12 May 2025
CIH NI response to a Private Members’ Bill on banning unfair letting fees
Q. Do you support the ambitions of the proposed Bill?
Yes, CIH Northern Ireland strongly supports the ambitions of the proposed Bill. Our research demonstrates that fees create a financial burden for tenants in Northern Ireland, with evidence of a lack of transparency and prevalence of unlawful practice by letting agents. The Bill presents an opportunity to create a fairer, more transparent and better-regulated private rented sector.
Q. Do you believe that landlords and estate agents should still be permitted to charge any of the tenancy fees listed below:
- A refundable tenancy deposit that is no more than one month’s rent.
- Payments associated with early termination of the tenancy at the tenant’s request, capped at £50 or the demonstrably reasonable costs incurred if exceeding this amount.
- Payments related to utilities, communication services, television licenses.
- A default fee for late rent payments, or Replacement of a lost key or security device providing access to the housing.
- None of the above.
CIH Northern Ireland believes that the primary aim of the legislation should be to create a clear, transparent and fair private rented sector in Northern Ireland, free from unexpected and unreasonable costs for tenants. Our research report, "Regulation of letting agents and letting agent fees in Northern Ireland" (June 2024), highlights the financial burden and lack of transparency associated with current letting agent fees. To achieve this aim, CIH Northern Ireland advocates for a limited scope of permissible fees.
Our position on the listed fees:
CIH Northern Ireland supports the principle of a refundable tenancy deposit capped at a reasonable level. Our research indicates a general acceptance among tenants that a refundable deposit is a legitimate requirement.
CIH Northern Ireland expresses support with caveats for allowing landlords and agents to recoup reasonable costs incurred due to a tenant's decision to terminate a tenancy agreement early, as this constitutes a breach of contract. We do have concerns about the potential for lack of transparency, and abuse in the application of such charges. Our research indicates that a significant portion of tenant respondents advocated for capping or abolishing early termination fees entirely. CIH Northern Ireland supports the principle of a cap and allowing recovery of further reasonable costs, while protecting tenants from excessive penalties.
The key issue is the definition of ‘demonstrably reasonable costs’. The legislation and accompanying statutory guidance should define this with clarity to promote transparency and prevent landlords and agents from inflating charges. Our research highlights a lack of transparency in existing fee structures, with tenants often unclear about what fees cover. This lack of clarity creates a risk that agents may inflate costs or include standard business overheads in ‘early termination’ charges.
To mitigate this, the legislation could include:
- A requirement for landlords and agents to provide full transparency and justification for any costs exceeding the £50 cap, with the burden of proof resting on the landlord/agent
- A robust and accessible dispute resolution mechanism to allow tenants to challenge unreasonable charges.
CIH Northern Ireland considers utilities as costs directly related to the tenant's consumption and choice of services. If these services are provided as part of the tenancy agreement, landlords and agents should be permitted to recover the actual cost of provision but should not be permitted to levy additional charges or administration fees on top of this cost.
CIH Northern Ireland acknowledges that these situations can lead to costs for landlords and agents. Permissible charges should be proportionate and linked to the actual costs incurred.
- Late rent payments: Any default fee for late rent should be clearly defined, included in the tenancy agreement and calculated in a way that reflects the financial impact of the late payment. One potential approach, as seen in England, could be to link the fee to the Bank of England base rate. This reflects the role that the base rate plays in the cost of debt financing for landlords.
- Replacement of a lost key or security device: Tenants should only be charged the actual, evidenced cost of replacing the key or device. Landlords/agents should not be permitted to add administrative fees for arranging this.
Aside from the fees outlined above, which if any other fees do you think a letting agent, landlord or third party should also be permitted to charge?
CIH Northern Ireland believes that the legislation should aim for maximum clarity and simplicity in relation to permissible fees. Therefore, our primary position remains that minimising the number of allowable fees is crucial to ensure transparency and prevent exploitation.
We acknowledge the practice of charging a refundable holding deposit to reserve a property, and that landlords and agents can incur losses when prospective tenants decide not to proceed after committing to a tenancy.
