Navigating the rental market can be stressful, and some landlords may attempt to impose additional fees on tenants. However, it’s important to know that many of these charges are not only unfair but also unlawful. Understanding which fees landlords can and cannot charge under the Residential Tenancies Act helps tenants protect their rights and avoid unnecessary costs. In this article, we’ll explore key money and other prohibited fees to ensure you’re fully informed as a tenant.
What Is Key Money?
Key money refers to any payment a landlord asks for outside of the agreed rent and bond. These additional charges are illegal under the Residential Tenancies Act, as they effectively place extra financial pressure on tenants. Examples of key money requests include payments to secure a tenancy or extend a lease. Tenants should be aware that landlords are not permitted to ask for such payments, and any request for key money can lead to fines and penalties for the landlord.
Hidden Administrative and Advertising Charges
Landlords may sometimes attempt to disguise key money by calling it something else, such as an administrative or advertising fee. While these fees might appear legitimate, they are often just another form of key money, which is prohibited under the Residential Tenancies Act. For example, a landlord might ask for extra money to cover the cost of advertising the property on listing websites, or they may charge an administration fee at the start of the tenancy. These types of fees are not legal, and tenants should be aware that they can request a refund if charged.
In several Tenancy Tribunal cases, tenants have successfully challenged these fees, proving that they were unlawful attempts to charge key money under different names.
Credit Check Fees and Other Hidden Costs
In addition to administrative and advertising fees, some landlords might attempt to charge tenants for credit checks, background checks, or tenancy-related equipment like appliances or lawnmowers. These extra charges are also illegal under the Residential Tenancies Act. The law makes it clear that any additional fees outside of rent and bond, such as these, cannot be passed onto the tenant.
Tenants should be cautious of landlords who ask for payments that seem unrelated to rent or bond. If a landlord insists on charging for these services, tenants can challenge the fees through the Tenancy Tribunal and seek reimbursement.
Permissible Payments: The Option Fee
While most additional fees are illegal, there is an exception known as the option fee. This allows a landlord to hold a property for a potential tenant while they decide whether to rent it. However, the option fee must not exceed one week’s rent, and if the tenant agrees to take the property, the fee must be either refunded or credited towards the rent. It is important to note that landlords cannot retain this fee if the tenant decides not to rent the property, as it cannot be used as a hidden form of key money.
Understanding the rules around option fees ensures that tenants are not misled into paying unlawful charges.
No More Letting Fees
Prior to 2018, tenants were often required to pay letting fees, usually equal to one week’s rent, to cover the services of a letting agent or property manager. However, changes to the Residential Tenancies Act have made it illegal for landlords or agents to charge tenants letting fees. Now, landlords must cover the cost of any fees charged by their letting agents or property managers.
Despite this, some landlords might still try to include these fees in tenancy agreements or rental listings. Tenants should be aware of their rights and refuse to pay any letting fees, as they are not legally required to do so.
Legal and Solicitor Costs
Landlords may sometimes incur legal fees, particularly when drawing up tenancy agreements or dealing with tenancy disputes. However, tenants are not required to cover these costs. Any legal or solicitor fees incurred by the landlord remain the landlord’s responsibility under the Residential Tenancies Act.
If a landlord attempts to pass on these legal fees to the tenant, whether at the start of a tenancy or during its term, it is an unlawful charge. Tenants should be aware of this and can seek assistance from the Tenancy Tribunal to recover any payments that were unfairly imposed.
Conclusion
Understanding your rights as a tenant is crucial to avoiding unlawful charges. From key money and disguised administrative fees to credit check costs and solicitor fees, there are strict rules in place to protect tenants from these additional financial burdens. By staying informed and knowing what payments are legal, tenants can prevent landlords from imposing extra costs and, if necessary, seek compensation through the Tenancy Tribunal. Protect yourself by being aware of these prohibited charges and always question any unexpected fees.
