Tenant Fees Bill (HC Bill 203)

Tenant Fees BillPage 20

(a) a requirement imposed before the coming into force of that section, or

(b) a requirement imposed by or pursuant to an agreement between a
letting agent and a tenant entered into before the coming into force of
that section.

(8) 5Subsections (9) and (10) apply in relation to a provision of an agreement
between a letting agent and a tenant entered into before the coming into force
of section 2 if, had the agreement been entered into after that time, that section
would have applied in relation to the provision or a requirement imposed
pursuant to it.

(9) 10After the end of the period of one year beginning with the date on which
section 2 comes into force, the provision ceases to be binding on the tenant (but
the agreement continues, so far as practicable, to have effect in every other
respect).

(10) If, after the end of the period of one year beginning with the date on which
15section 2 comes into force—

(a) the letting agent accepts a payment from the tenant pursuant to the
provision, and

(b) does not return the payment before the end of the period of 28 days
beginning with the day on which it is accepted,

20the letting agent is to be treated for the purposes of this Act as having required
the tenant to make a prohibited payment of that amount at that time.

(11) Schedule 2 (treatment of holding deposit) applies only in relation to a holding
deposit paid after the coming into force of that Schedule.

(12) The Secretary of State may by regulations made by statutory instrument make
25such other transitional, transitory or saving provision as the Secretary of State
considers appropriate in connection with the coming into force of any
provision of this Act.

The following are to be paid out of money provided by Parliament—

(a) any expenditure incurred under or by virtue of this Act by the Secretary of
30State, and

(b) any increase attributable to this Act in the sums payable under any other Act
out of money so provided.

30 Crown application

(1) Sections 1 to 11, 15 to 17 and 28, Schedules 1 to 3 and any regulations made
35under section 3 or 9 bind the Crown in respect of a Crown tenancy.

This is subject to subsection (2).

(2) In subsection (3) of section 8 as it applies by virtue of subsection (1), the
reference to a person having committed an offence under section 12 is to be
read as a reference to a person satisfying the conditions in subsection (1)(a) to
40(c) of that section.

(3) In this section—

(a) “Crown tenancy” means a tenancy of housing in England in which the
interest of the landlord is a Crown interest;

Tenant Fees BillPage 21

(b) “Crown interest” means a Crown interest within the meaning of section
44(3) of the Housing Act 1988 which is capable of granting an assured
shorthold tenancy under that Act.

31 Extent

(1) 5This Act extends to England and Wales only, subject to subsection (2).

(2) The following provisions extend to England and Wales, Scotland and Northern
Ireland—

(a) section 6(6);

(b) section 7(4);

(c) 10section 24(10);

(d) section 28(12);

(e) section 29;

(f) this section;

(g) section 32;

(h) 15section 33.

32 Commencement

(1) This Act comes into force on such day as the Secretary of State appoints by
regulations made by statutory instrument, subject to subsection (3).

(2) Regulations under subsection (1) may appoint different days for different
20purposes.

(3) The following provisions come into force on the day on which this Act is
passed—

(a) section 3(2) to (7);

(b) section 9;

(c) 25section 22(4) and (5);

(d) section 26(1);

(e) section 28(12);

(f) section 29;

(g) section 31;

(h) 30this section;

(i) section 33.

33 Short title

This Act may be cited as the Tenant Fees Act 2018.

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SCHEDULES

Section 3

SCHEDULE 1 Permitted payments

Rent

1 (1) 5A payment of rent under a tenancy is a permitted payment.

(2) But, subject as follows, if the amount of rent payable in respect of any
relevant period (“P1”) is more than the amount of rent payable in respect of
any later relevant period (“P2”), the additional amount payable in respect of
P1 is a prohibited payment.

(3) 10Where there is more than one later relevant period in respect of which the
amount of rent payable is lower than the amount of rent payable in respect
of P1—

(a) if different amounts of rent are payable for different later relevant
periods, P2 is the relevant period for which the lowest amount of rent
15is payable;

(b) if the same amount of rent is payable for more than one later relevant
periods, P2 is the first of those periods.

(4) The following provisions apply for the purposes of determining—

(a) whether the amount of rent payable in respect of a relevant period is
20more than the amount of rent payable in respect of a later relevant
period, and

(b) the difference between the amount of rent payable in respect of the
earlier relevant period and that payable in respect of the later
relevant period.

(5) 25Where the later relevant period is a different length of time to the earlier
relevant period, the amount of rent payable in respect of the later period is
to be treated as the proportionate amount of rent that would be payable in
respect of that period if it were the same length of time as the earlier period.

