Make sure to remove these ‘unforgotten’ clauses from your contracts.
It is almost standard practice for landlords and letting agents to recycle contractual templates tenant to tenant, year on year. By recycling your contracts you are putting yourself at risk: you will not be adequately protected if your contracts are not up to date with the law. Crucially, it is not just what might be missing from your contractual templates, but what you have forgotten to take out. By simply changing the details and dates of contracts, it is highly probable that you have forgotten to take out some of these key clauses that may be illegal. Having these ‘forgotten’ terms in your contract could set you back £5,000 in penalties and any further breaches within five years of the first could result in criminal conviction, bans or further fines. Audit your contracts for these key clauses:
- Cleaning Fees
Following the Tenant Fees Act 2019, landlords cannot ask tenants to have their properties professionally cleaned.
Tenants must return the property in the same conditions as when the let began, minus general wear and tear. You can produce an inventory of the property describing the professional standard to which it is clean that the tenant must sign. If the property is not to this standard on post-tenancy inspection you can then attempt to cover the costs by deducting these from the tenant’s deposit.
- Deposit caps
The Tenant Fees Act 2019 also had something to say about deposits: they are now generally capped at the equivalent of 5-weeks’ rent. This affects all new tenancies and any existing tenancies which have been renewed since the enforcement of the Act.
Holding deposits have now also been capped to one week’s rent and they must be returned to the tenant, perhaps by way of reduction from their first rent payment.
- Late and Renewal Fees
Landlords are now also limited in their ability to charge the tenant fees when their rent is in arrears. Following the Tenant Fees Act 2019, late fees have been capped at 3% per annum, plus the Bank of England’s rate.
Landlords are now also prohibited from charging tenants renewal fees following the 2019 Act.
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Which contracts do these penalties apply to?
Whilst these penalties do not apply to tenancies created before the commencement of the Act, it is likely that your renewals this year and last year will be captured by it. If you are still using the same contract you might run into trouble. These are only a selection of developments that have occurred in the last 2 years meaning if you aren't updating your contracts annually, you might be affected by these ‘forgotten’ clauses.
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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.