Tenant Fees Bill (HL Bill 129)

Tenant Fees BillPage 20

(b) after subsection (5) insert—

(6) For provisions about enforcement of regulations under section
133 or 134 or under this section by the lead enforcement
authority, see sections 22 to 24 of the Tenant Fees Act 2018.

(7) 5In this section “lead enforcement authority” has the meaning
given by section 22(1) of the Tenant Fees Act 2018.”

28 Transitional provision

(1) Subject as follows, section 1 (prohibitions applying to landlords) does not
apply to—

(a) 10a requirement imposed before the coming into force of that section, or

(b) a requirement imposed by or pursuant to a tenancy agreement entered
into before the coming into force of that section.

(2) Subject as follows, section 1 does not apply to a requirement imposed by or
pursuant to an agreement relating to a periodic tenancy which arises—

(a) 15under section 5(2) of the Housing Act 1988 after the coming into force
of section 1, and

(b) on the coming to an end of a fixed term tenancy which was entered into
before the coming into force of that section,

(referred to in this section as a “relevant statutory tenancy”).

(3) 20Subsections (5) and (6) apply in relation to a provision of a tenancy agreement
entered into before the coming into force of section 1 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.

(4) Subsections (5) and (6) apply in relation to a provision of an agreement relating
25to a relevant statutory tenancy if, had the provision been included in a tenancy
agreement entered into after the coming into force of section 1, that section
would have applied in relation to that provision or a requirement imposed
pursuant to it.

(5) After the end of the period of one year beginning with the date on which
30section 1 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).

(6) If, after the end of the period of one year beginning with the date on which
section 1 comes into force—

(a) 35the landlord or a letting agent accepts a payment from the tenant
pursuant to the provision, and

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

40the landlord or 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.

(7) Subject as follows, section 2 (prohibitions applying to letting agents) does not
apply to—

(a) 45a requirement imposed before the coming into force of that section, or

Tenant Fees BillPage 21

(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) Subsections (9) and (10) apply in relation to a provision of an agreement
5between 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) After the end of the period of one year beginning with the date on which
10section 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
section 2 comes into force—

(a) 15the letting agent accepts a payment from the tenant pursuant to the
provision, and

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

the letting agent is to be treated for the purposes of this Act as having required
20the 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
such other transitional, transitory or saving provision as the Secretary of State
25considers appropriate in connection with the coming into force of any
provision of this Act.

29 Financial provisions

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
30of State, 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 22

(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 in the event of a default by the tenant is a permitted payment if
the tenancy agreement requires the payment to be made.

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

(a) perform an obligation, or

(b) 35discharge a liability,

arising under or in connection with the tenancy.

(3) But if the amount of the payment exceeds the costs which—

(a) are reasonably incurred by the landlord or letting agent as a result of
the default, and

(b) 40are supported by evidence in writing which is provided to the
person on whom the requirement to make the payment is imposed,

Tenant Fees BillPage 25

the amount of the excess is a prohibited payment.

Payment on variation, assignment or novation of a tenancy

5 (1) A payment is a permitted payment if it is a payment—

(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 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
of notice required under the tenancy agreement or by virtue of any
20rule 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) A payment is a permitted payment if it is a payment to a letting agent in
25consideration 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
of notice required under the tenancy agreement or by virtue of any
30rule 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) In this paragraph “fixed term tenancy” means any tenancy other than a
35periodic tenancy.

Payment in respect of council tax

7 (1) A payment to a billing authority in respect of council tax is a permitted
payment.

(2) In this paragraph “billing authority” has the same meaning as in Part 1 of the
40Local 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 for or in connection with the provision of a utility is a permitted
payment if the tenancy agreement requires the payment to be made.

(2) A payment towards energy efficiency improvements under a green deal
5plan (within the meaning of section 1 of the Energy Act 2011) is a permitted
payment if the tenancy agreement requires the payment to be made.

(3) In this Act “utility” means—

(a) electricity, gas or other fuel, or

(b) water or sewerage.

10Payment in respect of a television licence

9 (1) A payment to the British Broadcasting Corporation in respect of a television
licence is a permitted payment if the tenancy agreement requires the
payment to be made.

(2) In this paragraph “television licence” means a licence for the purposes of
15section 363 of the Communications Act 2003.

Payment in respect of communication services

10 (1) A payment for or in connection with the provision of a communication
service is a permitted payment if the tenancy agreement requires the
payment to be made.

(2) 20But, in the case of a payment 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 of the excess is a prohibited
payment.

(3) In this Act “communication service” means a service enabling any of the
25following to be used—

(a) a telephone other than a mobile telephone;

(b) the internet;

(c) cable television;

(d) satellite television.

Section 5

30SCHEDULE 2 Treatment of holding deposit

Application

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

35Interpretation

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.

Tenant Fees BillPage 27

(2) But 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 5Subject as follows, the person who received the holding deposit must repay
it 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
10into a tenancy agreement, or

(c) the 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) 15where paragraph 3(b) applies, the date on which the landlord
decides 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
20deposit is applied, with the consent of the person by whom it was paid—

(a) towards 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
25of the Housing Act 2004 (requirements in connection with deposits) as
having 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
30tenancy of the housing to the tenant,

(b) the 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
35proposed tenancy, the letting agent did not know, and could not
reasonably 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—

(a) 40the 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
providing incorrect or misleading information into account in
45deciding whether to grant such a tenancy.

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

(a) 5the 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
landlord to enter into a tenancy agreement before that date, but

(c) 10the 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) the agent takes all reasonable steps to assist the landlord to enter into
15a 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
agreement before that date.

Section 8

20SCHEDULE 3 Financial penalties etc

Interpretation

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

(2) 25In this Schedule, references to imposing a financial penalty include A
reference to requiring the payment of such an amount.

(3) This paragraph does not apply to paragraph 4(4) (period for payment), 6(6)
or (7) (appeals), 7 (recovery of financial penalty), 10 or 11 (proceeds of
financial penalties).

30Notice 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) 35Before 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”).

(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
40sufficient evidence of the breach, subject to sub-paragraph (4).

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(4) If the breach is committed on that day, and the breach continues beyond the
end 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
5the breach occurs.

(5) The notice of intent must set out—

(a) the 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) 10information about the right to make representations under
paragraph 3.

Right 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
15served, make written representations to the authority about the proposal to
impose a financial penalty on that person.

Final notice

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

(a) 20decide whether to impose a financial penalty on the person, and

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

(2) If 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 relevant
25period.

(4) In sub-paragraph (3) “the relevant period” means—

(a) in relation to a financial penalty under section 8, the period of 28 days
beginning with the day after that on which the notice is served;

(b) in relation to an amount which is required to be paid under section
3010(2), (5) or (8) or 11(1), the period specified in the notice.

(5) A period specified as mentioned in sub-paragraph (4)(b) must be a period of
at least 7 days but not more than 14 days beginning with the day after that
on which the notice is served.

(6) The final notice must set out—

(a) 35the 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) 40information about rights of appeal, and

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