Permitted Payments for Landlords in England Under the Tenant Fees Act

Permitted Payments Under Schedule 1

The Tenant Fees Act 2019 sets out permitted payment categories in Schedule 1. A payment outside those categories is generally prohibited unless an exception applies. Collecting a prohibited payment exposes you to a civil penalty of up to £5,000, rising to £30,000 for a second offence within five years.

The main categories relevant to a typical letting are:

1. Rent — a fixed sum stated in the tenancy agreement. Under the Renters' Rights Act 2025 (in force from 1 May 2026), the rent must be at or below the asking price published in the advert. No bidding above it, no price ranges, no "offers over."

2. Security deposit — capped at five weeks' rent where the annual rent is below £50,000, or six weeks' rent where it is £50,000 or above. Must be registered in a government-approved tenancy deposit scheme within 30 days.

3. Holding deposit — capped at one week's rent (annual rent ÷ 52). Only one can be held per property at a time. If no tenancy agreement is entered into within 15 days and no written extension is agreed, return it unless a statutory retention ground applies.

4. Specified default fees — interest on late rent and reasonable, evidenced replacement costs for lost keys or other security devices. The detailed limits are below.

5. Payment for a change to the tenancy — a tenant-requested variation, assignment, or novation is capped at £50 including VAT, unless the landlord can evidence reasonable costs above that amount.

6. Payment for early termination — if the tenant asks to end the tenancy early, a landlord's charge cannot exceed the landlord's loss; a letting agent's charge cannot exceed its reasonable costs.

7. Council tax, utilities, TV licensing, and communication services — these are permitted where the tenancy agreement requires the relevant payment. Utility costs cannot be marked up above the amount due for the supply.

The Act also preserves a landlord's separate right to claim damages for a tenant's breach of contract.

What Counts as a Prohibited Payment

Any payment not permitted by Schedule 1 or an applicable exception is generally prohibited. The most common traps for self-managing landlords:

• Referencing and credit check fees — you cannot pass these on to the applicant, even if a third-party referencing agency bills you
• Right to Rent check costs — the landlord bears the cost of identity verification, including any fee charged by an Identity Service Provider (IDSP)
• Inventory or check-out fees — whether you hire a clerk or do it yourself, the tenant cannot be billed
• Professional cleaning — you cannot require a tenant to pay for end-of-tenancy cleaning as a condition of the tenancy
• Pet premiums or pet deposits — the Tenant Fees Act does not permit a separate pet deposit. A landlord cannot require a tenant to buy pet damage insurance, though a tenant may choose to do so.
• Guarantor referencing fees — if you require a guarantor, the referencing cost sits with you

How Default Fees Work

The default fee for late rent is tightly constrained:

• The rent must be 14 days or more overdue before any charge applies
• Interest accrues at 3% above the Bank of England base rate — nothing higher
• The charge must be calculated on the overdue amount only, not the full monthly rent

You cannot charge flat daily or weekly penalties for late payment. A clause in the tenancy agreement imposing a fixed £25-per-day late fee is unenforceable and counts as a prohibited payment term.

For a lost key or security device, you can recover the actual replacement cost — but only if you provide evidence (a receipt or invoice). Quoting a standard £75 lock replacement without a receipt is a prohibited payment.

The Penalty Framework

Trading Standards and local housing authorities enforce the Tenant Fees Act:

• First offence: civil penalty of up to £5,000
• Second offence within five years: criminal offence, or a civil penalty of up to £30,000
• A landlord must repay a prohibited payment when required, but retaining it does not by itself prevent the landlord from serving a Section 8 notice. A tenant can seek repayment through the local authority or First-tier Tribunal.

Keeping an unlawful £200 cleaning fee can trigger enforcement action and a repayment order, even though it does not by itself prevent a Section 8 possession claim.

Keeping Your Payment Record Clean

The simplest protection is a checklist at the start of every tenancy: rent amount, security deposit amount, holding deposit amount, and nothing else collected. If the applicant asks to pay extra — some do, unprompted — you decline and note the refusal in writing.

The Advertising and Choosing Tenants in England guide includes a Payment Sequence Checklist that maps every permitted payment to the exact point in the letting process where it can lawfully be collected, with the statutory caps pre-filled.

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