The tenant fee ban has been in place in England since June 2019, so it’s been a while now, but some people are still not entirely aware of it. The tenant fee ban made it illegal to charge tenants any fees other than the rent they pay, contract renewal or modification fees (no more than £50), default fees (like cutting a new key when the original is lost), a security deposit (no more than five weeks’ rent), and a refundable holding deposit (no more than a week’s rent).
Everything else that could have been charged in the past, such as check-in and check-out fees, administrative fees, inventory fees, and cleaning fees, was taken away.
Referencing After The Tenant Fee Ban
This list of illegal fees also included any fees for checking a tenant’s references, which many landlords and letting agents used to charge tens or even hundreds of pounds for.
Now, landlords and letting agents are the ones who have to pay for a tenant’s references. This usually includes a credit check, which the agent or landlord must now pay for, either on their own or through a referencing agency.
You will also be asked to provide or suggest some of the other references, such as your employer, a previous landlord, your bank, and a guarantor if you’ve never rented before.
If you’re looking for a place to rent in an area with a lot of competition, it’s best to have these references ready before you start viewings since it can take days or even weeks to find them.
Remember that if a landlord or letting agent takes a holding deposit from you and then asks you for the information they need to do a credit check, but you don’t give them the information they need or take too long, you could lose your holding deposit. This is perfectly valid even under the tenant fee ban.
You could also lose some or all of your holding deposit if you don’t pass referencing. For example, if a previous landlord says you broke something or were kicked out for not paying rent, you could lose some or all of your holding deposit.
One important point here. Referencing can be done in either of two ways. Most of the time, the agent or landlord will “put you through referencing,” which means they will pay for it. Or, they may ask you to find your own references and suggest that you use this or that paid service.
This is fine, but it CANNOT be a condition of the lease going forward. So they can’t say, “You can sign the contract once you’ve gone through references with XYZ company.” It has to be up to you.
This also applies to a lot of other things. For example, a letting agent can’t make it a requirement for a tenant to get contents insurance, sign up with a certain energy provider, or use a certain alternative rental deposit service before accepting them as a tenant.