Before the TFA, tenants routinely paid administrative charges, referencing fees, check-in fees, tenancy renewal fees, and a wide range of other charges that had no cap. The Act stripped all of these out. Only five categories of payment are now permitted, and several of those are strictly capped. Getting this wrong is not just a fine risk, it directly jeopardises your ability to recover possession.
The Act applies to assured shorthold tenancies, licences to occupy, and student accommodation. It does not apply to long residential leases, social housing, or lodger arrangements with resident landlords. Following the Renters' Rights Act 2025, Section 21 notices are no longer available for new tenancies from 1 May 2026, but the TFA prohibition on retaining unlawfully charged fees still affects deposit return obligations and any Section 8 possession proceedings.
The five permitted payments
Under the TFA, landlords and agents may only require payment of:
- Rent: the agreed monthly rent as set out in the tenancy agreement. You cannot charge a higher rent for the first month or in lieu of a prohibited fee
- Tenancy deposit: capped at five weeks' rent where annual rent is under £50,000; capped at six weeks' rent where annual rent is £50,000 or above. Must be protected in a government-approved scheme within 30 days
- Holding deposit: capped at one week's rent. Paid to reserve the property while referencing is completed. Strict rules on retention and return, see below
- Default charges: only two default charges are permitted, (1) interest on overdue rent at up to 3% above Bank of England base rate, applied only after rent is 14 days overdue; and (2) the reasonable cost of replacing a lost key or security device (evidenced by receipt)
- Changes and early termination requested by the tenant: a charge for a novation or deed of surrender at the tenant's request, capped at £50 (or actual reasonable costs if higher and evidenced)
Prohibited charges, what you cannot charge
The following charges are banned and must not appear in any tenancy agreement or be demanded separately:
- Referencing fees and credit check fees: cannot be charged to tenants (agents cannot pass these on either)
- Administration fees: tenancy setup, check-in, or document preparation fees, all banned
- Check-out and inventory fees: tenants cannot be charged for the final inspection or inventory comparison
- Renewal fees: charging to extend or renew a tenancy is prohibited
- Guarantor arrangement fees: separate charges for arranging a guarantor are prohibited
- Pet fees as an addition to rent: a higher deposit (within the five/six-week cap) is the permitted mechanism, a separate pet bond or fee is not
- Cleaning fees upfront: requiring payment of a cleaning fee at the start of the tenancy is banned (reasonable cleaning costs deducted from the deposit at the end remain possible)
Holding deposit rules in detail
The holding deposit is the most complex permitted payment. Key rules:
- Maximum: one week's rent (annual rent ÷ 52). Cannot be topped up or supplemented with further sums
- Deadline for reaching agreement: you must enter into a tenancy agreement within 15 days of receiving the holding deposit (the deadline period), or as agreed in writing
- Must be repaid or applied: the holding deposit must either be applied to the first month's rent or deposit, or returned to the tenant, it cannot be retained simply because you decide not to proceed
- Permitted reasons to retain the holding deposit: the tenant provides false or misleading information, the tenant fails a right-to-rent check, the tenant withdraws without agreement, the tenant fails to take all reasonable steps to enter the agreement within the deadline period
- You cannot retain the holding deposit if you decide not to proceed, or if the tenancy does not proceed due to your own failure to complete referencing checks within the deadline
- Written record: keep a written record of the date the holding deposit was received, the deadline period, and the outcome, retention decisions must be communicated in writing
Default charges, interest and lost keys
Two default charges are permitted, subject to strict conditions:
- Late payment interest: can be charged only when rent is more than 14 days overdue. Maximum rate is 3% above Bank of England base rate, applied from the date the rent first became overdue. You cannot charge a flat late fee or a percentage of rent as a penalty
- Lost key or security device: you can recover the reasonable cost of replacing a lost key, key fob, or entry device. You must provide written evidence of the actual cost (e.g., a locksmith's receipt). You cannot charge more than the actual cost
- Anything else, no matter how it is described in the tenancy agreement, is a prohibited payment if not in the permitted list
Consequences of charging a prohibited fee
The enforcement and liability regime is significant:
- Civil penalty up to £5,000: first breach assessed by the local authority trading standards team or the relevant London borough council
- Criminal offence and fine up to £30,000: if you commit a further breach within five years of a civil penalty
- Section 21 block: if you have taken a prohibited payment and not returned it, you cannot serve a valid Section 21 notice. Under the Renters' Rights Act 2025, Section 21 is abolished from 1 May 2026 for new tenancies, but any outstanding prohibited payment still affects deposit return and may be raised as a defence in Section 8 proceedings
- Deposit scheme implications: a deposit taken above the permitted cap cannot be held in an approved scheme for the excess, the excess must be returned
- Repayment order: a tenant can apply to the First-tier Tribunal for repayment of a prohibited charge, regardless of what the tenancy agreement says
Frequently asked questions
Can I charge a higher first month's rent to cover referencing costs?+
No. Under the Tenant Fees Act 2019, you cannot charge a higher first month's rent as a workaround for banned referencing fees. Any initial payment that exceeds the agreed monthly rent is a prohibited payment if it relates to tenant setup costs rather than rent for the period. HMRC and local authority enforcement teams specifically look for this practice.
What happens if my tenancy agreement still contains a prohibited charge clause?+
Any clause in a tenancy agreement that requires the tenant to pay a prohibited charge is void and unenforceable. The rest of the tenancy agreement remains valid. However, you cannot demand payment under that clause and doing so would be a breach of the Act. Review your tenancy agreement template and remove any reference to banned charges before issuing new agreements.
Can I charge tenants for professional end-of-tenancy cleaning?+
You cannot charge a cleaning fee upfront or require the tenant to pay for professional cleaning in advance. However, if the property is not returned in the same state of cleanliness (fair wear and tear excepted), you can make a deduction from the tenancy deposit via the approved scheme's dispute process. Tenancy agreements that require tenants to use a named cleaning company or pay a fixed cleaning fee regardless of the property's condition are unenforceable.
My tenant wants to add a pet, can I charge a pet deposit?+
You can increase the tenancy deposit up to the statutory cap (five weeks' rent for rent under £50,000 annually) when a pet is permitted. You cannot charge a separate pet bond or pet fee on top of the deposit. If the deposit is already at the cap, you have no legal mechanism to require an additional pet-related payment under the TFA, though you can review your rent level for a new tenancy.