Therefore, if the legislation permits holding deposits, it is imperative that it includes robust fairness provisions to protect tenants, such as:
- A clearly defined limit on the amount of the holding deposit (e.g. one week's rent, as in England)
- Explicit requirements for transparency, including:
- Written confirmation of the deposit amount
- Clear and comprehensive information provided to the prospective tenant, in writing, outlining the specific conditions under which the holding deposit will be refunded and the specific circumstances in which it may be retained
- A reasonable timeframe for reference checks and other administrative processes, to prevent agents from holding deposits for excessive periods
- A robust and accessible dispute resolution mechanism for tenants to challenge unfair withholding of holding deposits.
CIH Northern Ireland believes that to ensure clarity and prevent potential for additional charges, end-of-tenancy cleaning should not be permitted as a separate fee charged by the landlord or agent. We acknowledge that costs for cleaning may arise if a property is not left in a reasonable condition, beyond fair wear and tear. In such instances, these costs should be addressed through fair and transparent deductions from the refundable tenancy deposit, in accordance with tenancy deposit protection scheme regulations.
Beyond the holding deposit, and the fees already addressed in our response to the previous question, CIH Northern Ireland maintains that no other fees should be permitted. Our research demonstrates the problems caused by a proliferation of agent fees, even where they are unlawful. The evidence strongly points towards a model with a very limited number of permissible fees as the most effective way to protect tenants and create a fair private rented sector.
Some letting agents/landlords may charge payments for work associated with changing a tenancy, if requested by the tenant. Do you think this is a fair charge?
CIH Northern Ireland believes that fees for work associated with changing a tenancy, if requested by the tenant, are not fair and should not be permitted.
The work involved in changing a tenancy agreement, such as updating the contract or conducting reference checks for a new tenant, is essentially administrative in nature. These costs should be covered by the fees that letting agents already charge landlords for their services. Charging tenants separately for these tasks lacks transparency and creates an opportunity for agents to inflate costs.
If fees are allowed for tenancy changes in very specific circumstances, then as a minimum, the legislation should include provisions that:
- Require agents to provide tenants with comparative quotes for the work involved
- Allow tenants to source their own contractors to carry out the work, where appropriate
- Explicitly state that fees can only be charged for changes that are not covered by the existing tenancy agreement
- Explicitly prohibit fees for tenancy renewals.
However, CIH Northern Ireland’s preference remains that the legislation prohibit fees for changing a tenancy agreement. This will ensure greater transparency, reduce costs for tenants and align with the principle of agents being paid by landlords for their administrative work.
Letting agents/landlords may occasionally provide bespoke, non-standard services to tenants, for example, when arranging a property for someone currently living abroad who is relocating to the North of Ireland. Do you think this should be excluded from the ban on letting agent fees?
CIH Northern Ireland recognises that the proposed legislation aims to prevent unfair and exploitative fees charged to tenants. However, we also acknowledge that landlords/agents may occasionally provide bespoke, non-standard services to tenants that fall outside the scope of typical letting activities, such as assisting with complex relocations.
While our primary stance is that the legislation should minimise the scope for additional fees, we believe that there might be a limited case for excluding certain bespoke services from a blanket ban, provided that very strict conditions are met.
Should any type of tenancies, licensees, bodies be exempt from the Bill?
CIH Northern Ireland believes that the legislation should aim for minimal exemptions to ensure maximum protection for tenants and clarity in the law. However, we recognise that there might be specific situations where exemptions could be considered or explicitly stated, such as for tourism or other leisure purposes separate from residential tenancies, provided they are very narrowly defined and do not create opportunities for abuse.
To provide flexibility and allow for future adjustments, CIH Northern Ireland suggests that the legislation could empower the relevant regulatory authority or the Department for Communities to issue regulations specifying any permissible exemptions. This would enable them to add, delete or amend exemptions as needed, based on evidence and changing circumstances.
It is proposed the new Act would apply immediately to all new tenancies entered into after the legislation is enacted. Do you agree with this proposal?
CIH Northern Ireland agrees that the new Act should apply immediately to all new tenancies entered after the legislation is enacted. This approach is consistent with the existing legal framework in Northern Ireland, where agents’ pre-tenancy fees have already been ruled unlawful. Applying the legislation immediately will provide clarity and ensure that tenants are protected from these unlawful charges from the outset.
