Latest on the tenant fee ban

The tenant fee ban is likely to come into force either April or October 2019 and is best thought of as total. There are small exceptions but it’s not worth bothering yourself with them in our opinion, and so you should start planning to replace lost income now.

The government seems determined to make the punishments almost comically draconian, and they have not relented, despite industry lobbying. The fine is £5000 for the first offence, then £30,000 for every offence thereafter – enough to bankrupt many people (or even businesses). But that’s not the worst of it – if you charge your tenant a single fee that consists of multiple elements (say, for example, £300 which includes a referencing fee, an inventory fee and an admin fee), that will be deemed as 3 offences, so the fine will be £65,000.

Also the maximum deposit which was previously capped at 6 weeks' rent, is now 5 weeks'.

Our advice is not to try to think up schemes with the goal of circumventing the ban, but instead to look at other ways to make back at least some of the money you previously made from fees. The obvious ones being increasing the rent and reducing costs.

If you’re going to increase the rent it must be done equally across the whole tenancy. You cannot simply increase the rent in month one by a couple of hundred quid or it will be seen as a fee and you will be fined as described above.

Regarding your costs, how well controlled are they, and can you lower them? If you wish we can have a detailed telephone call with you to look at your current situation and see if we can improve it. There is no charge for this for Visum clients and we have a very savvy, switched on guy you can talk to who will look at every angle to save you money. If you want this service then forward this email to Mark Baldwin on m@visum.co.uk and he will arrange things.

If you’re going to take only one point away with you after this it should be ‘don’t charge a fee’. You will likely not get away with it because the incentive is on the tenant to complain (for obvious reasons) and government seems to be itching to make examples out of landlords. Don’t let one of them be you.

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