Tenant Fee Ban on inclusive rent

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Tenant Fee Ban on inclusive rent

    In light of the forthcoming TFB I have identified an issue which means I may he forced to slightly adjust my business model as well ad inconveniencing the tenant.
    For many years I have charged an inclusive rent which included

    TV licence
    Council Tax
    G/E
    Water
    Basic broadband

    To cover these utilities I have always charged an extra £300 which just about covers things especially G/E which increases and reduces throughout the year.

    Everything roughly evens out such there is little suplus once all the bilks have bern paid.
    I was just reading a NLA blog which advised that the TFB will now ban sich inclusive rents unless thr payments equal actual usage.
    Well as DD is used to pay G/E and is an average to cope with reductions and increases in usage because of the seasons it would be impossible for me to take an exact amount on a monthly basis.

    It seems that I may havr to advise the tenant that ALL utilities will need to be in their name and of course the rent I receive will be reduced by £300 as the tenant will now be responsible for everything.
    Now my tenants are perfectly content with the way the inclusive rent process has bero operating for years.
    They have no inclination to wish to take over everything themselves.
    They prefer me to manage everything and they just pay one rent amoubt and everything is covered.
    With this TFB if I continue from June 1st this year potentially that inclusive rent which never exactly reglects usage in a particular month could potentially mean I am in breach of the TFA and could br fined up to £30000!!!!!!!
    if this is the case then I am going to have to advise the tenant that I can no longer offer an inclusive rent.
    i know the tenants won't be happy.
    But what choice do I have.
    I wonder if this situation only applies for tenancies after June 1st.
    But I am simply NOT sure.
    What does the team think!?

    #2
    Get a new keyboard ;-)
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      A landlord hasn't been able to make a profit from utilities for years, that's not a change.
      That doesn't apply to council tax, broadband or TV licence.

      The liability for council tax and TV licence are set by legislation, and if you're not the person who is liable to pay them the tenant is risking a fine (or prison) because these things have to be in the right name, regardless of payment.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        The issue of the tenant fees ban in relation to inclusive rents is not one that I had fully registered and I can see that this will cause problems in the student housing market. Leaving aside the issues of resale of gas and electricity and council tax liability for the moment, it was certainly the case in the area where I was a student landlord a few years ago that the tenants didn't want to be bothered with utility contracts and arguing amongst themselves over splits. Landlords too were concerned that a failure of one tenant to pay in a shared house could have significant repurcusions for the other tenants and the property. In the past landlords could set the rent at whatever figure they could agree with the tenants and simply not charge for utilities and broadband/media packages, thus circumventing resale issues. Although the new Act doesn't restrict rent levels, I assume that if this included such costs in future, a tenant could subsequently bring a case against a landlord that a portion of their rent was in fact a prohibited fee?

        Comment


          #5
          Utility bills (including broadband/phone) aren't prohibited fees.
          The landlord can't charge more for them than they cost (already the case with utilities).

          Council tax could never be paid by the landlord if the tenant was liable for it (well they probably could in practice, but it'd require a heck of a fudge).
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Originally posted by jpkeates View Post
            Council tax could never be paid by the landlord if the tenant was liable for it (well they probably could in practice, but it'd require a heck of a fudge).
            As long as someone pays it, the council probably don't care who. Just that they will chase who is actually liable in law if payment stops, whatever the tenancy agreement may say who is going to pay.

            It's possible to pay for someone else's TV licence. The online TV licensing website offer such an option even for payment by instalments.
            I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

            I do not answer questions through private messages which should be posted publicly on the forum.

            Comment


              #7
              Originally posted by KTC View Post
              As long as someone pays it, the council probably don't care who. Just that they will chase who is actually liable in law if payment stops, whatever the tenancy agreement may say who is going to pay.
              I agree that the council don't care who pays it, but in practice it means not telling the council that the tenant has moved in, which is a bit naughty in itself.