To further enhance tenant protection and address potential anomalies, CIH Northern Ireland recommends that the legislation also explicitly clarifies that the ban on fees applies to existing tenancies upon renewal.
Furthermore, consideration should be given to bringing all existing tenancies into alignment with the new legislation after a reasonable transition period (e.g. one year after the legislation is implemented for new tenancies). This would prevent a situation where landlords or agents attempt to recoup losses from existing tenants or continue to charge fees under existing agreements. Cleaning charges at the end of a tenancy are an obvious area where this could be a risk.
This phased introduction, applying first to new tenancies and then to existing tenancies after a set period, mirrors the approach taken in similar legislation in England and Wales (e.g. with fitness for habitation laws) and allows landlords and agents time to adjust their business practices.
Do you think there will be any challenges or issues in enforcing the proposed legislation?
CIH Northern Ireland anticipates that there will be challenges in enforcing the proposed legislation, and that adequate resources and a robust enforcement framework will be essential to ensure its effectiveness.
In the case of letting agents, we believe that Trading Standards Service (TSS) is well-placed to enforce these regulations, given their existing experience in consumer protection and their role in related areas. However, it is imperative that the Department for the Economy provides TSS with sufficient resources to carry out this additional responsibility effectively.
In terms of enforcement powers and practices, the legislation should, as a minimum, empower the enforcement body (TSS) to:
This includes the ability to request information from letting agents, and to conduct inspections where necessary.
For breaches of the legislation, with penalties that are sufficiently deterrent.
Ideally, the enforcement body should also be resourced and empowered to undertake:
To identify and address potential compliance issues before they lead to complaints. This could involve regular checks of letting agent practices and tenancy agreements.
To provide clear and comprehensive guidance for landlords and letting agents to help them understand and comply with the legislation. This guidance should be readily accessible and regularly updated.
To occasionally publish reports (like those produced by the Ombudsman in England and Wales) that highlight regulatory judgments in cases where there is a consistent pattern of non-compliance. These reports can serve as a deterrent and provide valuable learning for the sector.
CIH Northern Ireland notes that while a standalone ban on letting agent fees is a necessary step, it may present enforcement challenges compared to a broader regulatory framework. As our research highlights, a comprehensive regulatory framework, with mandatory registration and licensing of letting agents, provides a stronger foundation for enforcement. This is because it creates a system of ongoing oversight and accountability.
In the case of landlords, the enforcement landscape is currently more fragmented. While Environmental Health Officers in local councils have a role in enforcing certain aspects of housing legislation, including tenancy deposits, there is no single body with a clear and comprehensive remit for overseeing all landlord practices related to fees. This fragmented approach could lead to inconsistencies in enforcement and a lack of clarity for tenants seeking redress. Therefore, any effective enforcement of the proposed Bill will need to consider how landlord compliance will be monitored and addressed. Potential solutions include:
- closer collaboration and information sharing between TSS and local councils
- a clarification of responsibilities between different enforcement bodies
- the introduction of a statutory ‘duty to cooperate’ between relevant agencies to ensure a joined-up approach to enforcement.
It is also important to acknowledge that broader regulatory frameworks offer the potential for self-funded enforcement through licensing or registration fees, which a standalone fee ban lacks. However, new regulations for authorities to enforce a fee ban would be a welcome improvement on the current situation.
Do you envisage any unintended consequences arising from this Bill?
CIH Northern Ireland recognises the importance of carefully considering potential unintended consequences arising from the Bill. Based on our research and the experience in other jurisdictions, we believe the following unintended consequences could potentially emerge:
There is a concern that agent costs previously covered by tenant fees might be passed on to landlords and subsequently reflected in increased rents. While the evidence from GB is inconclusive or at most suggests any rent increases were modest, this remains a potential concern.
Letting agents will need to adapt their business models to account for the loss of revenue from tenant fees. This could potentially lead to increased fees for landlords or a reduction in service quality if agents attempt to cut costs.
As our research indicates that some unlawful fees persist despite existing regulations, there is a risk that some agents might attempt to circumvent the ban by introducing new charges under different descriptions or increasing the cost of other services. Clear definitions in the legislation and robust enforcement will be crucial to mitigate this risk.
