltenham and other areas will need to keep a keen eye on the bill to ensure they do not fall in breach of any new legislation.
By using a respected letting agency such as https://www.completepropertygroup.co.uk/, you can be confident that your rights as a tenant or landlord are clearly explained and you are able to stay on top of any changing legislation to avoid fines or being taken advantage of.
Reputable letting agents will also collect security deposits, ensuring they are held within legally recognised deposit protection schemes, and manage the entire lease of the property so you can rest easy knowing your interests are being protected.