(6) There is to be left out of account any difference between the rent payable in
30respect of the earlier relevant period and the rent payable in respect of the
later relevant period as a result of a variation of the rent payable in respect
of the later period—

(a) pursuant to a term in the tenancy agreement which enables the rent
under the tenancy to be increased or reduced, according to the
35circumstances, or

(b) by agreement between the landlord and the tenant after the tenancy
agreement has been entered into.

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(7) In this paragraph “relevant period”, in relation to a tenancy, means any
period of time in respect of which rent is payable under the tenancy.

(8) But “relevant period” does not include a period of time which begins after
the end of one year beginning with the first day of the tenancy.

5Tenancy deposit

2 (1) A payment of a tenancy deposit is a permitted payment.

(2) In this Act “tenancy deposit” means money intended to be held (by a
landlord or otherwise) as security for—

(a) the performance of any obligations of a tenant, or

(b) 10the discharge of any liability of a tenant,

arising under or in connection with a tenancy.

(3) But if the amount of the tenancy deposit exceeds the amount of six weeks’
rent, the amount of the excess is a prohibited payment.

(4) In this paragraph—

(a) 15“six weeks’ rent” means six times one week’s rent, and

(b) “one week’s rent” means the amount of the annual rent payable in
respect of the tenancy immediately after its grant, renewal or
continuance divided by 52.

Holding deposit

3 (1) 20A payment of a holding deposit is a permitted payment.

(2) In this Act “holding deposit” means money which is paid by or on behalf of
a tenant to a landlord or letting agent before the grant of a tenancy with the
intention that it should be dealt with by the landlord or letting agent in
accordance with Schedule 2 (treatment of holding deposit).

(3) 25But if the amount of the holding deposit exceeds one week’s rent, the
amount of the excess is a prohibited payment.

(4) In this paragraph “one week’s rent” means the amount of the annual rent
payable in respect of the tenancy immediately after its grant, renewal or
continuance divided by 52.

30Payment in the event of a default

4 (1) A payment that a tenant is required to make in the event of a default by the
tenant is a permitted payment if the tenant is required by the tenancy
agreement to make the payment in the event of such a default.

(2) In this paragraph “default” means a failure by the tenant to—

(a) 35perform an obligation, or

(b) discharge a liability,

arising under or in connection with the tenancy.

(3) But if the amount of the payment exceeds the loss suffered by the landlord
as a result of the default, the amount of the excess is a prohibited payment.

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Payment on variation, assignment or novation of a tenancy

5 (1) A payment is a permitted payment if it is a payment that a tenant is required
to make—

(a) to a landlord in consideration of the variation, assignment or
5novation of a tenancy at the tenant’s request, or

(b) to a letting agent in consideration of arranging the variation,
assignment or novation of a tenancy at the tenant’s request.

(2) But if the amount of the payment exceeds the greater of—

(a) £50, or

(b) 10the reasonable costs of the person to whom the payment is to be
made in respect of the variation, assignment or novation of the
tenancy,

the amount of the excess is a prohibited payment.

Payment on termination of a tenancy

6 (1) 15A payment is a permitted payment if it is a payment that a tenant is required
to make to a landlord in consideration of the termination of a tenancy at the
tenant’s request—

(a) in the case of a fixed term tenancy, before the end of the term, or

(b) in the case of a periodic tenancy, without the tenant giving the period
20of notice required under the tenancy agreement or by virtue of any
rule of law.

(2) But if the amount of the payment exceeds the loss suffered by the landlord
as a result of the termination of the tenancy, the amount of the excess is a
prohibited payment.

(3) 25A payment is a permitted payment if it is a payment that a tenant is required
to make to a letting agent in consideration of arranging the termination of a
tenancy at the tenant’s request—

(a) in the case of a fixed term tenancy, before the end of the term, or

(b) in the case of a periodic tenancy, without the tenant giving the period
30of notice required under the tenancy agreement or by virtue of any
rule of law.

(4) But if the amount of the payment exceeds the reasonable costs of the letting
agent in respect of the termination of the tenancy, the amount of the excess
is a prohibited payment.

(5) 35In this paragraph “fixed term tenancy” means any tenancy other than a
periodic tenancy.

Payment in respect of council tax

7 (1) A payment that a tenant is required to make to a billing authority in respect
of council tax is a permitted payment if the tenant is liable to make the
40payment by virtue of any of sections 6, 8 or 9 of the Local Government
Finance Act 1992.

(2) In this paragraph “billing authority” has the same meaning as in Part 1 of the
Local Government Finance Act 1992 (see section 1(2) of that Act).

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Payment in respect of utilities etc

8 (1) A payment that a tenant is required to make for or in connection with the
provision of a utility is a permitted payment if the tenant is required by the
tenancy agreement to make the payment.

(2) 5A payment that a tenant is required to make towards energy efficiency
improvements under a green deal plan (within the meaning of section 1 of
the Energy Act 2011) is a permitted payment if the tenant is required by the
tenancy agreement to make such a payment.