              Interesting about TV licences as well. Haven't been to the site since I last moved, so I'm clearly out of touch.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by jpkeates View Post
                Utility bills (including broadband/phone) aren't prohibited fees.
                The landlord can't charge more for them than they cost (already the case with utilities).

                Council tax could never be paid by the landlord if the tenant was liable for it (well they probably could in practice, but it'd require a heck of a fudge).
                Yes I agree it is possible for the landlord to charge the actual costs for utilities, although in practice landlords may have to ask tenants for the money when the bill arrives, which could even be after the tenancy ends. Not something I'd be happy to do. Students are usually exempt from Council Tax anyway so it wouldn't be an issue in this case, but in a non-student HMO with room only tenancies the landord would be responsible for the CT. Not sure how they would recover this from the tenants without risking a claim for an unauthorised fee?

                Comment


                  #9
                  The government advice says that council tax isn't a prohibited fee, but I've got to be honest, I can't find that in the legislation (just had a quick scan though - happy to be corrected).

                  The landlord can estimate the cost of utilities and return any overcharge (because usage is uneven throughout the year, that's probably the only way of doing it for utilities) if the idea is to charge the tenants the same each month.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    http://www.legislation.gov.uk/ukpga/2019/4/schedule/1

                    "A payment to a billing authority in respect of council tax is a permitted payment."
                    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                    I do not answer questions through private messages which should be posted publicly on the forum.

                    Comment


                      #11
                      I have a student house for which I provide Broadband and gardening: Students like Broadband operating from day one, it's fast etc etc . And forget about expecting students to pay for gardening: Done it for years, quite common with my agent who has 10's of similar properties. The rent is probably typical for similar student properties with or without BB or gardening.

                      I've just read the guidance....
                      https://assets.publishing.service.go...ordsAgents.pdf

                      - and can't see if I'm doing anything wrong: Anyone got any advice or source of info saying I'm not allowed to provide these services ??

                      Regards & thanks in advance....
                      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                      Comment


                        #12
                        The only thing I have had quoted at me when I have asked such questions, artful, is Under the ban, you cannot require a tenant to pay for the services of a third party.

                        So your gardener could fall under that! I would suspect they would, as the FAQs specifially mention a chimney sweep, and I know all handymen services care also going to be affected.

                        It's poorly written there, and I know there is a set of London lawyers challenging a specific part of it. If I could find the article I might be able to find an update....

                        Comment


                          #13
                          There's two considerations. First, is the payment required to be made by the tenancy agreement. If it's (truly) optional, then it's fine if the tenant agrees to it. Then secondly, what is a permitted payment for those that are required.

                          theartfullodger, payment for internet is allowed under "communication services" in para. 11 of the Schedule I linked to earlier, so that can be a required payment.

                          For the gardening, only if it's an option the tenant chooses. So, "you have to return the garden clean and tidy at the end of the tenancy. You can do it yourself, or pay me/my contractor £XYZ to do it for you".
                          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                          I do not answer questions through private messages which should be posted publicly on the forum.

                          Comment


                            #14
                            Originally posted by KTC View Post
                            http://www.legislation.gov.uk/ukpga/2019/4/schedule/1

                            "A payment to a billing authority in respect of council tax is a permitted payment."
                            Thanks, that's helpful.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment


                              #15
                              Originally posted by KTC View Post
                              There's two considerations. First, is the payment required to be made by the tenancy agreement. If it's (truly) optional, then it's fine if the tenant agrees to it. Then secondly, what is a permitted payment for those that are required.

                              theartfullodger, payment for internet is allowed under "communication services" in para. 11 of the Schedule I linked to earlier, so that can be a required payment.

                              For the gardening, only if it's an option the tenant chooses. So, "you have to return the garden clean and tidy at the end of the tenancy. You can do it yourself, or pay me/my contractor £XYZ to do it for you".
                              Thanks very much, very helpful!
                              I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                              Comment

                              Latest Activity

                              Collapse

                              Working...
                              X