Tenant Fees Bill

Debate between James Cartlidge and Rishi Sunak

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 5th September 2018 Commons Chamber

[Rishi Sunak]

My right hon. Friend is absolutely right. The abuse that the right hon. Member for Birkenhead highlights is exactly why we are all here today to discuss this important subject.

I will return to the topic of default fees. The Bill as drafted already partly mitigates the risk of such abuse by limiting default fees to the landlord’s loss and permitting such fees only if they are expressly set out in the tenancy agreement, which the tenant will obviously have sight of before agreeing to the tenancy. But we acknowledge that more can be done, which is why the Government have tabled a series of amendments to tighten the default fee provision.

As I have said, amendments 5 and 6 will ensure that landlords and agents cannot charge fees to the tenant in the event of default, except under those circumstances set out under paragraph 4 of schedule 1. Secondly, amendment 27 will extend the limitation on what can be charged to incorporate the agent’s costs. We want to ensure that an agent cannot bill a landlord a significant amount only for that to be passed on to the tenant as the landlord’s incurred costs.

Thirdly—and similarly to amendment 3, which was tabled by the hon. Member for Great Grimsby—we introducing a provision to specify that any fees charged must be reasonable in respect of the works undertaken, rather than simply tied to actual loss or costs incurred. This will ensure that landlords and agents cannot make claims for charges that exceed the reasonable commercial value of goods or services.

[James Cartlidge (South Suffolk) (Con)]

Will my hon. Friend clarify how this would affect fees charged at the end of a tenancy, such as cleaning fees, which we know people will be expected to pay, although they may not have been aware of them at the start of the contract?

[Rishi Sunak]

I am happy to tell my hon. Friend that the fees he mentions are specifically banned under this piece of legislation. The Bill has been drafted tightly to ban all fees in connection with a tenancy. It is specifically drafted to capture fees such as the ones he raises, so those fees will no longer be in place once the Bill is enacted.