Illegal tenant fee?

[chesirecat99]

A question about the Tenant Fees Act 2019 for any lawyers or landlords. I've not come across this before despite having been a landlord for decades and housing advice volunteer.

Can a landlord charge a tenant a fee for breach of contract?

DD's landlord is charging them a £50 admin fee because the professional cleaners they booked failed to finish the end of tenancy clean before the check out inventory after the cleaner injured herself and had to leave. The cleaners were willing to return to complete the job to the landlord's satisfaction but property manager suggested it was "easiest if they booked the landlord's preferred cleaners and deducted the cost from the deposit" as the landlord had builders coming in to work on the property straight after the inventory was done (they actually arrived several hours before but the tenants didn't allow them to start work before the inventory).

Originally, when they were sent the deductions, a "flat rate adminstration fee of £50" for booking the cleaner (that was much more expensive than the cleaners they booked, of course) had been added too. The admin fee is from the landlord's company who deal with all the property management/maintenance, not a letting agent. However, landlord claims they are not a property management company, they are an "asset management company" 🙄The flat (and all 9 flats in the building) are owned by the landlord personally, NOT the landlord's company, if that makes a difference ie he employs his company to look after his flats.

When they queried whether this was a permitted fee under the Tenant Fees Act 2019, they were told that it was not actually an admin fee (which isn't permitted), it was a fee for breach of contract (which is permitted according to the landlord) and changed the wording to this:

"Admin Charge (this charge covers fees for breach of contract: for arranging cleaning following your failure to clean your flat as per section 1.48 of contract) £50"

My interpretation of the act is that the landlord can only charge for losses as a result of breach of contract, not a "fee for breach of contract" and this is not permitted. Any thoughts?

I thought the legislation was more about outlawing pre-tenancy fees and charges for contract renewals etc rather than deposit related deductions. Those are covered by the deposit scheme regulations.

The act covers contractual damages too, LIZS.

From the guidance:

The ban does not prevent landlords and agents from recovering damages for breach of contract. A landlord or agent is entitled to recover the costs to put them back in the position they would have been had a tenant carried out all the obligations in their contract (e.g. returning the house in the same condition as which it was found while allowing for fair wear and tear).

However, claims for damages which are aimed at deterring a breach of contract or punishing the party in breach are generally not enforceable. Terms which require a consumer to pay a disproportionately high sum to the trader in compensation for failing to fulfil their obligations under a contract are also considered unfair terms and unlawful under the Consumer Rights Act 2015.

Landlords and agents cannot write terms into the tenancy agreement that require a payment as a penalty should a tenant fail to perform an obligation. For example, any clause that says ‘if you fail to do x then you must pay y’ even if the amount is not specified is likely to be prohibited. Any claims for damages must be based in evidence and are only permitted where you have incurred costs/actual loss as a result of the contractual breach (unless this is for a default fee for a late payment of rent or lost key/security device which is required under the tenancy agreement).