The Tenants Fees Act came into force on the 1st of June 2019 and dramatically reformed the cost of renting for Tenants, both at the start and during the Tenancy.
No upfront fees for Tenants
When you have had an offer accepted on a property the only funds that can be requested from you are:
- a refundable holding deposit to reserve the property, capped at one week’s rent, payable when your offer is accepted.
- the first months’ rent, payable on signing the tenancy agreement.
- a Tenancy Deposit, capped at five weeks’ rent, payable on signing the Tenancy Agreement. Often called a Security Deposit, this must be protected in accordance with Statutory requirements.
How much do you need to pay upfront?
Here is an example of what you might need to pay at the start of your Tenancy.
If the rent is £1500 pcm
To secure the property while the pre-tenancy administration and checks are carried out:
Fees: £0
Holding Deposit of one week’s rent £346.15
To be received in cleared funds before the start of your Tenancy:
First month’s rent: £1,500.00
Tenancy Deposit of five weeks’ rent £1,730.76
Subtotal £3,230.76
Less the Holding Deposit: – £346.15
Total to pay £2,884.61
Let’s talk about deposits
Holding Deposit
A Holding Deposit is different from a Tenancy Deposit (sometimes referred to as a Security Deposit). A Holding Deposit is paid to reserve a rental property whilst references and other formalities are carried out. Once you have signed your Tenancy Agreement your holding deposit will be used towards the first months’ rent and your Tenancy Deposit.
Your Holding Deposit won’t be refunded if you fail the referencing process, fail to meet the right to rent immigration checks, provide false or misleading information, fail to enter into the Tenancy Agreement by the deadline or withdraw your application.
Tenancy Deposit
A Tenancy Deposit is paid to give your landlord protection in case you leave without paying the rent or cause damage to the property or its contents.
The Tenancy Deposit must be protected in one of the government approved tenancy deposit schemes. With Hestia Lettings and Management, your deposit will be protected by the Tenancy Deposit Scheme and held by them in their custodial scheme.
Deposit Alternatives
At Hestia Lettings and Management, we have partnered with Reposit, a deposit replacement scheme, to provide an alternative to the traditional Tenancy Deposit.
Instead of having to find the five-week Tenancy Deposit before moving in, you simply pay an initial one-off cost equal to one week’s rent. Based on a £1,500.00 pcm rental, this would be £346.15 instead of £1,730.76. There is then an annual renewal fee of £80.
This means you don’t need to raise a deposit for your new property before you get your previous deposit back. While the cost is a lot less with Reposit, the charge is non-refundable, so you won’t get any of it back when you leave.
Not all landlords accept this scheme yet, so please contact us to find out which of our properties are available with this option.
For more information on how the Reposit scheme works and if it may be suitable for you, please click here.
Fees During your Tenancy
The fees you might have to pay during the Tenancy will be:
- the cost of replacing a key(s) if you lose them or require replacements
- if you are more than 14 days late with your rent
- if you want to change your Tenancy or bring it to an end early.
- Any losses or costs incurred by the Landlord as a result of your actions.
