The Government’s Tenant Fees Bill fails to live up to the hype

Roy Kennedy on yet another government housing bill that fails to live up to the hype


The Tenant Fees Bill, which started its Lords committee stage on Tuesday, is yet another example of government legislation that has been hyped up as delivering for tenants in the private rented sector.

Its aims – so we are told – are to stop unfair fees being charged by landlords and letting agents, increase fairness and re-balance the market. On closer examination however, it does not quite cut the mustard.

Despite a previous government announcement that unfair fees would be banned in 2015, it has taken the period since to get the Bill as drafted. Most of the provisions won’t come into effect until the Communities Secretary brings forward regulations and then there’s a year’s grace on unfair fees. This means that it will be 2020 at the earliest before tenants can expect much change to their present situation.

Throughout the Bill’s time in the Lords, Labour peers will seek to illustrate its weaknesses try to persuade Ministers with amendments that will really protect tenants from being exploited.

We will focus for example, on the decision to cap rent deposits at six weeks – up from four weeks, as originally announced by the government in 2015. Four weeks is sufficient for a deposit – a position also supported by Citizens Advice and the Mayor of London.  There should also be scope for passporting to enable a tenants to transfer their deposit to another landlord. While clearly convenient for all parties, this has not been encouraged as much as it could have been.

Alongside this, holding deposits should only be three days rent rather than the one week, as proposed in the Bill. Labour wants the government to explore what action could prevent multiple holding deposits being taken, as well as full transparency if a landlord proposes to keep the deposit and not return it to the prospective tenant. All of this is open to abuse and clear reasons must be provided where deposits are being withheld.

Where default fees follow a tenant’s action or inaction, we want to stop rogue landlords or letting agents from merely seeking to recover fees they have lost elsewhere once the Bill becomes law. The current wording ‘reasonably incurred’ is not sufficiently robust enough to prevent such abuse.

Labour also thinks there is a serious omission preventing tenants from recovering any compensation when a prohibited fee is charged. In other industries and services, if one party is entrusted with someone else’s money and then breaches laws, rules and regulation, the payment of compensation to the aggrieved party is commonplace.

We hope to persuade Ministers on all of these issues, in order to make this legislation fit for purpose. It is time for the government to honour its 2015 pledge and give much needed additional protections to the millions of our fellow citizens renting in the private sector.

This article originally appeared on the Labour Lords blog