The government’s proposal that tenants should have a right to keep pets has kicked off a debate over how any damage should be paid for – and could pave the way for more tenant fees.
In the A Fairer Private Rented Sector White Paper published in June, the government plans to give tenants stronger rights to keep pets in privately rented accommodation. Additionally, the Tenant Fees Act 2019 would be amended to allow landlords to require tenants to hold pet insurance.
At the moment, the Tenant Fees Act caps deposits at five weeks’ rent for almost all residential properties. Additionally, it says tenants cannot be required to make payments to a third party except to pay Council Tax, utility and communications bills, and TV licence payments. At the moment, pet insurance isn’t a permitted third-party fee.
As it stands, the government’s suggestion of tenant-held insurance might not be enough to satisfy the industry. A survey of landlords and agents carried out by trade bodies found that while insurance is a popular solution for pet damage, less than 20% of respondents wanted the tenant to hold the policy themselves. A further 45.9% said they would prefer to buy their own policy and charge the tenant for it, while 30.5% preferred a separate pet deposit. The White Paper doesn’t account for either of these solutions, but the National Residential Landlords Association is now asking the government to allow landlords to take an additional pet deposit.
Meanwhile, activist groups have leapt to the Tenant Fees Act’s defence. Generation Rent argues that the existing five-week deposit should be enough to cover pet damage as landlords do not typically need to claim all of it – although in the industry survey, more than half of the landlords and agents said they had been unable to recover pet damage costs. According to the latest English Private Landlord Survey, 84% of landlords returned some or all of the deposit at the end of their last tenancy, although only a minority allow pets in the first place.
The Tenant Fees Act was extremely controversial in the lettings industry when it came into force in 2019, and some property professionals may welcome the pet insurance issue as a chance to attack the legislation more widely. Expanding the list of permitted third-party payments could potentially also open the way for other products – for example, allowing some agents and landlords to stop taking traditional deposits in favour of deposit replacement schemes.
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