You may be asked to pay fees before you can take on a tenancy. These fees could be illegal if they are charged by a letting agent and cover services that benefit the landlord. If you decide to pay these fees, make sure you get a receipt. You may be able to claim the money back.
What does the law say about letting fees in Northern Ireland?
- it is charged by a letting agent AND
- paying it is a condition of moving into the property AND
- the fee covers a service that would be performed by the landlord, rather than the tenant, if there was no agent involved.
A joint statement from the Department of Communities and the Department of Finance in 2020 confirmed the government's position that agents cannot charge fees to a tenant when granting or renewing a tenancy.
The law only covers fees due on the granting or renewal of a tenancy. It doesn't cover charges like late payment fees, which are charged during a tenancy.
Fees charged by landlords
The legislation about letting fees in Northern Ireland only applies to fees which are charged by agents. If your landlord doesn't use an agent, the landlord is allowed to charge you fees. If you feel that the fees your landlord is charging are excessive you should speak to Trading Standards.
Refusing to pay letting fees
If an agent tells you that you must pay an application fee to apply for a property or to go through checking procedures, tell them what the law says about these fees. Some agents may not be aware of this law and may need to do their own research into the law and the Court's 2018 decision.
Unfortunately, some agents may decide not to rent the property to you if you refuse to pay a fee and some people may feel pressurised into paying the fee because they are worried that they will lose the property if they don't. If you do decide to pay a fee, make sure that you get a receipt and make sure that this receipt explains what the fee covers.
Claiming back fees that you have paid
The law allows you to claim back any illegal fees that you've paid in the last 6 years. You will need a receipt to prove that you paid the money, so getting this is really important.
You should write to the agent asking for your fees to be returned. Use our template letter to help reclaim your fees.
Fees to look out for
Some agents may levy extra fees on you at the beginning of a tenancy. You do not have to pay these charges, and a recent court decision in Northern Ireland suggests that many fees agents charge could be unlawful. If a fee is unlawful, you can argue that you don't have to pay it or pay it and later try to claim it back from the agent. Some of the charges which estate agents have been known to charge include:
- Deposit administration fee - this is a fee to cover the cost of protecting a tenant's deposit. As the landlord is required to protect deposits, it is very likely that this fee is covered by the 1986 Order
- Administration fee - Covers the cost of carrying out credit and employment reference checks and drawing up the paperwork for the tenancy agreement. In most cases, these services benefit the landlord and not the tenant and would be carried out by a landlord, so these fees will most likely be illegal.
- Holding deposit - Some agents require a holding fee to secure a property while credit and employment reference checks are carried out. If your tenancy goes ahead, this money should go towards your actual tenancy deposit or first month's rent. If the landlord decides not to offer you a tenancy, this money should be returned to you. Before you pay a holding deposit, ask for a written statement which clearly explains if and when the money will be returned to you and whether any deductions can be made.
Getting advice on tenancy fees
Make sure you understand exactly what any money you give to an agent is for and under what circusmtances it will be returned to you. Get receipts for any payments you make and keep a copy of any contract you sign relating to the payment of these fees. If you believe that the fee was unlawful, you can try to reclaim it using our template letter.
Speak to an adviser at Housing Rights if you think these fees are unfair and want to find out more about the law on tenancy fees.