Renters must be provided with evidence of costs before they can impose charges, as part of amendments to the Tenant Fees Bill.
It means tenants will no longer be forced to pay “excessive” costs for minor damages.
For example, landlords or agents will not be able to charge hundreds of pounds for damaged items that cost only a few pounds to replace.
Other changes to the bill include steps to make sure tenants get their money back quickly by reducing the timeframe that landlords and agents must pay back fees that have been unlawfully charged.
Under the new law, letting agent fees will be banned and deposits at the start of the tenancy will be capped at six weeks’ rent under the new laws.
The bill is set to save tenants around £240m a year, the government said.
Minister Rishi Sunak MP said: “Tenants across the country, whatever their income, should not be hit with unfair costs by agents or landlords.
“This government is determined to make sure our housing market works and this new provision in the Tenant Fees Bill will make renting fairer and more transparent for all.”