Does the New Tenant Fee Ban Law Affect the Eviction of Tenants?

Does the New Tenant Fee Ban Law Affect the Eviction of Tenants?

The Tenant Fees Act, which has been in force in England since 1st June 2019, puts a price cap on rental deposits, and bans the majority of letting fees related to referencing and administration.

Here, we take a look at this act in more detail, and investigate the effect it will have on the right of landlords to evict tenants.

Overview

The Tenant Fees Act (2019) prevents landlords from charging tenants for deposits beyond  a set maximum and associated rental costs. This protects tenants from both unexpected and unfair letting fees, making the whole rental process clearer to all parties.

Since 1st June 2019, the only fees tenants can lawfully be charged are:

● Agreed rent

● Holding deposit, fully refundable, which can be no more than a week's rent

● Capped tenancy deposit of a maximum of 6 weeks’ rent dependant on total annual rent

● Late payment of rent / key replacement fee if included within the tenancy agreement

● payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher

● Fees related to tenancy termination (if initiated by the tenant)

● Payments of Council Tax, utility bills, TV licence and internet/phone service

These changes mean greater protection for tenants and fewer up front payments, making it easier cost-wise to rent property. Landlords and letting agents who are not in compliance with these new rules could face charges of up to £5,000.

What is an Eviction?

Eviction means that a tenant is removed from a rental property by the landlord, and can occur for a number of reasons. Landlords must be sure that they are following correct procedures in order to evict a tenant lawfully.

What are the Current Regulations on Eviction?

Most tenant eviction notices in the private rental market are made under Section 8 and Section 21 of The Housing Act (1988). Section 8 is aimed at tenants who are in breach of their tenancy agreement, while Section 21 is used either at the end of a fixed term tenancy, or in the course of a tenancy with no fixed end date.

Section 21 does not require the landlord to give a reason for the tenant eviction, whereas Section 8 eviction notices must cite a reason, such as rent arrears. Under Section 8 the landlord must then prove the reason cited on the notice in court. In some cases the court must order eviction if the landlord proves the reason cited in others it has discretion.

Eviction under Both Section 21 and Section 8 of The Housing Act (1988) will still be in force alongside the new Tenant Fees Act.

How Does the New Law Affect This?

The Tenant Fees Act only protects tenants from eviction in certain circumstances. The Act will prevent the landlord from serving a valid Section 21 notice until the landlord has refunded the tenant with any fees or deposits unlawfully taken from the tenant. This means any fees that are prohibited by the Tenant Fees Act.

As outlined here on the government website, Section 21 notices will not be valid  if a landlord has made charges at any point during the tenancy that do not comply with the Tenants Fee Act and has failed to repay them. Upon repayment, the eviction notice may be served.

Future Legislation

While the Tenant Fees Act can prevent eviction in the case of non-refunded unlawful payments, landlords can still evict tenants otherwise without having to provide a reason. However, the government has recently announced plans to abolish Section 21, by process of scrapping Assured Shorthold Tenancies. This will prevent landlords from evicting tenants without giving a legitimate reason (known as 'no-fault' evictions).

If you are concerned that the new rules have been breached and need advice then please contact the Helix Law team for further guidance.