Tenant Fees Act 2019: Permitted Payments and Caps

Under the Tenant Fees Act 2019, landlords in England can only charge tenants specific permitted payments. These include rent, a capped holding deposit, a capped tenancy deposit, and certain default fees. You cannot take any rent before signing the tenancy agreement. Once signed, you may ask for up to one month of rent in advance. If you ask for a payment that falls outside these rules, it is a prohibited payment. You end up with a clear framework of what to collect, keeping payment records straightforward.

What payments does the Tenant Fees Act permit?

The Tenant Fees Act 2019 guidance for tenants restricts what a landlord may ask a tenant to pay. Any charge not explicitly permitted by the rules is a prohibited payment. You may charge rent, a refundable holding deposit to reserve a property, and a refundable tenancy deposit to cover possible damages. You can also pass on costs for utilities, broadband, and council tax if your tenancy agreement lists them. If a tenant asks to change the tenancy, you can charge a specific fee for the amendment. You can also charge a default fee for late rent or replacing a lost key. Keep an exact record of every payment requested and received. IziRento lets you keep leases, payments, and documents in one place to maintain this record. Always check the current rule on the official site for any updates. Many landlords fail to realise that charging for reference checks or inventory services is no longer allowed. The rent must not be more than the advertised amount. You must clearly explain to the tenant what is included when agreeing to rent the property. The rent usually stays in line with other similar properties in the local area. By documenting your permitted fees in the initial contract, you avoid misunderstandings later.

How much deposit can I take and what are the caps?

You can take a holding deposit to reserve the property and a tenancy deposit to cover possible damage. The holding deposit is capped at exactly one week of rent. You calculate this by dividing the annual rent by fifty-two. The maximum tenancy deposit depends on the annual rent amount. If the yearly rent is under £50,000, you cap the deposit at five weeks of rent. For an annual rent between £50,000 and £100,000, the cap is six weeks of rent. You usually protect the tenancy deposit in a government-approved scheme. Read the official guidance on Tenancy deposit protection to see the exact steps. Do not mix holding deposits and tenancy deposits in your ledger. A detailed guide to inventories, check-in and check-out reports helps justify any deductions at the end of the tenancy. The tenancy deposit covers things like unpaid rent or damage beyond normal wear and tear. You return the tenancy deposit when the tenant moves out, provided they meet the terms of the agreement. If you make deductions, you provide evidence from your check-out report. Tenants can challenge deductions through the deposit protection scheme dispute resolution service. You keep a precise log of the deposit receipt and the certificate of protection.

What are the holding deposit deadlines and rules?

You have a 15-day deadline to reach an agreement after receiving a holding deposit. This period is the deadline for agreement, unless you and the tenant agree in writing to a different timeline. If you decide not to rent the property to the tenant, you make a decision and return the money within 7 days. If you keep the holding deposit because the tenant provided false information or backed out, you send the tenant your reasons in writing within 7 days. You can apply the holding deposit towards the first month of rent or the tenancy deposit if the tenant agrees. Check the Tenant Fees Act 2019 Schedule 1 for the exact phrasing of the rules. Keeping exact dates of receipts and written decisions prevents disputes. A tenant usually gets their holding deposit back if the landlord decides to withdraw the property. You also return it if you fail to take reasonable steps to enter into the tenancy before the deadline. If the tenant fails a Right to Rent check, you might be able to retain the deposit, but you still provide the written explanation within 7 days. The tenant must reply to requests for information and documents. If they ignore your requests, you note this in your communications log. Clear communication during the referencing stage helps you manage this 15-day window effectively.

When can I ask for rent in advance?

You ask for rent in advance only after the tenancy agreement is signed. The rules prohibit taking rent payments before signing the contract. Once signed, you request a maximum of one month of rent before the tenancy start date. After this initial payment, the rent falls due on the regular schedule set out in your agreement, usually monthly or weekly. You document the exact date and amount of this advance payment. For more context, see our guide on What Rent You Can Take Before Move-In — After the Agreement Is Signed. Ensure your invoice clearly states the period the advance rent covers. Sometimes a tenant offers to pay six months in advance to secure a property. You accept this only if it forms part of the regular rent schedule in the contract, rather than an arbitrary upfront fee. The rent in advance is simply the first instalment of the rent owed. You issue a receipt for the rent in advance to distinguish it from the tenancy deposit. Keep the rent payment distinct from the holding deposit in your bank records. You provide the tenant with your bank details and the exact due date for the advance rent. A clear paper trail shows exactly what the tenant paid and when.

What default fees and utility charges are permitted?

You charge default fees for late rent or lost keys if you include these terms in the tenancy agreement. The amount for a lost key or security device reflects the actual cost of replacement. You may also charge for utilities like gas, electricity, and water, as long as the tenancy agreement states the tenant is responsible. If bills are included in the rent, they must reflect the actual costs. Landlords often use the Fees you can charge as part of a tenancy page to verify default fee limits. If a tenant asks for a repair, document the issue rather than charging a fee; you can review How to Manage Tenant Repair Requests Without Losing Them in Chat to organise this process. To handle keys smoothly, follow the steps in How to Record Keys and Fobs Handed to a Tenant So Check-Out Can Reconcile. Late rent fees apply only if the rent is more than 14 days overdue. The fee is usually capped at 3% above the Bank of England base rate. You cannot charge arbitrary administrative fees for writing a letter about rent arrears. You can also require the tenant to pay for communication services like broadband and landline phones. Council tax is another permitted payment, usually paid directly by the tenant to the local authority. Landlords also follow the Electrical safety standards in the private and social rented sectors when maintaining the property.

What do I do next?

Review your current tenancy agreement and remove any clauses that ask for prohibited payments. Calculate your deposit caps based on the annual rent you intend to charge. Set up a clear ledger to record every payment received, marking whether it is rent, a holding deposit, or a default fee. IziRento helps you store your payment logs, property documents, and leases in one workspace, keeping your administration simple. Use the interactive deadline calculator placed under the text of the article to find exact due dates for holding deposit agreements and written decisions. Check the official Housing - Citizens Advice pages to stay informed on current practices. Send the draft tenancy agreement to the prospective tenant so they can review the permitted payments before paying the holding deposit. Confirm the tenant understands the rent schedule, the deposit amounts, and the conditions under which you might retain the holding deposit. Gather the required property compliance certificates to serve to the tenant before they move in. Keep a copy of the receipt for every deposit and advance rent payment. Update your internal checklists to reflect the 15-day agreement deadline and the 7-day return rule.

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