The Renting Homes (Fees etc.) (Wales) Act
This Sunday (1st September 2019), the Welsh private rental sector (PRS) will see changes, as its tenant fees ban becomes law.
This Sunday (1st September 2019), the Welsh private rental sector (PRS) will see changes, as its tenant fees ban becomes law. The Renting Homes (Fees etc.) (Wales) Act comes into force which sets out rules to ban letting agents and landlords from charging fees to tenants in Wales. The ban will apply to tenancy agreements, Assured Shorthold Tenancies (ASTs), signed on or after 1 September 2019.
Please find some useful key points below, be aware that there are differences in the ban detail between England and Wales.
The only payments that tenants can be charged are those expressly permitted under the Renting Homes (Fees etc.) (Wales) Act 2019, all other charges are prohibited.
Tenants cannot be asked to pay any fees apart from the Permitted Payments specified. As an agent or landlord you are NOT allowed to charge a tenant for any of the following:
- Referencing (for a tenancy in your property or an onward reference)
- Application fees
- Set up costs for a tenancy
- Fees for contract negotiation
- Fees for inventory checks
- Accompanied viewings of properties
A landlord or agent can take a refundable Holding Deposit from a tenant to reserve a property, but this cannot exceed one week’s rent.
Unlike the Tenant Fee Act in England, a security deposit as normal can be held by the landlord (or agent acting on the landlord’s behalf) as security during the period of the tenancy and reserved for any damages or defaults by the tenant.
Tenants will, as per normal, have to pay the following:
- An administration fee when the tenant requests a change or early termination of a tenancy
- Utilities, communication services and Council Tax bills
- Payments arising from a default by the tenant, e.g. replacing a lost key.
If a tenant is charged a Prohibited Payment by a landlord or agent, it must be fully refunded immediately. If it is not repaid in full, the agent or landlord will receive a £1,000 Fixed Penalty Notice for every breach. An estimated £200 could be saved per tenancy, according to the Welsh government.
Successive breaches may result in landlords and letting agents having their Rent Smart Wales licence removed, ultimately meaning that they will not be able operate in Wales.