How Can Landlords Prepare for the Tenant Fees Bill?

Be prepared for the ban on letting agent fees

From 1 June 2019, you will only be able to charge tenants for a specific list of fees. If you charge any other now banned fee to an existing tenant after this date, you will be unable to serve a valid Section 21 notice until you have provided a full refund of this charge.

Check your tenant contract templates

Furthermore, it would make sense to review and update your existing contract templates ahead of the ban on letting agent fees, to ensure they do not include clauses that will no longer be valid, pertaining to outlawed fees.

Check price or service changes from your letting agent

Many letting agents may still be analysing the effects of the Tenant Fees Bill, but most have been aware of the ban on tenant fees for some time.

If you use a letting agency for services, it may be prudent to have a conversation with them to establish if their charging structure is going to change, or if they intend to amend the services they supply.

It is worth asking how new technology might change the relationship, as several agencies are looking to deploy software to streamline their services and save costs. However, is that going to suit you as a landlord and will you receive the same level of service you have become accustomed to?

The bottom line for most landlords is going to be whether agents make up any shortfall in revenues, as a result of not being able to charge tenants, by adding costs to landlord services.

It is worth fully investigating whether you are going to face higher costs – and just to clarify, you might also want to speak with a tax specialist to understand which agent costs are tax deductible. This might in the long run save you having to hike rents, particularly if you are keen to keep your existing tenants.

Secure any new rental property ahead of the 1 June rush

If you are thinking of investing in buy to let or you are looking to remortgage, it might be worth starting the process as soon as possible, ahead of the expected surge in demand for rental property after 1 June.

It can take time for a buy to let mortgage application to complete its process, as no two cases are the same. The only certainty is that the longer you leave it, the less likely you are to have a property ready to let out.

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Note: Every effort has been made to ensure the above information is correct at the time of this article going online, however, we recommend that you seek professional advice if required.

Originally written by Andrew Turner, chief executive at Commercial Trust Limited.