Tenant Fees Bill (HL Bill 129)

Prohibitions etc applying to landlords and letting agents

1 Prohibitions applying to landlords

(1) A landlord must not require a relevant person to make a prohibited payment
to the landlord in connection with a tenancy of housing in England.

(2) 5A landlord must not require a relevant person to make a prohibited payment
to a third party in connection with a tenancy of housing in England.

(3) A landlord must not require a relevant person to enter into a contract with a
third party in connection with a tenancy of housing in England if that contract
is—

(a) 10a contract for the provision of a service, or

(b) a contract of insurance.

(4) Subsection (3) does not apply if the contract is for—

(a) the provision of a utility to the tenant, or

(b) the provision of a communication service to the tenant.

(5) 15A landlord must not require a relevant person to make a loan to any person in
connection with a tenancy of housing in England.

(6) For the purposes of this section, a landlord requires a relevant person to make
a payment, enter into a contract or make a loan in connection with a tenancy of
housing in England if and only if the landlord—

(a) requires the person to do any of those things in consideration of the
5grant, renewal, continuance, variation, assignment, novation or
termination of such a tenancy,

(b) requires the person to do any of those things pursuant to a provision of
a tenancy agreement relating to such a tenancy which requires or
purports to require the person to do any of those things in the event of
10an act or default of the person,

(c) requires the person to do any of those things pursuant to a provision of
a tenancy agreement relating to such a tenancy which requires or
purports to require the person to do any of those things if the tenancy
is varied, assigned, novated or terminated,

(d) 15enters into a tenancy agreement relating to such a tenancy which
requires or purports to require the person to do any of those things
other than in the circumstances mentioned in paragraph (b) or (c),

(e) requires the person to do any of those things—

(i) as a result of an act or default of the person relating to such a
20tenancy or housing let under it, and

(ii) otherwise than pursuant to, or for the breach of, a provision of
a tenancy agreement, or

(f) requires the person to do any of those things in consideration of
providing a reference in relation to that person in connection with the
25person’s occupation of housing in England.

(7) For the purposes of this section, a landlord does not require a relevant person
to make a payment, enter into a contract or make a loan if the landlord gives
the person the option of doing any of those things as an alternative to
complying with another requirement imposed by the landlord or a letting
30agent.

(8) Subsection (7) does not apply if—

(a) the other requirement is prohibited by this section or section 2 (ignoring
subsection (7) or section 2(6), or

(b) it would be unreasonable to expect a relevant person to comply with
35the other requirement.

(9) In this Act “relevant person” means—

(a) a tenant, or

(b) a person acting on behalf of, or who has guaranteed the payment of rent
by, a tenant.

2 40Prohibitions applying to letting agents

(1) A letting agent must not require a relevant person to make a prohibited
payment to the letting agent in connection with a tenancy of housing in
England.

(2) A letting agent must not require a relevant person to make a prohibited
45payment to a third party in connection with a tenancy of housing in England.

(3) A letting agent must not require a relevant person to enter into a contract with
a third party in connection with a tenancy of housing in England if the contract
is—

(a) a contract for the provision of a service, or

(b) a contract of insurance.

(4) A letting agent must not require a relevant person to make a loan to any person
in connection with a tenancy of housing in England.

(5) 5For the purposes of this section, a letting agent requires a relevant person to
make a payment, enter into a contract or make a loan in connection with a
tenancy of housing in England if and only if the letting agent—

(a) requires the person to do any of those things in consideration of
arranging the grant, renewal, continuance, variation, assignment,
10novation or termination of such a tenancy,

(b) requires the person to do any of those things pursuant to a provision of
an agreement with the person relating to such a tenancy which requires
or purports to require the person to do any of those things in the event
of an act or default of the person,

(c) 15requires the person to do any of those things pursuant to a provision of
an agreement with the person relating to such a tenancy which requires
or purports to require the person to do any of those things if the tenancy
is varied, assigned, novated or terminated,

(d) requires the person to do any of those things—

(i) 20as a result of an act or default of the person relating to such a
tenancy or housing let under it, and

(ii) otherwise than pursuant to, or for the breach of, an agreement
entered into before the person’s act or default, or

(e) requires the person to do any of those things in consideration of
25providing a reference in relation to that person in connection with the
person’s occupation of housing in England.

(6) For the purposes of this section, a letting agent does not require a relevant
person to make a payment, enter into a contract or make a loan if the letting
agent gives the person the option of doing any of those things as an alternative
30to complying with another requirement imposed by the letting agent or the
landlord.

