Social housing and supported housing: are the fees you are charging your residents permitted?
The Tenant Fees Act prohibits many fees landlords might charge other than basics like rent, deposit, and utilities. Are all your charges permitted?
The Tenant Fees Act 2019 was brought into law with the intention of conquering unfair charges and practices mainly associated with private rented accommodation.
The Act introduced a concept of "permitted payments" and focuses on ASTs (assured shorthold tenancies) and certain categories of licences. In short if an item a landlord or agent is charging to the resident is not a permitted payment then it is unlawful. The consequences of non-permitted charges include: a refund should be paid to the resident, fines, criminal offences for repeat offenders, and as a further incentive to comply the landlord cannot use a s.21 accelerated process to regain possession of the property while there are any refunds due.
Social housing and supported housing tenancies and certain licences often include payments, which on the face of it would not be 'permitted payments'. For example with supported housing it is common to require the tenant to pay X amount for support services in addition to the usual rent and charges for utilities/maintenance etc. There is an exemption for social housing and supported housing can fall within that exemption.
To be sure that the exemption applies you need to be sure that the accommodation is classified as social housing. There is a definition of social housing in Part 2 of the Housing and Regeneration Act 2008 and many social housing and supported housing providers would be using the "low cost rental" accommodation criteria in section 69. To qualify under these criteria the accommodation must be (in summary):
a) made available for rent,
b) at a rent below market rate, and
c) administered in accordance with rules ensuring it is available to people whose needs are not adequately served by the commercial housing market.
The points some organisations can fall down on are not having sufficient evidence of market rents to demonstrate that the rents are below market rate and not having sufficiently documented and robust "rules" on how the properties are administered.
Providers of social housing and supported housing should consider double checking their rules, procedures and template ASTs and licences to check that the fees they are charging residents are permitted and that they can rely on the social housing exemption.
If you would like to discuss any aspect of this article further, please contact Tim Wrigley or any other member of the Property team on 0113 244 6100.
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The information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors