This Sunday (1st September 2019), the Welsh private rental sector (PRS) will see changes, as its tenant fees ban becomes law.
This means that landlords and letting agents across Wales will no longer be able to charge tenants fees to set up, renew or continue a tenancy. This will apply to standard occupation contracts.
The Welsh tenant fees ban will prevent landlords and letting agents from charging letting fees and a number of other upfront fees payable by tenants to rent a property in Wales. This includes:
- Accompanied viewings
- Inventory charges
- Signing contracts
- Tenancy renewals
Landlords and letting agents will still be allowed to require permitted payments for:
- rent
- security deposits
- holding deposits
- default payments (due to breaches of a contract)
- payments in respective of council tax, utilities, a television licence, or communication services
Under the new law, holding deposits will be also restricted to one week’s rent.
It will be known as the Renting Homes (Fees Etc.) (Wales) Act 2019. The new legislation introduces a fixed penalty notice of up to £1,000 for anyone charging banned payments.
An estimated £200 could be saved per tenancy, according to the Welsh government.
The Tenant Fees Act in England came into force on 1st June 2019, bringing in similar changes. However, the main difference is that England now has a security deposit cap of five weeks’ rent, whereas there will be no cap on this for Wales.
Welsh government guidance states: “Although average security deposits tend to be around the equivalent of one month to six weeks rent, there may be circumstances which mean that you may wish to take a slightly higher amount of deposit, for example, should a tenant have pets, which may provide you with peace of mind should damages occur due to those pets. It is permissible to ask for a higher amount of deposit in these circumstances.”
*Update*
David Cox, Chief Executive of ARLA Propertymark, has commented: “The Welsh Tenant Fees ban comes into force on Sunday, and agents should already have implemented the necessary changes within their business in order to be compliant with the law.
“Although the ban has been front of mind for a while, it’s important agents stay up to date with other laws and local licences. A breach of the ban can result in a fine, and license revocation by Rent Smart Wales; so, it’s vital agents get this right.”