The impact of the Tenant Fees Ban to the rental market in England and Wales cannot be ignored. But while everybody knows what it prohibits (fees for supplementary services to tenants) how many of us are aware of exactly what the ramifications for falling foul of it are?
Here are some of the key things to keep in mind when it comes to setting penalties for breaches of the Tenant Fees Act 2019.
There are two categories of breachesBreaches of the Tenant Fees Act 2019 fall into two distinct categories and penalties are levied accordingly. They are differentiated below:
The first category, which covers the charging of all unlawful fees, carries a fine of up to £5,000 per breach for each offence (even if all instances relate to the same tenancy). In cases with multiple breaches (within a five year period), authorities can issue a penalty of up to £30,000 or pursue a criminal conviction and an unlimited fine. Under Section 14 of the Housing and Planning Act of 2016, landlords or agents charged with this category of offence can also be issued with a banning order, placing them on the government’s register of rogue landlords and property agents.
The second category concerns landlords or agents who retain a tenant’s deposit unlawfully (tenancy deposits must be held in one of three government-approved tenancy deposit schemes and returned within 30 days of the conclusion of the tenancy). These agents can be subject to a fine of up to £5,000 per breach but the offence is not categorized as a banning order offence and no criminal charges can be pursued.
You stand to lose past rent payments (plus interest)Under Section 10 of the Act landlords or agents charged with either offence can be ordered to pay back any money they might have legally taken off the tenant, with interest in some cases. Furthermore, the tenant cannot be evicted from the property while either fine or repayment is outstanding.
Mitigating factors?Authorities will take mitigating circumstances into account when trying to determine whether to pursue a financial penalty or a criminal charge. Factors like full cooperation with the investigation, prompt repayment of any monies owed and a blemish-free record are all taken into account, as is whether any third parties (such as agency staff) will be affected by the financial penalty issued.
Conversely, aggravating factors will ALSO be taken into effect so landlords with a previous record or those who are obstructive to the investigation may find themselves facing the full weight of the law.
Your reputation at stakeWhile enforcement authorities have discretion over their cases, they are being encouraged to publicise convictions particularly in cases of repeated breaches of the Act. Making names and details public is designed to serve in the interest of the public and to act as a deterrent for other rogue agents and landlords.
Don't miss the deadline for appealsAgents and landlords are able to appeal. Financial penalties have to be appealed within 28 days of the final notice being served. Requests for repayment can be appealed within 7 - 14 days of the final notice. Agents and landlords are also able to appeal against banning orders and criminal convictions by following the correct process.
This is just a glimpse into a complicated legal matter. As with most things legal, compliance is the best way to prevent penalties. Download our Tenant Fees Ban ebook for free and find out how you can comply with the Tenant Fees Act 2019.