Administration Fee (Admin Fees)
- There are various time consuming administrative jobs required to establish due diligence.
- These jobs are not free in that someone has to pay.
- Who should pay the costs of: setting up a tenancy, vetting and credit checking? In 2013 parliament debated justification for such fees.
- In Scotland the 1984 Rent Act prohibits administration per-tenancy fees. England has since followed.
- These jobs cannot all be conducted in-house by letting agencies - some jobs require outside organizations to act, precisely because they must be seen to be independent, i.e. unbiased, such as inventory clerks. The reasoning is that, in the event of a dispute, a court can see that there is likely to be impartiality, since inventory clerks must work to a set code of practice.
- Others jobs require specialist access to protected data enabling credit checks.
- The agency pays these fees and used to recover them form landlords and tenants.
- The tenant Fees Act 2019 prohibited most lettings fees from 1 June 2019. It remains acceptable to apply fees for e.g. lost keys provided they are reasonable. Deposits were capped under the same act.
- "From 1 June 2019, the only payments that landlords or letting agents can charge to tenants in relation to new contracts are:
- rent
- a refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
- a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- payments associated with early termination of the tenancy, when requested by the tenant
- payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
- payments in respect of utilities, communication services, TV licence and Council Tax
- a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement" Tenant Fees Act - GOV.UK (www.gov.uk)
Published: 5 November 2013 Last Updated: 19 November 2021