A letting fees ban loophole could be abused by rogue landlords

The Tenants Fees Bill has continued its smooth progress through the House of Commons, with its second reading going off without a hitch this week.

MPs debated the proposed legislation, which aims to ban landlords from charging unfair fees in the private rental market, for three hours before passing it unanimously and sending it on to the committee stage.

New Housing Secretary James Brokenshire introduced the bill and heralded it as the “latest step in our work to create a housing market that is fit for the future”.

People who rent their homes should be protected against paying millions in unfair fees. The loophole in the Tenant Fees Bill should be closed https://t.co/QoWe9WeQf2

— CitizensAdvice (@CitizensAdvice) May 22, 2018

But independent advice charity Citizens Advice has called on the government to close a loophole that could see renters left vulnerable to “default fees”. A number of MPs echoed their pleas in last night’s debate.

The clause has been included in the bill to allow landlords to charge for tenancy breaches, late rent or to replace lost keys but there are currently no restrictions limiting the fee with the government promising to issue guidance on reasonable amounts.

But, as this would not be legally enforceable, Citizens Advice is calling on lawmakers to prevent landlords using default fees to pass on unnecessary and unfair costs to tenants. And the charity insists that the clampdown will benefit landlords too – providing a clearer steer on the rules to stop rogue property owners and agents from gaining an advantage.

Gillian Guy, Citizens Advice chief executive, said: “The government’s pledge to ban fees will be fundamentally undermined unless the clause on default fees is significantly tightened.

“The loophole leaves tenants vulnerable to rogue landlords and agents looking to continue charging unfair fees.”

In debate on #TenantFeesBill – while banning letting fees is positive step forward, elephant in room is massively escalating private sector rents. Urgently need rent controls to stop and reverse those rising costs if serious about helping people in places like #Brighton

— Caroline Lucas (@CarolineLucas) May 21, 2018

A further amendment to the bill to cap security deposits at four weeks instead of six weeks is also being called for – by Citizens Advice and Caroline Lucas.

During last night’s debate, the Green Party co-leader asked Brokenshire: “Can [you] explain why he has gone for a figure that means that only about 8 per cent of renters will benefit and that many others will see their rents go up as a result?”

The Housing Secretary insisted that the rate was an “upper limit” and offered landlords the “flexibility to accept higher-risk tenants”.