(7) Subsection (6) does not apply if—

(a) the other requirement is prohibited by this section or section 1 (ignoring
subsection (6) or section 1(7)), or

(b) 35it would be unreasonable to expect a relevant person to comply with
the other requirement.

(8) This section does not apply to a requirement imposed by a letting agent on a
relevant person if—

(a) the requirement is imposed by the letting agent in consideration of
40providing a service to a tenant,

(b) as part of that service the agent finds housing for the tenant to rent and
the tenant rents that housing, and

(c) the agent does not act on behalf of the landlord of that housing,
whether in relation to that housing or any other housing.

3 45Prohibited and permitted payments

(1) For the purposes of this Act a payment is a prohibited payment unless it is a
permitted payment by virtue of Schedule 1.

(2) The Secretary of State may by regulations made by statutory instrument
amend Schedule 1 by adding, modifying or removing a reference to a
permitted payment.

(3) The power in subsection (2) does not extend to removing rent from the
5categories of payment which are permitted payments under this Act.

(4) Regulations under this section—

(a) may make different provision for different purposes;

(b) may make supplemental, incidental, consequential, transitional,
transitory or saving provision.

(5) 10Subject to subsection (6), a statutory instrument containing regulations under
this section may not be made unless a draft of the instrument has been laid
before and approved by a resolution of each House of Parliament.

(6) Subsection (5) does not apply to a statutory instrument containing only
regulations under this section which amend the amount for the time being set
15out in paragraph 5(2)(a) of Schedule 1 (maximum amount of permitted
payment on variation, assignment or novation of a tenancy) for the purposes
only of reflecting changes in the value of money.

(7) A statutory instrument to which subsection (6) applies is subject to annulment
in pursuance of a resolution of either House of Parliament.

4 20Effect of a breach of section 1 or 2

(1) A term of a tenancy agreement which breaches section 1 is not binding on the
tenant.

(2) A term of an agreement between a letting agent and a tenant which breaches
section 2 is not binding on the tenant.

(3) 25Where a term of an agreement is not binding on a tenant as a result of this
section, the agreement continues, so far as practicable, to have effect in every
other respect.

(4) If a relevant person makes a loan to a person pursuant to a requirement which
breaches section 1(5) or 2(4), the loan is repayable by the borrower to the
30relevant person on demand.

5 Treatment of holding deposit

Schedule 2 makes provision about the treatment of holding deposits.

Enforcement

6 Enforcement by local weights and measures authorities

(1) 35It is the duty of every local weights and measures authority in England to
enforce in its area—

(a) section 1 (prohibitions applying to landlords),

(b) section 2 (prohibitions applying to letting agents), and

(c) Schedule 2 (treatment of holding deposit).

(2) The duty in subsection (1) is subject to sections 14(5) (enforcement by another
enforcement authority) and 24 (enforcement by the lead enforcement
authority).

(3) Where a breach of section 1 or 2 or Schedule 2 relates to housing which is
5located in the area of more than one local weights and measures authority, the
breach is taken to have occurred in each of those areas.

(4) A local weights and measures authority in England must have regard to any
guidance issued by the Secretary of State or the lead enforcement authority (if
not the Secretary of State) about the exercise of its functions under this Act.

(5) 10For the investigatory powers available to a local weights and measures
authority in England for the purposes of enforcing this Act, see Schedule 5 to
the Consumer Rights Act 2015.

(6) In paragraph 10 of Schedule 5 to the Consumer Rights Act 2015 (duties and
powers to which Schedule 5 applies), at the appropriate place insert “section 6
15of the Tenant Fees Act 2018.”

7 Enforcement by district councils

(1) A district council which is not a local weights and measures authority may
enforce sections 1 and 2 and Schedule 2.

(2) A district council must have regard to any guidance issued by the Secretary of
20State or the lead enforcement authority (if not the Secretary of State) about the
exercise of its functions under this Act.

(3) For the investigatory powers available to a district council for the purposes of
enforcing this Act, see Schedule 5 to the Consumer Rights Act 2015.

(4) In paragraph 10 of Schedule 5 to the Consumer Rights Act 2015 (duties and
25powers to which Schedule 5 applies), at the appropriate place insert “section 7
of the Tenant Fees Act 2018.”

(5) In this Act “enforcement authority” means—

(a) a local weights and measures authority in England, or

(b) a district council which is not a local weights and measures authority.

8 30Financial penalties

(1) Where an enforcement authority is satisfied beyond reasonable doubt that a
person has breached section 1 or 2 or Schedule 2, the authority may impose a
financial penalty on the person in respect of the breach.

