prohibited payment
📖 What is prohibited payment? Meaning and definition
In the context of UK tenancy law, a prohibited payment is any fee or charge demanded from a tenant that falls outside the specific types of payments allowed by the Tenant Fees Act 2019. This Act was introduced to prevent landlords and letting agents from imposing various charges on tenants, such as fees for administration, referencing, or check-in/check-out inventories, which were common before the Act came into force. The aim is to make renting more affordable and transparent for tenants.
When a landlord or agent requires a tenant to make a prohibited payment, it constitutes a breach of the Act. Tenants who have made such payments can apply to the First-tier Tribunal (Property Chamber) for an order to recover the money. The Tribunal has the power to order the repayment of the full amount of the prohibited payment or holding deposit.
Examples of payments that have been deemed prohibited include retaining part of a deposit for 'admin purposes' or charging for general administration relating to an application, including check-in and check-out inventories, and background checks. Even a holding deposit can be considered a prohibited payment if it exceeds the legal limit or is not refunded under specific circumstances. The Act provides a mechanism for tenants to reclaim these funds, and such orders are enforceable through the county court.
📋 Requirements
- The payment must have been required by a landlord or letting agent.
- The payment must be in connection with a tenancy.
- The payment must not be one of the few types of payments permitted by the Tenant Fees Act 2019.
📝 Procedure
- An application is made to the First-tier Tribunal (Property Chamber) for the recovery of the prohibited payment.
- The Tribunal considers the application, often based on submitted documents without a hearing.
- If the Tribunal finds that a prohibited payment was made, it issues an order for the respondent (landlord or agent) to repay the applicant (tenant).
- The order specifies the amount to be repaid and a deadline for repayment.
- The Tribunal's order is enforceable by the county court if the payment is not made.
💡 Examples
- A tenant was required to pay £21.60 which was later identified as a prohibited payment, leading to a Tribunal order for its repayment.
- A landlord retained part of a tenant's £540 deposit, specifically one week's rent, for 'general administration charges' including inventory and background checks, which was deemed a prohibited payment.
- An applicant paid a £300 holding deposit but was unable to meet additional requirements for the tenancy, and the refusal to refund the deposit led to a Tribunal order for its recovery as a prohibited payment.
- A landlord faced a potential penalty of £5,000 for requiring a tenant to make a prohibited payment by retaining part of a deposit for administrative purposes.
📚 Legal basis
- Tenant Fees Act 2019
❓ Frequently asked questions
What kind of payments are considered prohibited?
Prohibited payments are generally any fees or charges demanded by a landlord or agent from a tenant that are not explicitly allowed by the Tenant Fees Act 2019. This can include charges for administration, referencing, check-in/check-out inventories, or retaining parts of a deposit for 'admin purposes'.
Can a holding deposit be a prohibited payment?
Yes, a holding deposit can be considered a prohibited payment if it exceeds the legal limit (typically one week's rent) or if it is not refunded to the tenant under specific circumstances, such as if the landlord withdraws from the agreement or imposes unreasonable conditions.
How can I get my money back if I've paid a prohibited payment?
You can apply to the First-tier Tribunal (Property Chamber) for an order to recover the prohibited payment. The Tribunal will review your application and, if successful, order the landlord or agent to repay the amount.
What happens if a landlord doesn't repay a prohibited payment after a Tribunal order?
If a landlord or agent fails to comply with a Tribunal order to repay a prohibited payment, the order can be enforced by the county court, meaning you can take further legal steps to recover the money.
Are there any penalties for landlords who demand prohibited payments?
Yes, landlords who breach the Tenant Fees Act 2019 by requiring prohibited payments can face penalties, which may include fines, as seen in cases where initial penalties considered were substantial.
Do I need a solicitor to recover a prohibited payment?
While you can represent yourself, as many self-represented litigants do, seeking advice from a qualified solicitor specialising in housing law can be beneficial to ensure your application is strong and correctly presented.