(3) In this Act “utility” means—

(a) 10electricity, gas or other fuel, or

(b) water or sewerage.

Payment in respect of a television licence

9 (1) A payment that a tenant is required to make to the British Broadcasting
Corporation in respect of a television licence is a permitted payment if the
15tenant is required by the tenancy agreement to make the payment.

(2) In this paragraph “television licence” means a licence for the purposes of
section 363 of the Communications Act 2003.

Payment in respect of communication services

10 (1) A payment that a tenant is required to make for or in connection with the
20provision of a communication service is a permitted payment if the tenant is
required by the tenancy agreement to make the payment.

(2) But, in the case of a payment that a tenant is required to make to a landlord,
if the amount of the payment exceeds the reasonable costs incurred by the
landlord for or in connection with the provision of the service, the amount
25of the excess is a prohibited payment.

(3) In this Act “communication service” means a service enabling any of the
following to be used—

(a) a telephone other than a mobile telephone;

(b) the internet;

(c) 30cable television;

(d) satellite television.

Section 5

SCHEDULE 2 Treatment of holding deposit

Application

1 35This Schedule applies where a holding deposit is paid to a landlord or letting
agent in respect of a proposed tenancy of housing in England.

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Interpretation

2 (1) In this Schedule, “the deadline for agreement” means the fifteenth day of the
period beginning with the day on which the landlord or letting agent
receives the holding deposit.

(2) 5But the landlord or the letting agent may agree with the tenant in writing
that a different day is to be the deadline for agreement for the purposes of
this Schedule.

Requirement to repay holding deposit

3 Subject as follows, the person who received the holding deposit must repay
10it if—

(a) the landlord and the tenant enter into a tenancy agreement before the
deadline for agreement,

(b) the landlord decides before the deadline for agreement not to enter
into a tenancy agreement, or

(c) 15the landlord and the tenant fail to enter into a tenancy agreement
before the deadline for agreement.

4 The deposit must be repaid within the period of 7 days beginning with—

(a) where paragraph 3(a) applies, the date of the tenancy agreement,

(b) where paragraph 3(b) applies, the date on which the landlord
20decides not to enter into the tenancy agreement, or

(c) where paragraph 3(c) applies, the deadline for agreement.

Exceptions

5 Paragraph 3(a) does not apply if or to the extent that the amount of the
deposit is applied—

(a) 25towards the first payment of rent under the tenancy, or

(b) towards the payment of the tenancy deposit in respect of the tenancy.

6 If all or part of the amount of the deposit is applied in accordance with
paragraph 5(b), the amount applied is treated for the purposes of section 213
of the Housing Act 2004 (requirements in connection with deposits) as
30having been received by the landlord on the date of the tenancy agreement.

7 Paragraph 3(b) or (c) does not apply if—

(a) the landlord is prohibited by section 22 of the Immigration Act 2014
(persons disqualified by immigration status) from granting a
tenancy of the housing to the tenant,

(b) 35the landlord did not know, and could not reasonably have been
expected to know, the prohibition applied before the deposit was
accepted, and

(c) if the landlord has instructed a letting agent in relation to the
proposed tenancy, the letting agent did not know, and could not
40reasonably have been expected to know, the prohibition applied
before the deposit was accepted.

8 Paragraph 3(b) or (c) does not apply if the tenant provides false or
misleading information to the landlord or letting agent and—

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(a) the landlord is reasonably entitled to take into account the difference
between the information provided by the tenant and the correct
information in deciding whether to grant a tenancy to the tenant, or

(b) the landlord is reasonably entitled to take the tenant’s action in
5providing incorrect or misleading information into account in
deciding whether to grant such a tenancy.

9 Paragraph 3(c) does not apply if the tenant notifies the landlord or letting
agent before the deadline for agreement that the tenant has decided not to
enter into a tenancy agreement.

10 10Paragraph 3(c) does not apply where the deposit is paid to the landlord if—

(a) the landlord takes all reasonable steps to enter into a tenancy
agreement before the deadline for agreement, and

(b) if the landlord has instructed a letting agent in relation to the
proposed tenancy, the agent takes all reasonable steps to assist the
15landlord to enter into a tenancy agreement before that date, but

(c) the tenant fails to take all reasonable steps to enter into a tenancy
agreement before that date.

11 Paragraph 3(c) does not apply where the deposit is paid to the letting agent
if—

(a) 20the agent takes all reasonable steps to assist the landlord to enter into
a tenancy agreement before the deadline for agreement, and

(b) the landlord takes all reasonable steps to enter into a tenancy
agreement before that date, but

(c) the tenant fails to take all reasonable steps to enter into a tenancy
25agreement before that date.

