England operates one of the most restrictive late fee regimes in the world for residential tenancies. The Tenant Fees Act 2019 (effective 1 June 2019) severely limits what a landlord can charge when a tenant pays rent late, essentially prohibiting traditional "late fees" entirely and permitting only a capped interest charge.

The Tenant Fees Act 2019 Framework

Under the Act, a landlord cannot charge a flat-rate late fee (e.g., "£50 per late payment"). The only permitted default charge for late rent is:

Interest at a rate not exceeding 3% above the Bank of England base rate, calculated on the amount of rent outstanding from the date it became due.

This interest can only be charged once rent has been outstanding for 14 days or more. Rent that is 1-13 days late cannot attract any financial penalty whatsoever.

[!CAUTION] Charging Banned Fees: Demanding any payment beyond the permitted interest charge (e.g., a £100 "admin fee" for late payment) is a breach of the Tenant Fees Act 2019. For a first breach, a local weights and measures authority may impose a financial penalty not exceeding £5,000. For a subsequent breach within 5 years, a financial penalty not exceeding £30,000 may be imposed, or the person may be guilty of an offence punishable by a fine.

Calculating the Interest Charge

Example: If the Bank of England base rate is 4.5%, the maximum permissible interest rate on overdue rent is 7.5% per annum (4.5% + 3%).

For a tenant who owes £1,200 in monthly rent and is 30 days overdue (16 days after the 14-day grace period):

• Daily interest rate: 7.5% ÷ 365 = 0.02055%
• Interest for 16 chargeable days: £1,200 × 0.02055% × 16 = £3.95

Other Permitted Default Charges

The Tenant Fees Act 2019 permits landlords to charge tenants for specific defaults beyond late rent:

• Lost Keys: A payment in default is a permitted payment if it is for the loss of a key or other security device giving access to the housing and the amount of the payment does not exceed the reasonable costs of replacing the key or device or, where the loss results in the need for a lock to be replaced, the reasonable costs of replacing the lock.
• Early Termination: A payment is a permitted payment if it is a payment on termination of a tenancy, and the tenant requests to terminate the tenancy before the end of a fixed term or (in the case of a periodic tenancy) without giving the amount of notice required by the tenancy agreement, and the payment does not exceed the loss suffered by the landlord as a result of the termination or the reasonable costs incurred by the landlord in arranging for the early termination of the tenancy.

Track English Arrears Precisely

Calculating interest at 3% above a fluctuating Bank of England base rate across multiple tenancies is complex and error-prone. Landager automatically applies the correct BoE-linked interest rate to late rent balances, ensuring your charges are always compliant with the Tenant Fees Act 2019.

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