(2) The financial penalty—

(a) 35may be of such amount as the authority determines, but

(b) subject to subsection (3), must not exceed £5,000.

(3) If the enforcement authority is satisfied beyond reasonable doubt that the
person has committed an offence under section 12, the financial penalty—

(a) may exceed £5,000, but

(b) 40must not exceed £30,000.

(4) An enforcement authority may not impose a financial penalty under this
section on a person in respect of any conduct amounting to an offence under
section 12 if—

(a) the person has been convicted of an offence under that section in
5respect of the conduct,

(b) criminal proceedings for an offence under that section in respect of the
conduct have been instituted against the person and the proceedings
have not been concluded, or

(c) criminal proceedings for an offence under that section in respect of the
10conduct have been concluded and the person has not been convicted of
the offence.

(5) An enforcement authority may not impose a financial penalty under this
section on a person for a breach of Schedule 2 in relation to a holding deposit
if—

(a) 15the person failed to return the deposit in accordance with that Schedule
because the person believed that the landlord was prohibited by section
22 of the Immigration Act 2014 from granting a tenancy of the housing
to the tenant, and

(b) the person’s belief was based on incorrect information provided by the
20Secretary of State.

(6) Only one financial penalty under this section may be imposed in respect of the
same breach.

(7) An enforcement authority may impose a financial penalty under this section in
respect of a breach which occurs outside that authority’s area (as well as in
25respect of a breach which occurs within that area).

(8) Schedule 3 makes further provision about financial penalties under this section
and other payments required to be made under this Act.

9 Power to amend maximum financial penalties

(1) The Secretary of State may by regulations made by statutory instrument
30amend the amount for the time being set out in section 8(2)(b) or (3)(a) or (b)
(financial penalties).

(2) The power in subsection (1) may be exercised only where the Secretary of State
considers it is expedient to do so to reflect changes in the value of money.

(3) Regulations under this section may make transitional, transitory or saving
35provision.

(4) A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

10 Recovery by enforcement authority of amount paid

(1) Subsection (2) applies where an enforcement authority—

(a) 40imposes a financial penalty under section 8 on a landlord or letting
agent for breaching section 1 or 2,

(b) is satisfied on the balance of probabilities that the breach resulted in a
relevant person making a prohibited payment to a landlord, letting
agent or third party, and

(c) is satisfied on the balance of probabilities that all or part of the
prohibited payment has not been repaid to the relevant person.

(2) The enforcement authority may require the landlord or letting agent to pay to
the relevant person—

(a) 5if none of the prohibited payment has been repaid to the relevant
person, the amount of the prohibited payment;

(b) if part of the prohibited payment has been repaid to the relevant
person, the remaining part of the prohibited payment.

(3) But subsection (2) does not apply in relation to a prohibited payment if or to
10the extent that, with the consent of the relevant person—

(a) the prohibited payment, or the remaining part of it, has been applied
towards a payment of rent under the tenancy, or

(b) the prohibited payment, or the remaining part of it, has been applied
towards the tenancy deposit in respect of the tenancy.

(4) 15Subsection (5) applies where an enforcement authority—

(a) imposes a financial penalty under section 8 on a landlord or letting
agent for breaching section 1 or 2,

(b) is satisfied on the balance of probabilities that the breach resulted in a
relevant person entering into a contract with a third party, and

(c) 20is satisfied on the balance of probabilities that the relevant person has
made a payment or payments under the contract.

(5) The enforcement authority may require the landlord or letting agent to pay to
the relevant person an amount which does not exceed the amount of the
payment or (as the case may be) the aggregate amount of the payments that the
25relevant person has made.

(6) Subsection (8) applies where an enforcement authority—

(a) imposes a financial penalty under section 8 on a landlord or letting
agent for breaching Schedule 2 (treatment of holding deposit), and

(b) is satisfied on the balance of probabilities that all or part of the holding
30deposit has not been repaid to the relevant person.

(7) Subsection (8) also applies where an enforcement authority—

(a) could have imposed a financial penalty under section 8 on a landlord
or letting agent for breaching Schedule 2 but for subsection (5) of that
section (incorrect belief that immigration-related prohibition on
35granting tenancy applied), and

(b) is satisfied on the balance of probabilities that all or part of the holding
deposit has not been repaid to the relevant person.

(8) The enforcement authority may require the landlord or letting agent to pay to
the relevant person—

(a) 40if none of the holding deposit has been repaid to the relevant person,
the amount of the holding deposit;

(b) if part of the holding deposit has been repaid to the relevant person, the
remaining part of the holding deposit.

