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'Tenant Fees Act' Impact on Landlords in London

Coming back to the subject of the 'Tenant Fees Act' coming into force on 1st June 2019. I wanted to share with you some key points when it comes to holding/security deposits.

Key points:

Holding Deposit:

  • Cap holding deposits at no more than one week’s rent, applying to a maximum of one property only
  • You can only retain a tenant's holding deposit if they provide false or misleading information

The mistake I see seller makes when choosing an agent is using the criteria of price of the property and fees the agent will charge and the truth is is none of these are going to make any difference on the price you are ultimately going to achieve on your house.

Security Deposit:

  • Security deposits will be capped at five weeks rent
  • Default fees will be limited to charges for replacement keys or a respective security device, and late rent payments only

What are the alternatives to holding deposits?

Deposit free renting allows tenants buy an insurance policy for the equivalent of one week in rent, which can then protect the landlord for up to six weeks worth of rent. The tenant will still remain liable for financial loss or damage due to the landlord.

The most common question we get is that landlords think the quality of the tenant will change if they opt for this, but this is not the case. They still need to pass the same criteria as they would have done so if they paid a deposit.