Pets and the TFA – what can a landlord charge and how will the TFA work?

There are two posts in one today so, again, thank you to Julie Ford for the prompt.

The original scenario was this:

Post-implementation of RRB, if a tenant requests a pet then the landlord cannot unreasonably refuse. If the landlord needs consent from a third party (for example, the landlord is a leaseholder in a block of flats and requires the consent of the freeholder) then the landlord must seek that consent. But what if there is a fee attached to that consent? Can that fee be passed onto the tenant? If not, is it reasonable to refuse consent?

The way to start looking at this is that a fee cannot be charged to a tenant unless it is a permitted payment. It could perhaps be covered by the ‘variation of contract’ permitted payment since the contract could be amended to reflect the new permission. The variation of contract fee is often capped at £50 but it can be higher if there are ‘reasonable costs’ incurred by the person ‘to whom the payment is to be made’. I think this could cover a fee to a third party to obtain consent – but the key word here is ‘could’. This is certainly not a certainty.

A landlord may not be willing to pay that fee and, if you take the view that the fee cannot be passed on, then it must be reasonable to refuse.

Following on from that scenario though, I wanted to explore the TFA in the context of the ‘new’ permitted payment that will be introduced by RRB; pet insurance.

A landlord can request as a condition of granting consent that a tenant must obtain a pet insurance policy but can they take any thing else?

I have previously done a deep-dive on the TFA in this post: Guarantor Alternative Products - are they Tenant Fees Act compliant?  And the logic is the same here; if a prohibited requirement is offered as an alternative to something which is not prohibited by the TFA then it is allowed.

So then, to the conclusion:

A pet insurance policy will not be prohibited by the TFA. That means that anything can be offered as an alternative to it. The tenant then has the choice as to whether or not to take out an insurance policy or do the alternative. Say, if a landlord is offering to accept £X instead of an insurance policy and £X is lower than the cost of an insurance policy then it may be worth a tenant choosing that option – this is certainly not financial advice and I am not an expert on what pet damage insurance policies are/will be out there, but it seems possible that this scenario could play out.

Note: if anyone has a lettings law question for me then I will answer it for free as long as I think it will make for an interesting post. These posts are essentially my morning Sudoku.