Reading the Small Print Before You Sign: What a Lawful Letting Agent Fee Schedule Should Look Like

Most landlords and tenants assume the abolition of tenant fees in 2019 ended the era of opaque letting agent charges. In practice, the legislation simply moved the game. Charges that can no longer be levied against tenants have a habit of reappearing in landlord-facing contracts, renewal letters and 'administration' line items that never quite match the original quotation. The paper trail is where the truth lives — and it is worth reading every page.

The Statutory Framework in Brief

The Tenant Fees Act 2019 bans most payments to letting agents and landlords from tenants, other than a closed list of permitted payments. These include rent, a refundable holding deposit capped at one week's rent, a refundable tenancy deposit capped at five weeks' rent (six weeks where annual rent exceeds £50,000), and a handful of narrowly defined items such as default charges for late payment or a lost key.

Crucially, any payment outside the permitted list is unlawful — not merely unfair. Agents who breach the rules face fines of up to £5,000 for a first offence and £30,000 for repeat breaches, alongside potential banning orders.

What a Compliant Fee Schedule Looks Like

A properly drafted fee schedule is a model of brevity. It should:

• List every charge in pounds sterling, with no vague descriptors such as 'admin', 'processing' or 'file setup'
• Distinguish clearly between charges payable by the landlord and those payable by the tenant
• State the VAT position explicitly, as VAT-inclusive
• Reference the specific permitted payment relied upon, where a tenant-facing charge is involved
• Be published on the agent's website and premises in accordance with the transparency requirements

If an agent cannot produce a single, coherent fee schedule on request, treat that as diagnostic. Well-run firms hold this document ready.

Red-Flag Paperwork

Certain documents should prompt a closer reading before signature:

1. The tenancy agreement itself. Some agents insert clauses obliging tenants to fund 'compliance costs', inventory charges or contractor call-out fees. Under the Act, these are unenforceable regardless of how clearly they are drafted.
2. Renewal letters. 'Contract renewal' fees charged to tenants are prohibited. Landlords, by contrast, can lawfully be charged — so check whether a tenant has been asked to contribute.
3. Check-out and dilapidations correspondence. Charges for professional cleaning or end-of-tenancy 'administration' fall outside the permitted list. A dilapidations letter is not a vehicle for recovering prohibited fees.
4. Third-party referrals. Where an agent receives a commission for recommending an insurance product or inventory clerk, that arrangement must be disclosed in writing. Ask for the disclosure document.
5. Holding deposit terms. The paperwork should set out the limited circumstances in which the deposit may be retained, including the 15-day deadline for agreement signing.

A Landlord's Checklist Before Instruction

Landlords bear the commercial burden of agent income post-2019, so the landlord-side contract deserves equal scrutiny:

• Is the commission rate fixed, and for what term does it bind you — including after the tenancy ends?
• Are renewal commissions charged automatically?
• Are 'additional services' such as compliance renewals itemised, or bundled into an open-ended retainer?
• Does the agreement comply with the client money protection scheme requirements, and is the certificate available?
• Is the agent a member of a redress scheme — The Property Ombudsman or Property Redress Association — as required?

Questions to Ask in Writing

Where anything is unclear, put the question in writing and keep the reply. Useful prompts include: which permitted payment does this charge correspond to; is this fee chargeable to the tenant under the Act; and will the fee schedule provided at quotation be the version applied at renewal? A written answer is worth far more than a verbal assurance when a dispute later arises.

The Bottom Line

The Tenant Fees Act 2019 did not eliminate charges; it redistributed them and, in doing so, made documentation the primary consumer safeguard. Tenants should refuse any payment not on the permitted list and report breaches to Trading Standards via Citizens Advice. Landlords should treat the fee schedule, the agency agreement and the compliance file as a single package to be reviewed together — because an agent who is loose with one document is rarely rigorous with the others.