Smaller letting agencies with tighter margins might find it more challenging to absorb the loss of tenant fee income compared to larger firms. This could potentially lead to market consolidation.
To maintain profitability, some agents might reduce the level of service they provide to tenants.
What do you believe the financial impact of the Bill’s implementation will be on Landlords/Letting Agents?
Based on our research and the experience in other jurisdictions, CIH Northern Ireland believes that the financial impact of the Bill's implementation on landlords and letting agents will be minimal.
What do you believe the financial impact of the Bill’s implementation will be on Government Departments?
CIH Northern Ireland believes that the financial impact of the Bill's implementation on government departments can be manageable. The key factors influencing the financial impact will be:
As we noted in our response to the enforcement question, adequate funding for TSS is crucial. This will likely be the most significant cost for government, but it is essential for effective enforcement and to ensure the Bill's objectives are achieved.
If local councils are to play a role in enforcing aspects of the legislation related to landlords (as they currently do with tenancy deposits and other housing legislation), it is essential that they are also adequately resourced. This may involve additional funding for staff, training and legal support within local councils. Clear guidance and coordination between TSS and local councils will be crucial to ensure effective and consistent enforcement.
Investing in a comprehensive public awareness campaign is vital to ensure that tenants, landlords and letting agents are all aware of their rights and responsibilities under the new legislation. This will help to promote compliance and minimise the need for enforcement action in the long run.
Do you envisage any Equality or Human Rights implications arising from the proposed Bill?
The Bill could reduce the financial burden on tenants who are renting privately, which can have a positive impact across equality grounds since certain groups are often overrepresented in the private rented sector and may be disproportionately affected by high fees.
Do you have any further comments regarding the above questions or other issues relating to the proposed Bill?
Fee transparency
CIH Northern Ireland would like to emphasise the critical importance of transparency in any legislation addressing fees. Our research highlights that a lack of clear and accessible information regarding fees contributes significantly to tenant dissatisfaction and the potential for unfair practices.
To address this, we recommend that the Bill include provisions mandating letting agents and landlords to proactively publish a comprehensive list of any permissible fees. This should include:
Clearly stating all potential fees within the tenancy agreement itself.
If there are separate contractual agreements for services, these should also clearly outline any associated fees.
Displaying a readily visible and easily understandable list of all fees in any physical offices where tenants interact with the agent/landlord.
Publishing a clear and easily accessible list of all fees on the letting agent's website and any online platforms used for property listings.
Fees should be published through whatever channel the customer uses to conduct business with the agent or landlord. For example, if the agent primarily interacts with tenants online, the fee information must be prominently displayed online.
Ideally, the legislation should also include a requirement for agents and landlords to obtain a signed statement from the tenant (like finance agreements) acknowledging that they have been directed to and made aware of the fees. This prevents agents or landlords from publishing fee information in ‘small print’ or in an obscure or poorly advertised section of their website or office.
Mandating the publication of fees in these multiple locations, and requiring tenant acknowledgement, will maximise visibility for enforcement and empower tenants to challenge any unexpected or undisclosed charges. This level of transparency is a cornerstone of fair practice and aligns with approaches taken in other regulatory frameworks.
Dispute resolution
CIH Northern Ireland would also like to highlight the crucial need for accessible and effective dispute resolution mechanisms in relation to this Bill. Our previous proposals for a comprehensive letting agent regulatory framework included a requirement for mandatory membership of a redress scheme to facilitate the resolution of complaints from both landlords and tenants.
A standalone approach focused solely on banning fees, without a broader regulatory framework, lacks this inherent mechanism for alternative dispute resolution (ADR) for issues involving letting agents. Therefore, it is essential that careful consideration is given to how clients of letting agents (both landlords and tenants) can access ADR services to resolve disputes related to prohibited fees or the interpretation of the new legislation.
Importantly, more thought also needs to be given to how tenants renting directly from private landlords (where no letting agent is involved) can access suitable ADR mechanisms for disputes related to fees that may be unlawfully charged. The current fragmented enforcement landscape for landlords, as outlined in our response to the enforcement question, underscores this need.
Find more information about the consultation below:
For more details on our response please contact Justin Cartwright, national director for CIH NI, justin.cartwright@cih.org.
