A NEW deposit calculator has been launched to help tenants check if they’re being ripped of by rogue letting agents after the Tenant Fees Act comes into force next month.
From June 1, landlords and letting agents will be capped at charging up to five week’s worth of rent for the deposit for properties where the annual rent is less than £50,000 or £4,167 a month.
Getty – Contributor Landlords will be limited to how much they can charge tenants for a deposit
Current rules mean that landlords can charge tenants unlimited amounts for a deposit, although it’s typically six weeks rent.
But tenants paying the UK average rent of £942 a month, according to HomeLet, face forking out around £1,304.31 just for the down payment.
Deposits protect landlords from any financial losses if property is damaged during the tenancy as they can claim a chunk when tenants leave if they feel the terms of the contract have been broken.
But another problem is that renters don’t get it back until they leave the property which leaves people struggling to find a second lump sum of money to secure a new home.
TDS The calculator automatically works out the maximum deposit tenants can be charged
After the ban, the upfront cost for a tenant who pays the average rent will be reduced to £1,086.92 for a deposit.
The Tenancy Deposit Scheme (TDS), which protects the lump sum during the tenancy, has now launched a calculator to help make sure that agents charge the correct amount once the cap comes in.
It’s free to use and can be found on its website here. All you need to do is type in how much rent you pay every month and hit enter.
It will then automatically tell you how much rent you’re charged per week and what the maximum deposit will be.
Ban on letting agent feesTHE Tenant Fees Bill bans letting fees paid by tenants in the private rented sector.Housing charity Shelter says tenants shell out an average of £272 in fees, so this will save people a pretty penny.
But experts have warned that renters could still be open to being charged “default fees” – such as when they lose their key or breach their contract.
Under the rules, agents and landlords will still be allowed tenants fees associated with:
a change or early termination of a tenancy requested by the tenant – but this will be capped at £50 unless the landlord or agent can demonstrate that greater costs were incurred
utilities, communication services and council tax
payments arising from a default by the tenant, such as replacing a lost key.
Landlords and estate agents will also only be able to recover “reasonable costs”.
For example, they won’t be able to charge tenants hundreds of pounds for a damaged item that actually only costs a few pounds to replace.
Letting agents will still be able to charge deposits for up to six week’s worth of rent if the annual rent is more than £50,000.
Rebecca Johnston, managing director of TDS Custodial, said: “There is still confusion in the market about how, exactly, it [the Tenant Fees Act] will affect people.
“One of the most common issues we’re seeing among landlords and letting agents is how the five weeks’ rent could be miscalculated, meaning some could inadvertently be caught on the wrong side of the law come June. It’s not simply a case of one and a quarter months’ rent.
“That’s why we’ve created our Deposit Cap Calculator to take the confusion out of the process.”
Agents and landlords caught charging more than the cap will be slapped with a £5,000 fine, which could increase to up to £30,000 if the case is dealt with in court.
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But some experts believe renters will still have to pay out up to £2,500 upfront deposits even after the ban comes in thanks to the rising cost of rent in England.
The Tenant Fee Act will also stop letting and estate agents charging renters around £432 when taking on a new agreement – one letting agency even charged tenants £300 to view a property.
But some experts warn that it could push up rents by £100 a year.
Tenant ‘trashed three-bedroom house and caused £7k worth of damage’
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