Despite all the pressures that Brexit is placing on parliamentary time, the Tenant Fees Bill has been making rapid progress through parliament. While this speedy parliamentary journey may be good for moving the bill closer towards implementation, we shouldn’t forget there are still areas of the legislation (as currently drafted) that will leave private renters open to continuing exploitation.
Here’s our update on the parliamentary journey so far, which sets out the areas the government still needs to address if the bill is to have maximum benefit for private renters.
Journey progress to date and concerns raised
Since our last blog about the ban on fees, the bill passed its second reading in the House of Commons and been through the Committee Stage. The second reading debate showed the continued cross-party support for banning letting fees. All parties support the principle that tenants should no longer pay these extortionate fees. However, despite widespread support for the aims of the bill, MPs raised concerns about some of the details.
Ahead of the second reading, many of our supporters contacted their local MP to express concerns about default fees. MPs from across political parties listened to these concerns and raised the issue during the debate, highlighting the potential for default fees to be abused. One MP even shared some of the examples, submitted by our supporters, of extortionate default fees – including the highly questionable £45 ‘procurement fee’ for a new dustpan and brush.
MPs also raised other concerns – including the level of the deposit cap, lack of clarity around the terms for returning holding deposits, and potential difficulties enforcing the bill.
After the second reading, the bill entered the Committee Stage where it was examined in detail by a committee of cross-party MPs. We submitted written evidence to the committee and gave oral evidence, alongside Citizens Advice, Generation Rent, and the National Union of Students. MPs also heard evidence from letting agents, landlords and local authority representatives who will oversee enforcement of the bill.
Key messages to the committee
In our evidence to the committee, we reiterated how much the bill will benefit private renters by saving them significant amounts of money every time they move. However, we also highlighted that if the government wants to fully protect tenants from unfair charges, they must provide more protections over the use of ‘default’ fees.
In particular, we argued that when a tenant defaults (doesn’t pay their rent), a landlord or agent should only be able to charge for the ‘reasonable loss’ associated with that – and that any loss should be evidenced. Examples of things we don’t think it would be reasonable for landlords and agents to charge include a fixed hourly rate for their time on fixing defaults, or charging for every letter to chase late rent. We think these administrative costs are part of a landlord’s and agent’s business costs, which they should expect to pay as part of managing a property. If you consider the reverse situation, a tenant doesn’t receive any financial compensation every time they have to chase a landlord or agent to fulfill one of their obligations, like fixing a repair issue.
What happens now?
The bill survived the Committee Stage without any amendments. Next up, it’s the report stage, where all MPs will have the opportunity to discuss the bill again and consider amendments. After this, the bill will move into the House of Lords – although we don’t expect this to happen until after the summer.
It’s unlikely there will be any significant amendments at report stage. But we hope the debate will reiterate the need for the government to address the concerns around default fees.
The government has so far failed to listen – despite significant evidence that the current terms are unclear, open to abuse and almost impossible to enforce. If it continues to ignore these concerns, the government is at risk of leaving renters in a position where they will continue to face some of the most arbitrary charges from landlords and letting agents. We know this is not the government’s intention, but as the bill approaches the midway point in its parliamentary journey, the government is running out of time to make sure the terms of the bill will fully deliver its aims of a fairer and more affordable lettings market.