Section 8

SCHEDULE 3 Financial penalties etc

Interpretation

1 (1) In this Schedule, references to a “financial penalty” include a reference to an
30amount which is required to be paid under section 10(2), (5) or (8) or 11(1).

(2) In this Schedule, references to “imposing a financial penalty” include
reference to requiring the payment of such an amount.

(3) This paragraph does not apply to paragraph 6(6) or (7) (appeals), 7 (recovery
of financial penalty), 10 or 11 (proceeds of financial penalties).

35Notice of intent

2 (1) This paragraph applies where an enforcement authority proposes to impose
a financial penalty for a breach of section 1 (prohibitions applying to
landlords) or 2 (prohibitions applying to letting agents) or Schedule 2
(treatment of holding deposit).

(2) 40Before imposing the financial penalty, the enforcement authority must serve
a notice on the landlord or letting agent of its proposal to do so (a “notice of
intent”).

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(3) The notice of intent must be served before the end of the period of 6 months
beginning with the first day on which the enforcement authority has
sufficient evidence of the breach, subject to sub-paragraph (4).

(4) If the breach is committed on that day, and the breach continues beyond the
5end of that day, the notice of intent may be served—

(a) at any time when the breach is continuing, or

(b) within the period of 6 months beginning with the last day on which
the breach occurs.

(5) The notice of intent must set out—

(a) 10the date on which the notice of intent is served,

(b) the amount of the proposed financial penalty,

(c) the reasons for proposing to impose the penalty, and

(d) information about the right to make representations under
paragraph 3.

15Right to make representations

3 A person who receives a notice of intent may, within the period of 28 days
beginning with the day after the day on which the notice of intent was
served, make written representations to the authority about the proposal to
impose a financial penalty on that person.

20Final notice

4 (1) After the end of the period mentioned in paragraph 3 the enforcement
authority must—

(a) decide whether to impose a financial penalty on the person, and

(b) if it decides to do so, decide the amount of the penalty.

(2) 25If the enforcement authority decides to impose a financial penalty, it must
serve a notice on the person (a “final notice”) imposing that penalty.

(3) The final notice must require the penalty to be paid within the period of 28
days beginning with the day after that on which the notice was served.

(4) The final notice must set out—

(a) 30the date on which the final notice is served,

(b) the amount of the financial penalty,

(c) the reasons for imposing the penalty,

(d) information about how to pay the penalty,

(e) the period for payment of the penalty,

(f) 35information about rights of appeal, and

(g) the consequences of failure to comply with the notice.

Withdrawal or amendment of notice

5 (1) The enforcement authority may at any time—

(a) withdraw a notice of intent or final notice,

(b) 40reduce an amount specified in a notice of intent or final notice, or

(c) amend a notice of intent or final notice to remove the requirement to
pay an amount which the authority required to be paid under section
10(2), (5) or (8) or 11(1).

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(2) The power in sub-paragraph (1) is to be exercised by giving notice in writing
to the person on whom the notice was served.

Appeals

6 (1) A person on whom a final notice is served may appeal to the First-tier
5Tribunal against—

(a) the decision to impose the penalty, or

(b) the amount of the penalty.

(2) An appeal under this paragraph must be brought within the period of 28
days beginning with the day after that on which the final notice was served.

(3) 10If an appeal is brought under this paragraph, the final notice is suspended
until the appeal is finally determined, withdrawn or abandoned.

(4) An appeal under this paragraph—

(a) is to be a re-hearing of the authority’s decision, but

(b) may be determined having regard to matters of which the authority
15was unaware.

(5) On an appeal under this paragraph the First-tier Tribunal may quash,
confirm or vary the final notice.

(6) The final notice may not be varied so as to make it impose a financial penalty
of more than £5,000 unless section 8(3) applies.

(7) 20If section 8(3) applies, the final notice may not be varied so as to make it
impose a financial penalty of more than £30,000.

Recovery of financial penalty

7 (1) This paragraph applies if a person who is liable to pay a financial penalty
under section 8 does not pay the whole or any part of that financial penalty
25in accordance with the final notice imposing that penalty.

(2) The enforcement authority which imposed the financial penalty may
recover the penalty or part on the order of the county court as if it were
payable under an order of that court.

(3) In proceedings before the county court for the recovery of a financial penalty
30or part of a financial penalty, a certificate which is—

(a) signed by the chief finance officer of the authority which imposed the
penalty, and

(b) states that the amount due has not been received by a date specified
in the certificate,

35is evidence of that fact.

(4) A certificate to that effect and purporting to be so signed is to be treated as
being so signed unless the contrary is proved.

(5) In this paragraph, “chief finance officer” has the same meaning as in section
5 of the Local Government and Housing Act 1989.