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Tenancy Agreement Charges

Tenancy Agreement Charges: Understanding the Fees Involved

When renting a property, tenants are often required to sign a tenancy agreement. A tenancy agreement is a legally binding contract between the tenant and the landlord, outlining the terms and conditions of the tenancy. However, in addition to the rent and security deposit, tenants may also be charged for tenancy agreement fees. In this article, we will explore what these charges are, what they cover, and how to understand them.

What Are Tenancy Agreement Charges?

Tenancy agreement charges, also referred to as administrative or contract fees, are fees charged by landlords or letting agents for preparing, amending, or renewing a tenancy agreement. These fees are separate from rent and security deposits and are typically paid by the tenant.

What Do These Charges Cover?

The exact charges, as well as what they cover, vary depending on the landlord or letting agent. However, some of the most common costs included in tenancy agreement charges are:

1. Tenancy agreement preparation fee: This fee covers the cost of drawing up the tenancy agreement.

2. Tenancy renewal fee: This fee covers the cost of renewing the tenancy agreement when it expires.

3. Tenancy amendment fee: This fee covers the cost of making changes to the tenancy agreement during the tenancy period.

4. Check-out fee: This fee covers the cost of the final property inspection at the end of the tenancy, ensuring that the property is returned in a satisfactory condition.

5. Reference checks fee: This fee covers the cost of checking the tenant`s references, such as their employment or previous tenancy.

How Much Can Tenancy Agreement Charges Cost?

Again, the exact cost of tenancy agreement charges varies depending on the landlord or letting agent. However, according to UK government guidelines, since 1st June 2019, landlords and agents are not allowed to charge fees to tenants unless they are listed in the Tenant Fees Act 2019. Charges for changes to agreements, early terminations or other requests made by the tenant are also capped under the new laws and must be reasonable.

It is important to note that some letting agents charge fees on top of the landlord`s fees. Therefore, before signing a tenancy agreement, it is crucial to thoroughly read and understand what the fees are and how much they will cost.

How Can Tenants Understand Tenancy Agreement Charges?

Tenants can avoid any confusion and misunderstanding about the tenancy agreement charges by:

1. Reading and understanding the tenancy agreement before signing it.

2. Asking the landlord or letting agent to explain any charges that are unclear.

3. Researching the average costs of these charges in their area to ensure they are not being overcharged.

4. Negotiating the charges which seem unfair or high.

In conclusion, tenancy agreement fees are a common part of renting a property. Understanding what these fees are and what they cover can help tenants make informed decisions when choosing a rental property. By reading and understanding their tenancy agreement and communicating with their landlord or letting agent, tenants can ensure they are not overcharged and avoid any surprises.

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