Tenant Fees Bill - referencing, inventory fees

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  • Pergola
    started a topic Tenant Fees Bill - referencing, inventory fees

    Tenant Fees Bill - referencing, inventory fees

    If the bills passes, am I correct in thinking that landlords can no longer charge for referencing or credit checks and must pay for this themselves?
    Can the lease contain a clause requiring the tenant to pay for an inventory check-out?

  • jpkeates
    replied
    The correct treatment for tax would take care of that because any charges to the tenant are income.
    So you'd pay tax on them and offset that by claiming the allowance.

    So you can charge the tenant, assuming that's justified by the situation and you're not ducking any tax due.

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  • KTC
    replied
    Originally posted by MdeB View Post
    Yes, but then you get into "what is reasonable?".

    Is the HMRC rate reasonable?
    Is a contribution to fixed overheads reasonable (insurance, tax, MOT, servicing...?
    Are only "usage" costs (petrol, tyres, depreciation for mileage...) reasonable?
    If travel cost is allowed, then HMRC mileage rate must be considered reasonable. The mileage rate includes overheads like insurance and tax, so you can't add it in on top.

    But then, depending on your property letting activities, you can claim the mileage from HMRC. I don't imagine you can claim relief on the one hand from HMRC, and charge the same to your tenant.

    I don't think the rules should or would be different based on whether your property letting activities allows you to claim the travel from HMRC, so I doubt travel can be charge to the tenant.

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  • MdeB
    replied
    Originally posted by DPT57 View Post
    Landlord travel costs might be though
    Yes, but then you get into "what is reasonable?".

    Is the HMRC rate reasonable?
    Is a contribution to fixed overheads reasonable (insurance, tax, MOT, servicing...?
    Are only "usage" costs (petrol, tyres, depreciation for mileage...) reasonable?

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  • DPT57
    replied
    Landlord travel costs might be though

    Leave a comment:


  • MdeB
    replied
    Originally posted by jpkeates View Post
    Why not..?
    Schedule 1, para 4
    (3)If, in the case of a payment required to be made to a landlord or letting agent in respect of a relevant default within sub-paragraph (2)(a), the amount of the payment exceeds the costs which—
    (a)are reasonably incurred by the landlord or letting agent as a result of the default, and
    (b)are supported by evidence in writing which is provided to the person on whom the requirement to make the payment is imposed,
    the amount of the excess is a prohibited payment.
    Landlord labour is not a cost.

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  • jrsteeve
    replied
    As an agent in Manchester our plan will be to revise our setup/finding fees, increasing by £125. As a guide our managed service setup fee is £375 at the moment. Currently tenants pay an application fee of approximately £125 each, we don't charge them anything else (no renewal fees, check out, inventory etc). We've never received complaints for over charging and do believe that a service worth paying for is provided to our tenants.

    Management fees won't be changing and we don't charge a renewal fee to let only clients, unless replacement paperwork is needed, for which £75 is charged.

    Unfortunately the actions of largely corporate agents has resulted in a blanket ban, with no thought on the consequences. Rents will increase and we're seeing dozens of landlords exit the market, which is in line with the end game; return stock to occupiers rather than small investors.

    Hopefully Government will outlaw bank charges and mortgage fees next! Never going to happen.

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  • jpkeates
    replied
    Originally posted by MdeB View Post
    But not, I believe, labour by the LL.
    Why not..?

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  • MdeB
    replied
    Originally posted by KTC View Post
    That include reasonable labour cost.
    But not, I believe, labour by the LL.

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  • KTC
    replied
    Originally posted by KTC View Post
    Tenant Fees Bill received Royal Assent today, so is now the Tenant Fees Act 2019.
    http://www.legislation.gov.uk/ukpga/...ntents/enacted

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  • KTC
    replied
    Originally posted by dazwalsh View Post
    As far as i can tell deposits are capped at 5 weeks rent, and the only two fees chargeable are change of locks (with proof of purchase, no allowances for labour or inconvenience) and late payment of rent which is capped at 3% above base rate.
    "are reasonably incurred by the landlord or letting agent as a result of the default"

    That include reasonable labour cost.

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  • KTC
    replied
    (2) Subject as follows, section 1 does not apply to a requirement imposed by or pursuant to an agreement relating to a periodic tenancy which arises—

    ....(a) under section 5(2) of the Housing Act 1988 after the coming into force of section 1, and

    ....(b) on the coming to an end of a fixed term tenancy which was entered into before the coming into force of that section,
    . .

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  • JK0
    replied
    Is this a possible concern for tenancies still in the initial 6 months? The guy with the fish tanks moved in 12th September 2018 and paid 6 weeks deposit.

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  • dazwalsh
    replied
    I keep wondering how agents are going to react to this, particulary those who seem to rely on fleecing the tenants and landlords at every changeover and renewal, not to mention the contract fees that they will now be no longer able to charge.

    As far as i can tell deposits are capped at 5 weeks rent, and the only two fees chargeable are change of locks (with proof of purchase, no allowances for labour or inconvenience) and late payment of rent which is capped at 3% above base rate.

    That must cometely wipe out huge chunks of income for agents.

    Are there any landlords here who use agents and have you had any correspondence as to how the agents are going to proceed past june with these new regulations?

    Can i just add i am in complete support of this ban too, just wondering what the fallout will be.



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  • KTC
    replied
    Tenant Fees Bill received Royal Assent today, so is now the Tenant Fees Act 2019.

    Leave a comment:

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