Many tenants may treat the news of the Tenant Fees Bill as good news and an opportunity to review their existing living arrangements.
As a landlord, you may not want to lose good tenants, particularly if they are reliable, pay their rent on time and keep your property clean and in good condition.
By opening dialogue with tenants, you may be able to ascertain if they are happy with their present living arrangements or if there is anything they are unhappy about. That gives you the opportunity of remedial action.
As of 1 June 2019, you are only able to charge tenants for a specific list of fees. If you charge any other now banned fee to an existing tenant, you will be unable to serve a valid Section 21 notice until you have provided a full refund of this charge.
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.
We provide landlord insurance for a wide range of properties and tenants including multi occupancy, students, local authority placements, unoccupied and much more. See our landlord insurance page or call 0344 346 0409 for more.
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.
Alison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.
Date: April 03, 2019