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Lettings February 14, 2019

Tenant Fees Ban Is Coming – Landlords Get Ready

There are many regulations have to adhere to, and there have been many updates, changes and even new regulations to consider of late. Any landlord who hoped that 2019 would be a quiet year when it comes to regulatory issues should note that on the 1st of June 2019, there is going to be a sizable change to the way they do business.

Changes will have to be made to landlord working practices

This is the date when the Tenant Fees Ban comes into effect and landlords all across the country, not just Ilford will have to adhere to the new rules. If you require any assistance or guidance in adhering to these rules, please get in touch and we will be happy to help.

Some of the key issues for landlords to consider the tenant fees ban include:

·        Not being able to charge for a range of services, including reference checks and inventory checks

·        At the tenant’s point of entry, only being able to charge for the deposit and the rent

·        Security deposits being capped

·        Landlords will still be able to charge fees for issues like lost keys or late rent payments

With respect to the capping of security deposits, this may impact on the way a landlord operates. This money should be placed into a Government approved deposit scheme, but landlords also must be aware of the new caps.

When the annual rent for the property is less than £50,000, the security deposit cap will be five weeks’ worth of rent and when the annual rent for the property is more than £50,000; the security deposit cap will be six weeks’ worth of rent.

Some landlords will have to absorb these costs

Given that security checks and reference checks are still vitally important for landlords, this is work that still has to be carried out. However, a landlord will have to absorb these costs themselves, and this may cause issues for some landlords. There will be some landlords looking to move these costs on to tenants in another manner but considering the competitive nature of the rental market, this may work against the landlord.

Therefore, there is a need for landlords to consider their budget and work out how they are going to manage this change in operations. This scheme has been in place in Scotland for a number of years, and there have been positive and negative elements of it. Yes, Scottish landlords have had to absorb costs but many have reported they now have a stronger working relationship with their tenants.

This could mean some tenants stay in place for longer, it could lower running costs for landlords over the course of a tenancy, and it may improve a landlord’s reputation. This last outcome would be positive if it helps the landlord attract new tenants at a later date. There are positive aspects to be found with this new set-up but it is vital that landlords are aware of the financial implications of the new set-up.

If you are a landlord in or around Ilford and you are looking for guidance and support in this matter, please get in touch. At Hansons Estates, we look to provide you with as much support and guidance as we can, no matter the issue.

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