Following on from my video last week, I wanted to give you all a bit of a reminder of what the Tenant Fee Ban Extension means to you.
As you may remember, last year the Tenant Fee Ban came into place. It was a rubbish situation for Letting Agents and Landlords as it means that we can no longer charge tenants for anything. Things like referencing applications, administration, inventories, check in and check outs that are a service that are offered to provide security and support for both the tenant and landlord is no longer a shared cost.
Why are these things charged? Simple: they take time.
Letting Agents are now charging that cost to the Landlords, and Landlords, if you’re doing I yourself then you’re now effectively doing that free of charge.
It takes a good few hours to do all of the referencing, process the applications, all those things that are provided require time and effort and now, who’s paying for that? The rents went up to cover these costs. So in my opinion, increasing the rents instead of having a fee in place (that let’s face it – tenants were fully prepared for) means that in the long term, the tenants are the ones that are losing out.
But it’s done, it’s happened and now they have changed it AGAIN. As of June, this month, any existing tenants with pending services can technically get their fee back.
So if a tenant paid a check out fee at the start of their tenancy that was before June 2020, they could now be entitled to get that fee back. Mr and Mrs Landlord you are now at risk.
This means that now, there is very minimal risk to a tenant if they decide not to pay their rent or to pay it late because Landlords and Letting Agents can no longer charge them late fees. Yes, you can charge in line with the Bank of England base rate but it’s minimal. And would it match up to late mortgage fees or bank charges? Probably not.