09 May 2019

New Tenancy Regulations Afoot

James Lloyd Consultant

The Government’s bid to create what it says will be a ‘fairer and more affordable’ property rental marketplace takes effect from June 1, when the new Tenant’s Fees Act comes into force.

This development is one that landowners should be aware of as they will have farm workers or tenants living in their properties who are on Assured Shorthold Tenancy agreements, (ASTs).

Within the agricultural sector, great care does need to be taken with cottages let to agricultural employees to ensure it is obvious whether they have an AST or ‘assured agricultural occupancy’. The difference is very important for the rights of the tenant.

ASTs are in fact the most common form of general tenancy in England and Wales, due in part to the level of flexibility they offer the landlord. However, it is worth noting that the present assurances that tenants cannot stay for long periods is now under review by Government, which blames a considerable amount of homelessness on the short notice that landlords can currently give.

In the meantime, though this new Act brings various changes to the way in which ASTs are delivered by landlords, which include:

  • Deposits cannot exceed five weeks’ rent (or six weeks if the rent is more than £50k). Note a landlord is not able to skew the initial rent to obtain more;

  • Other payments to landlords will be restricted generally to the following:

- loss of keys;

- late payment of rent charges;

- the variation, assignment or novation of tenancies;

- early termination by the tenant;

- council tax, utilities, TV licences and communication services.

Landlords should not try and charge other items as penalties for breaching these new regulations are quite severe. They include:

  • A fine of up to £5,000 on the first offence with a possible ‘banning order’ after any second offence within five years;

  • A local authority/TSA fine of up to £30,000;

  • A tenant not being bound by provisions and able to recover incorrectly paid money;

  • No short notice to terminate until the issue is corrected.

With or without this new legislation, there is an increasing amount of change on the horizon for landlords, and there should be no compromise when it comes to ensuring that up-to-date and properly drafted tenancy agreements are always in place.

For further information, please contact James Lloyd on 01482 398398, email james.lloyd@wilkinchapman.co.uk or visit wilkinchapman.co.uk

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