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Deposits & Fees

Remember that from the 1st of June 2019, the Tenant Fees Act (2019) comes into effect, which bans most fees and puts limitations on deposits.

Banned fees will include

  • Charging for a guarantor form
  • Credit checks
  • Inventories
  • Cleaning services
  • Referencing
  • Professional cleaning
  • Having the property de-flead as a condition of allowing pets in the property
  • Admin charges
  • Requirements to have specific insurance providers
  • Gardening services

Holding deposits, rent, deposits and charges for defaulting on the contract are all exempted from being banned but are subject to additional restrictions

Landlords will not be able to set rent at a higher level for a specific portion of the tenancy and then dropping it down afterwards. This is to prevent landlords or agents trying to offset the ban on fees by artificially increasing the rent for an initial period to make up the costs.

Tenancy/security deposits, are to be limited to five weeks’ rent (for properties where the rent is under £50,000 a year).

Holding deposits will be limited to a maximum of 1 week's rent and must be returned either as a payment bto you, or being put towards the first rental payment, or the security deposit. Landlords will only be able to hold the holding deposit for 15 days unless another ‘deadline’ date is agree in writing with you.

You can lose your holding deposit if you withdraw, don't take all reasonable steps to enter the tenancy, fail a right to rent check or if you provide misleading information which materially affects your suitability to rent the property.

charges for defaulting on the contract are only permitted in two instances - loss of keys and late payment of rent. Both are subject to restrictions. For the loss of keys, you can be charged the reasonable cost if the landlord is unable to provide evidence in writing with receipts it could be considered a prohibited payment. For late payment of rent, you could be charged 3% above the Bank of England base rate in interest on the late payment of rent from the date the payment is missed. You can't be charged by the landlord or agent for sending reminder letters.

If you breach your tenancy agreement and caused damage as a result, landlords may still seek compensation via deductions to your deposit or court action against you.

You pay a tenancy deposit to a landlord which is used in the case of;

  • Rent arrears
  • Damages
  • Unpaid utilities

It is different to a fee (which is not refundable). Common fees including;

  • Booking/Holding fee
    • used to ensure you are serious about renting; normally this will be deducted from your rent when you first move in. If you pull out before moving in you may lose the fee. If you are rejected you might get the fee back. Always ask for details if you have been asked for a booking/holding fee
  • Referencing fee
    • used to run credit checks to make sure you can afford to rent the property. In many cases this will be included in the cost of admin fees so you will normally only see referencing fee’s with organisations that do not charge admin fees
  • Admin fee
    • used by the letting agent or landlord to run credit checks on you and/or any guarantors, as well as covering costs involved in draft legal contracts, sending out letters to tenants etc.

You can’t be charged fees to;

  • view a property,
  • see their list of properties, or
  • register your interest

Remember that from the 1st of June 2019, the Tenant Fees Act (2019) comes into effect, which bans most fees and puts limitations on deposits.

Banned fees will include

  • Charging for a guarantor form
  • Credit checks
  • Inventories
  • Cleaning services
  • Referencing
  • Professional cleaning
  • Having the property de-flead as a condition of allowing pets in the property
  • Admin charges
  • Requirements to have specific insurance providers
  • Gardening services

Holding deposits, rent, deposits and charges for defaulting on the contract are all exempted from being banned but are subject to additional restrictions

Landlords will not be able to set rent at a higher level for a specific portion of the tenancy and then dropping it down afterwards. This is to prevent landlords or agents trying to offset the ban on fees by artificially increasing the rent for an initial period to make up the costs.

Tenancy/security deposits, are to be limited to five weeks’ rent (for properties where the rent is under £50,000 a year).

Holding deposits will be limited to a maximum of 1 week's rent and must be returned either as a payment bto you, or being put towards the first rental payment, or the security deposit. Landlords will only be able to hold the holding deposit for 15 days unless another ‘deadline’ date is agree in writing with you.

You can lose your holding deposit if you withdraw, don't take all reasonable steps to enter the tenancy, fail a right to rent check or if you provide misleading information which materially affects your suitability to rent the property.

charges for defaulting on the contract are only permitted in two instances - loss of keys and late payment of rent. Both are subject to restrictions. For the loss of keys, you can be charged the reasonable cost if the landlord is unable to provide evidence in writing with receipts it could be considered a prohibited payment. For late payment of rent, you could be charged 3% above the Bank of England base rate in interest on the late payment of rent from the date the payment is missed. You can't be charged by the landlord or agent for sending reminder letters.

If you breach your tenancy agreement and caused damage as a result, landlords may still seek compensation via deductions to your deposit or court action against you.

There is currently not a set or maximum amount which landlords or their agents have to charge. From the 1st of June 2019 upfront fees will be banned. The only fees you can be charged for will be during tenancy and in relation to lost keys of late payment of rent. 

