Tenant Fees Act 2019: Prohibited Payments and the Deposit Cap Explained

What the Tenant Fees Act Changed

The Tenant Fees Act 2019 banned most fees that landlords and letting agents could previously charge tenants in England. Before the Act, it was common to charge application fees, referencing fees, credit check fees, inventory fees, and renewal fees. All of these are now prohibited payments — demanding or accepting them is a criminal offence on repeat breaches and carries civil fines on a first offence.

For deposit-related compliance, the Act does two critical things: it caps the security deposit at five or six weeks' rent (depending on annual rent), and it caps the holding deposit at one week's rent. Exceeding either cap, even by a penny, creates a prohibited payment.

Permitted Payments Relevant to Deposits

For deposit-related compliance, the Tenant Fees Act 2019 permits these payment types:

Rent. The agreed monthly rent, payable as stated in the tenancy agreement.

Security deposit. Capped at five weeks' rent for tenancies with annual rent below £50,000, or six weeks' rent for annual rent of £50,000 or above. The deposit must be protected in an authorised scheme within 30 calendar days under the Housing Act 2004.

Holding deposit. Capped at exactly one week's rent. The landlord must refund or credit it within seven days of entering into the tenancy agreement. It can be retained only in the cases allowed by Schedule 2: relevant false or misleading information, failure of a Right to Rent check, tenant withdrawal, or the tenant not signing despite the landlord's reasonable steps to grant the tenancy. The default "deadline for agreement" is 15 days unless both parties agree in writing to a different deadline.

Default fees — limited to two categories only. Late rent: interest at no more than 3% above the Bank of England base rate, applicable only to rent that is 14 or more days overdue. Replacement keys or security devices: the reasonable, evidenced cost of replacement — the landlord must provide a receipt or invoice. Both categories must be written into the tenancy agreement.

Rent before and after signing — since 1 May 2026. Under the Renters' Rights Act 2025, a landlord cannot ask for, encourage, or accept rent before both parties sign the tenancy agreement. After signing, if rent is monthly, the landlord can ask for the first month's rent during the pre-tenancy period; if rent is paid more frequently, they can ask for up to the first 28 days. Once the tenancy starts, rent is due on the agreed dates and cannot be required early.

Administration fees, check-out fees, cleaning deposits, pet deposits, guarantor fees, and referencing fees charged to the tenant are prohibited payments.

How the Deposit Cap Works

The cap is calculated using the statutory formula:

Weekly rent = (monthly rent × 12) ÷ 52

Five-week cap = weekly rent × 5 (for annual rent below £50,000) Six-week cap = weekly rent × 6 (for annual rent of £50,000 or above)

The rounding rule matters. You must round down or truncate to two decimal places. Rounding up creates a prohibited payment. For a monthly rent of £1,200: annual rent is £14,400; weekly rent is £276.923...; five-week cap is £1,384.615... The maximum lawful deposit is £1,384.61 — taking £1,384.62 is an overpayment of one penny and constitutes a prohibited payment.

Pet deposits are prohibited. There is no separate deposit category for pets. The security deposit cap is the maximum you can take, regardless of whether the tenant has a pet. Under the Renters' Rights Act 2025, tenants have the right to request to keep a pet. Landlords can require the tenant to obtain pet damage insurance, but they cannot charge an additional deposit above the five or six-week cap.

What Happens if You Breach the Cap

If you take a deposit that exceeds the statutory cap, the excess is a prohibited payment and the tenant can reclaim it. Enforcement routes:

First-tier Tribunal. A tenant or relevant person can apply using Form TFA1 to the First-tier Tribunal (Property Chamber) to recover all or part of a prohibited payment or holding deposit that has not been repaid.

Local authority fines. Trading Standards can issue a civil penalty of up to £5,000 for a first breach. A repeat breach within five years escalates to a civil penalty of up to £30,000 or criminal prosecution carrying an unlimited fine.

The prohibited-payment claim is separate from a Section 214 deposit-protection claim: the Tenant Fees Act route may require repayment of the excess, while Section 214 compensation is decided in County Court.

Interplay with Deposit Protection

The Tenant Fees Act and the Housing Act 2004 create overlapping obligations:

1. Calculate the deposit cap correctly before taking any money
2. Take no more than the cap allows
3. Protect the full amount in an authorised scheme within 30 days
4. Serve the Prescribed Information within the same 30 days
5. If the rent changes mid-tenancy, recalculate the cap — refund any excess if the cap has decreased, or top up (within the new cap) if it has increased

Getting the cap wrong at step 1 cascades through every subsequent step. An over-collected deposit is a prohibited payment from day one, and protecting it in a scheme does not cure the Tenant Fees Act breach.

For the full deposit compliance sequence — including the cap calculation worksheet, holding deposit rules, and the protection timeline — the Tenancy Deposit Protection guide walks through every step from pre-tenancy payments to final return.

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