Landlord Legislative Update May 2019 Residential Landlord Update for joomag | Page 9

of a television licence is a Permitted Payment if the tenancy
agreement requires the payment to be made.
CO M M U N I C AT I O N S E R V I C E S
Landlords and letting agents are permitted to charge a payment
for or in connection with providing a communication service
if the tenancy agreement requires the payment to be made. In
the Tenant Fees Act, communication service, means enabling
any of the following to be used: a telephone other than a mobile
telephone; the internet; cable television, satellite television.
GREEN DEAL
A payment towards Energy Efficiency improvement under a Green
Deal charge (as set out in Section 1 of the Energy Act 2011) or
any subsequent energy efficiency scheme is a Permitted Payment
if the tenancy agreement requires the payment to be made.
Prospective tenants must also be made aware of any obligation
to pay a Green Deal charge (or any subsequent energy efficiency
scheme), so they can make an informed decision.
TRANSITION PERIOD
For existing tenancies (those signed before 1 June 2019) there
is a transitionary 12-month period ending 31 May 2020. During
this time, agents can continue to charge fees written into existing
tenancy agreements.
Under the rules if an existing tenancy drops onto a Statutory
Periodic or Contractual Periodic this is classed as an extension of
the existing tenancy agreement.
If an existing tenancy is renewed this is classed as a new tenancy
agreement and under the ban agents will not be able to charge
fees.
After 12 months (31 May 2020) from when the Tenant Fees
Act comes into force all Prohibited Payments will be unlawful
regardless of when the tenancy started.
HOLDING DEPOSITS
A landlord or agent can take a Holding Deposit from a tenant to
reserve a property whilst reference checks and preparation for a
tenancy agreement are undertaken. Landlords and agents cannot
ask a tenant for more than one week’s rent as a Holding Deposit.
A Holding Deposit can be held for up to 15 calendar days which
is known as the Deadline for Agreement. From taking the Holding
Deposit, the tenancy agreement must be entered into (signed by
both parties and dated) before the Deadline for Agreement. The
landlord and letting agent can agree with the tenant in writing
that a different day (for example an extension) is to be the
Deadline for Agreement.
CIRCUMSTANCES WHEN THE HOLDING DEPOSIT MUST BE
REPAID
The landlord or letting agent who received the Holding Deposit
must repay it if:
• The landlord and tenant enter into a tenancy agreement.
• The landlord decides before the deadline for agreement not to
enter into a tenancy agreement.
• The landlord and the tenant fail to enter into a tenancy
agreement before the Deadline for Agreement.
If one of the above applies, the Holding Deposit must be refunded
within seven calendar days of the date of that decision or the
Deadline for Agreement.
Holding Deposits must be repaid if the landlord or agent does
not give the person who paid the deposit written notice (within
7 calendar days) explaining why they intend not to repay it. With
a tenant’s written consent landlords and letting agents may
‘repay’ the Holding Deposit by allowing the tenant to deduct the
equivalent sum from the first payment of rent or the Tenancy
Deposit. If the Holding Deposit is applied to the Tenancy Deposit,
under the deposit protection requirements, that money is classed
as received on the date the tenancy agreement was signed.
Circumstances when the Holding Deposit may be Retained
The landlord or letting agent who received the Holding Deposit
can keep it if:
• The tenant fails a Right to Rent check regardless of when the
deposit was accepted.
• The tenant provides false or misleading information to the
landlord or letting agent, which the landlord is reasonably entitled
to consider in deciding whether to grant the tenancy because
this materially affects their suitability to rent the property.
• The tenant notifies the landlord or letting agent before the
deadline for agreement that they have decided not to enter into
a tenancy agreement.
• The tenant fails to take all reasonable steps to enter into a
tenancy agreement.
False or misleading information is information provided by the
tenant that is not factually correct and seriously affected the
landlord’s decision to let the property. Merely failing referencing
would NOT be classed as providing false or misleading
information. For example, letting agents must be able to evidence
LANDLORD LEGISLATIVE UPDATE 2019 • 7