A loophole in the Tenant Fees Act has been tightly closed after a letting agent was ordered to pay back £343 to a tenant because it could not prove the charge for moving in his replacement was out of the ordinary.
The First Tier Property Tribunal heard that Ludlow Thompson had taken £393 from Mr Brennan, the tenant of a shared house in Leighfield House, Hackney, after he left the property, to provide a new tenancy agreement naming the new tenant.
Mr Brennan claimed it was a prohibited payment under the Act – and the court agreed.
The agent told Mr Brennan that the costs included issuing replacement guidelines to the landlord and tenants, negotiating certain matters with the landlord, collecting rent and the deposit from the new tenant and providing advice and assistance on the return of the tenant’s deposit.
The court ruled: “At no point has it made a case for this transaction being anything other than an ordinary, run of the mill example of tenant churn in shared rented housing.”
It said that to exceed the £50 upper limit under the Tenant Fees Act, “a landlord or letting must be able to point to something that makes the charge at least somewhat out of the ordinary run of similar transactions”.
Sean Hooker, head of redress at the Property Redress Scheme, says the case will set a precedent and help to clarify the situation for redress schemes in future disputes.
He tells LandlordZONE: “How can you demonstrate time and effort if it’s a fairly straightforward change of details? Everything has a cost but how much cost is involved in changing a name on a tenancy agreement and issuing paperwork?”
Read more about the tenant fees ban rules.
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