Tenant Fees Act / Tenant Fee Ban - background & how Reapit can help

From the above dates onward, you can no longer request that a tenant, or anyone acting on their behalf (e.g. a guarantor), makes payments in connection with a tenancy.

The following list outlines payments which are permitted:

1. Rent
2. A refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
3. A refundable holding deposit capped at no more than one week’s rent (see next section)
4. Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
5. Payments associated with early termination of the tenancy, when requested by the tenant
6. Payments in respect of utilities, TV licence and council tax
7. A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement

A maximum of 1 week's rent can be taken as a holding deposit for a maximum of 15 days, beginning on the day that the holding deposit was received by the agent or landlord. Not all agents may take a holding deposit, however this is the maximum permitted, regardless of the annual rent amount.

The holding deposit must be repaid to the tenant within 7 days if:

1. the landlord decides not to enter into an agreement within that 15 day period
2. the landlord and tenant fail to enter into an agreement within that 15 day period
3. a tenancy agreement is entered into by the landlord and tenant.
   In this scenario, it is unlikely that the holding deposit will be repaid, as this amount can be used to put towards the first rent payment or security deposit.

There are a number of scenarios whereby the holding deposit can be forfeited such as:

1. the tenant makes false or misleading statements
2. the tenant fails Right to rent checks
3. the landlord and tenant can agree to extend the 15 day period – but this must be agreed in writing.

Where a tenancy renews after 1st June 2019, the agent or landlord will need to return any excess deposit beyond the 5 or 6 week entitlement. This deposit amount retained will be based on the agreed renewal rent, not the original rent.

If the tenancy is continuing or is a statutory periodic agreement, then the tenant will be bound by the terms of that contract until it is either renewed or terminated. In this scenario, the agent is not obliged to immediately refund part of the tenancy deposit.

• From Lettings, Reporting and Analysis menu, click Query Transactions
  

• Dates: set to the last 15 days
  
  

• Unallocated: set to £0.01
  
  This will then report on every holding deposit which remains unallocated, setting this as 1p will take into account those which have been moved to a deposit or a rent during that period
  
  

• Click Report
  
  

• The report results need to be filtered to show only the holding deposit:
  click to the right of the Description grid heading, type holding and press enter
  
  
  

• Just the holding fee transactions will be displayed
  The Date shown is the Bank statement date (Tenant Payment Received Date)
  

• From the Tenancy record, right-click Record Receipt and select Tenant Repayments

• The Tenant Refunds screen is displayed, select and click Post

• From the Tenancy screen, click Raise Initial Invoice (bottom right)
  
  
  
• Select and click Create Postings
  
• Once both charges (deposit & first month rent) have been created, the holding fee will be seen as a credit
  
• Allocate the holding deposit (payment) as normal
  The tenant can request this to be allocated to the rent or deposit, or they can request it back, RPS does not auto allocate the holding fee

• Refer to the section titled: Returning the holding deposit
  

• From Tenancy Transactions, right-click the holding fee and select Assign receipt to other party 
  This option may require accounts access permissions to be changed
  

On creation of a new tenancy, if the deposit exceeds the amount permitted for an Assured Shorthold tenancy, a message will be displayed.

This message will be prompted based on either scenario below:

• 5 weeks rent where annual rent amount is below £50,000 a year
• 6 weeks rent where annual rent amount is above £50,000 a year

On completion of a tenancy renewal, if the current deposit held exceeds the permitted amount, a message will be displayed to advise on this.

In the Unallocated Tenant Receipts screen, a new column has been added (Earliest) that displays the bank statement date. This field can be used to filter between a date range.