Letting Agent Fees and Charges: What Is and Is Not Legal

The Tenant Fees Act 2019 dramatically changed what letting agents can charge tenants in England. Despite this, many agents continue to impose hidden charges, often disguised as illegal deposit deductions at the end of a tenancy. Knowing your rights can save you significant money.

What Agents Cannot Charge

Since 1 June 2019, the following fees are banned: administration fees, viewing fees, credit check fees, referencing fees, guarantor fees, inventory fees (charged to tenants), check-out fees (charged to tenants), and renewal fees. According to GOV.UK guidance, any payment demanded from a tenant that is not on the permitted list is a prohibited payment and can be recovered.

Permitted Payments

Agents can only charge for: rent, a refundable tenancy deposit (capped at 5 weeks' rent as defined in your tenancy agreement), a refundable holding deposit (capped at 1 week's rent), payments for early termination of the tenancy (if requested by the tenant), payments for changes to the tenancy (capped at £50 or reasonable costs if higher), and payments for utilities, council tax, and TV licence. Citizens Advice has a comprehensive guide to what counts as a permitted payment.

Hidden Fees Disguised as Deposit Deductions

Some agents try to recover banned fees by deducting them from the deposit at tenancy end. Common examples include: "check-out report fees," "inventory compilation fees," "cleaning management fees," and "administration charges" for processing the deposit return. According to TDS adjudicators, these deductions will not be upheld if they are simply repackaged banned fees.

How to Challenge Unlawful Fees

If you have been charged a prohibited fee, you can report the agent to your local authority trading standards team, who can impose fines of up to £30,000 for repeat offenders. You can also recover the payment through the deposit scheme or county court. Shelter recommends writing to the agent first, citing the Tenant Fees Act 2019, and giving them 14 days to refund the prohibited payment before escalating. This is especially relevant for tenants with pets, who are often targeted with additional banned charges.