(9) But subsection (8) does not apply in relation to a holding deposit if or to the
45extent that, with the consent of the relevant person—

(a) the holding deposit, or the remaining part of it, has been applied
towards a payment of rent under the tenancy, or

(b) the holding deposit, or the remaining part of it, has been applied
towards the tenancy deposit in respect of the tenancy.

(10) Subsection (2), (5) or (8) does not apply if the relevant person has made an
application under section 15 (application to the First-tier Tribunal) for recovery
5of all or part of the amount or (as the case may be) the aggregate amount
referred to in that subsection.

11 Interest on payments under section 10

(1) Where an enforcement authority requires a landlord or letting agent to pay an
amount under section 10, the authority may require the landlord or letting
10agent to pay interest on that amount.

(2) If an enforcement authority requires a landlord or letting agent to pay interest
on an amount under subsection (1)—

(a) the amount carries interest from the date specified in subsection (3)
until the date on which the amount is paid;

(b) 15the rate of interest is the rate for the time being specified in section 17
of the Judgments Act 1838.

(3) That date is—

(a) where the amount is required to be paid under section 10(2), the date
on which the prohibited payment was made;

(b) 20where the amount is required to be paid under section 10(5), the day on
which the payment or (as the case may be) the first of the payments
under the contract was made;

(c) where the amount is required to be paid under section 10(8), the day
after the end of the period within which the holding deposit is required
25to be repaid in accordance with paragraph 4 of Schedule 2.

(4) The total amount of interest imposed under subsection (1) must not exceed the
amount required to be paid under section 10.

12 Offences

(1) A person commits an offence if—

(a) 30the person breaches section 1 or 2,

(b) a relevant penalty has been imposed on the person in respect of a
different breach of the same section and the final notice imposing the
penalty has not been withdrawn, or the person has been convicted of
an offence in respect of such a breach, and

(c) 35the breach mentioned in paragraph (a) occurs within the period of five
years beginning with the day on which the relevant penalty was
imposed or the person was convicted.

(2) For the purposes of subsection (1)(c) a relevant penalty is imposed on the date
specified in the final notice in respect of that penalty as the date on which it is
40served.

(3) A person guilty of an offence under this section is liable on summary
conviction to a fine.

(4) A person may not be convicted of an offence under this section in respect of the
breach mentioned in subsection (1)(a) if a financial penalty has been imposed
45under section 8 in respect of that breach.

(5) In this section, “relevant penalty” means a financial penalty which is imposed
under section 8 where—

(a) the period for bringing an appeal against the penalty under paragraph
6 of Schedule 3 has expired without an appeal being brought,

(b) 5an appeal against the financial penalty under that paragraph has been
withdrawn or abandoned, or

(c) the final notice imposing the penalty has been confirmed or varied on
appeal.

(6) In section 14 of the Housing and Planning Act 2016, after subsection (4) insert—

“(5) 10An offence under section 12 of the Tenant Fees Act 2018 is also a
banning order offence for the purposes of this Part.”

13 Offences by bodies corporate

(1) Where an offence under section 12 (offences) committed by a body corporate is
proved to have been committed with the consent or connivance of, or to be
15attributable to any neglect on the part of, an officer of a body corporate, the
officer as well as the body corporate commits the offence and is liable to be
proceeded against and punished accordingly.

(2) Where the affairs of a body corporate are managed by its members, subsection
(1) applies in relation to the acts and defaults of a member in connection with
20the member’s functions of management as if the member were an officer of the
body corporate.

14 Duty to notify when taking enforcement action

(1) Where a local weights and measures authority in England (“LA1”) proposes to
take enforcement action in respect of a breach which occurs (or which also
25occurs) in the area of a different local weights and measures authority in
England (“LA2”), LA1 must notify LA2 that it proposes to do so.

(2) If LA1 notifies LA2 under subsection (1) but does not take the action referred
to in that subsection, LA1 must notify LA2 of that fact.

(3) Where a district council proposes to take enforcement action in respect of a
30breach, the district council must notify the local weights and measures
authority for the area in which the breach occurs (or in which the breach also
occurs) that it proposes to do so.

(4) If a district council notifies a local weights and measures authority under
subsection (3) but does not take the action referred to in that subsection, the
35district council must notify the local weights and measures authority of that
fact.

(5) Where a local weights and measures authority receives a notification under
subsection (1) or (3), the authority is relieved of its duty to take enforcement
action in relation to the breach unless the authority receives a notification
40under subsection (2) or (4).

(6) An enforcement authority must notify the lead enforcement authority as soon
as reasonably practicable if—

(a) the enforcement authority imposes a financial penalty under section 8
(financial penalties),