A prominent campaign group of activists has claimed that there have been minimal instances of questionable behaviour by agents and landlords in the four years since the implementation of the Tenant Fees Ban. Introduced on June 1, 2019, in England, the ban prohibits agents from charging tenants fees for initiating, renewing, or terminating a tenancy, shifting the burden of such fees onto landlords.
Generation Rent, the activist group, argues that these fees used to impose an average cost of £400 on tenants, with some agents charging as much as £800. Under the current regulations, letting agents are only permitted to charge rent, refundable holding and security deposits, or specific fees related to tenant actions such as early termination of the tenancy.
In a statement released by the group, they said, “Assessing the effectiveness of the law precisely is challenging, but we have received few reports of dubious conduct. The most common issue pertains to landlords and letting agents refusing to refund holding deposits when a tenancy application falls through. In such cases, tenants are typically entitled to a refund and can apply to the first-tier tribunal to reclaim their money.”
Generation Rent has compiled a list of potential issues that their supporters might encounter based on previous disputes that have reached tribunals. They have also outlined strategies to tackle these problems.
The group stated, “As a general rule, if you have taken all reasonable steps to enter into a tenancy agreement but it doesn’t proceed, you should still be entitled to a refund of your holding deposit. A couple of cases involved the collapse of tenancy applications due to extended delays in guarantor vetting or technical difficulties with the referencing company employed by the letting agent. However, the tenants were still safeguarded.”
“In instances where personal reasons lead to the withdrawal of an application, tenants may still be eligible for a refund if the prospective landlord or agent has failed to adhere to the rules regarding holding deposits. This scenario arose in a few cases where the holding deposit exceeded the maximum limit of one week’s rent.”
The group also highlighted that agents can retain the holding deposit if the tenant provides false or misleading information. They cited a case in Berkshire where tenants claimed an income of £42,000, but the referencing process was unable to verify the entire amount. Fortunately, the tribunal determined that the tenants had indeed provided accurate information, leading to the return of their money. This incident serves as a reminder for tenants to be transparent about their income when applying for tenancies.