Deposits typically tend to be about 1 month’s equivalent of rent but can go as high as 6 weeks.From the 1st of June 2019 this will be limited to 5 week's rent. 

Fee’s vary a lot, some online companies can charge as little as £20 for referencing fees with no admin fees but it is more common to find companies charging anywhere between £100-300.

Always check a wide range of agents to see how much they charge before deciding if you are prepared to pay the fees on the property you are interested in.

Remember that from the 1st of June 2019, the Tenant Fees Act (2019) comes into effect, which bans most fees and puts limitations on deposits.

Banned fees will include

  • Charging for a guarantor form
  • Credit checks
  • Inventories
  • Cleaning services
  • Referencing
  • Professional cleaning
  • Having the property de-flead as a condition of allowing pets in the property
  • Admin charges
  • Requirements to have specific insurance providers
  • Gardening services

Holding deposits, rent, deposits and charges for defaulting on the contract are all exempted from being banned but are subject to additional restrictions

Landlords will not be able to set rent at a higher level for a specific portion of the tenancy and then dropping it down afterwards. This is to prevent landlords or agents trying to offset the ban on fees by artificially increasing the rent for an initial period to make up the costs.

Tenancy/security deposits, are to be limited to five weeks’ rent (for properties where the rent is under £50,000 a year).

Holding deposits will be limited to a maximum of 1 week's rent and must be returned either as a payment bto you, or being put towards the first rental payment, or the security deposit. Landlords will only be able to hold the holding deposit for 15 days unless another ‘deadline’ date is agree in writing with you.

You can lose your holding deposit if you withdraw, don't take all reasonable steps to enter the tenancy, fail a right to rent check or if you provide misleading information which materially affects your suitability to rent the property.

charges for defaulting on the contract are only permitted in two instances - loss of keys and late payment of rent. Both are subject to restrictions. For the loss of keys, you can be charged the reasonable cost if the landlord is unable to provide evidence in writing with receipts it could be considered a prohibited payment. For late payment of rent, you could be charged 3% above the Bank of England base rate in interest on the late payment of rent from the date the payment is missed. You can't be charged by the landlord or agent for sending reminder letters.

If you breach your tenancy agreement and caused damage as a result, landlords may still seek compensation via deductions to your deposit or court action against you.

Remember that if you have signed a contract with joint liability, all tenants may be liable for deductions in some cases, especially where damages have occurred in communal areas and there is no admission of liability from the individual(s) who caused the damage.

Joint contracts normally make everyone who signs the contract responsible for the whole rent on the house if a housemate owes rent at the end of a tenancy, their deposit might not be enough to cover the arrears. In this situation, landlords could make deductions from deposits paid by other joint tenants. When this happens, it is possible for the joint tenants to take legal action against the person who has caused the problem.

If you have an assured shorthold tenancy your landlord has 30 days from when you pay your deposit to;

  • Protect your tenancy deposit
  • Tell you which scheme they've used
  • Give you certain information about the scheme

If you are unsure if it has been protected you can ask the landlord what scheme they have used or check the 3 tenancy deposit scheme providers websites:

You'll need to supply your postcode, tenancy start date, deposit amount and surname.

We recommend speaking to shelter as well as the students’ union if you are having issues with deposits.

There is helpful information on the shelter website for;

During the tenancy, there are some things you can do to help increase your chances of getting your deposit back at the end of the tenancy.

  • Clean the house thoroughly before you leave,
  • Remove and properly dispose of all rubbish.
  • If you have an inventory or check in report, use this to compare how the property looks now to what it was like when you moved
  • On the day you leave, take dated photographs or a video of every room.
  • Pay your rent on time every time
  • Report any repair issues, you might be held liable if you fail to report something which later becomes a massive issue. Take photos of issues and keep records of emails raising concerns.
  • Avoid or consider carefully contracts where there is joint liability- if your housemate breaks something you could be liable-particularly if this is in a communal area and they deny causing the problem.

A guarantor takes on all the legal obligations of the tenant in the contract but essentially gets nothing from it. Most students have no or limited credit history. Guarantors however are likely to have borrowed and repaid or have a mortgage and therefore would be considered to be more financially secure / economically active. This is why some agencies and landlords require guarantors.

Your guarantor must sign to say that they would cover the cost of the rent if you default on your payments. This must be in signed writing. Credit checks on your guarantor will usually take place. If your guarantors are overseas credit checks can be difficult.

If you are signing a joint tenancy you have joint liability for the entire property. Therefore your guarantor is taking on the risk of owing the total rent for while property. If each tenant’s rent is £400 a month, that £4,000 for a 10 month of the contract per person, if you are in a five bedroom house that is a total liability of £20,000.

Page last reviewed: 01/03/2019
Next review due: 31/08/2020