The Act, part of a wider package of measures aimed at rebalancing the relationship between landlords and tenants to deliver a fairer, more affordable and good quality private rented sector, introduces protections from unfair letting fees and charges, and excessive deposits by landlords and letting agents. The protections will apply to most residential tenants in the private rented sector in England and will apply both at the start and throughout a tenancy.
Who is protected by the Act?
The Act protects most of the following types of residential tenancies and licences in England:
(“a protected occupancy agreement”).
The Act does not apply to:
What does the Act do?
The Act provides that a landlord or letting agent must not require a person protected by the Act (a “person”) to do any of the following actions in connection with a protected occupancy agreement:
(a “prohibited action”).
A landlord or letting agent will have required a person to do a prohibited action “in connection with” the protected occupancy agreement in the following situations:
Which payments are permitted by the Act?
The Act prohibits all payments “in connection with” a protected occupancy agreement except for payments that are expressly permitted.
In broad terms, the following are permitted payments (subject to certain conditions and caps):
What additional changes has the Act introduced?
The Act provides that section 21 notices cannot be given in relation to an AST if the landlord is in breach of the prohibitions and contains detailed obligations regarding the repayment of holding deposits. It also makes minor amendments to the:
What penalties can be imposed under the new Act?
Landlords or letting agents who breach the requirements of the Act can:
Important dates under the Act
The Act will apply to all new protected occupancy agreements from 1 June 2019 except for statutory periodic tenancies arising after 1 June 2019 at the end of a fixed-term tenancy that commenced before 1 June 2019.
From 1 June 2020, the Act will apply to pre-existing protected occupancy agreements entered into before 1 June 2019.
Comment
From 1 June, landlords should ensure compliance with the Act to avoid enforcement penalties and to ensure they can terminate tenancies when needed.
Landlord and agents operating in the private rented sector in England should by now have carried out reviews of their stock and policies and procedures, to check which payments currently being charged will become prohibited under the Act and to ensure that occupancy agreements are amended to exclude prohibited and include any applicable permitted payments.
Registered provider (RP) clients should note that whilst the Act will not apply to the provision of social housing occupancy agreements, the Act will still apply in relation to any market rent occupancy arrangements.
Equally, the Act will apply to non-RP clients granting occupancies at a “social rent”.
Please contact Penny Bournes.
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