The RLA has submitted it’s response to the Welsh Government’s consultation on the Renting Homes (Wales) (Fees etc) Bill.
The response, which you can read here outlines the issues that RLA has with the Bill and the potential solutions on issues such as enforcement and the treatment of holding deposits.
Prohibition of charging agency fees
As part of the Bill, the Welsh Government is proposing to prohibit the charge of agency fees under SS 2 and 3 of the Bill, stating that doing this would “reflect a further step in improving the PRS by increasing accessibility and transparency for tenants and prospective tenants’.
However-the RLA has the view that doing this is the wrong approach to fulfill the Welsh Government’s objective, adding that the RLA continues to advocate for Welsh Government to utilize statutory powers already available to meet its
Voluntary Fees Code
The RLA believes that while some agencies and landlord have in the past charged exorbitant fees, agency fees cover the legitimate costs and account for time spent with tenants in setting up their tenancies.
Therefore the RLA is proposing a ‘Voluntary Fees Code’ which would standardise the charges permitted and place a cap on the amounts that can be charged.
The RLA believes that the complete ban on tenancy fees will simply place further pressure on landlords to review increases to the amount that they charge in rent, to cover the costs transferred by letting agents and will undoubtedly reduce the transparency of the actual cost of letting to the tenant.
Treatment of holding deposits
Schedule 2 as introduced under s9 of the Bill, Paragraph (para) 3(b) states that if the ‘parties fail to enter into a contract before deadline agreement’ then the landlord must repay the holding deposit.
The RLA has concerns regarding the legitimate retention of holding deposits by landlords/agents and is seeking clarity under para 10 (b), as to the measure of ‘reasonable steps’ if the contract holder fails to enter a contract before the end of the holding deposit retention date.
Enforcement and different fixed penalty notices
Part of the Bill, Section 13, outlines that an authorized officer would grant a fixed penalty notice in lieu of prosecution. However the RLA believes that the amount of £500 as provisioned under Section 13(2) of the Bill is an insufficient deterrent for agencies.
The RLA is concerned that since our average member ordinarily only holds a few properties to let, a letting agency may risk a small fine such as £500 for the opportunity
to raise larger profits by charging prohibited payments. Therefore is is being recommend that two thresholds are set for fixed penalty notices; a smaller amount for landlords, such as £500 and then a larger amount for agencies.
Earlier this year, the RLA warned that banning fees charged to tenants in Wales will only punish those in society who are most vulnerable.
Meanwhile in England, it has been confirmed that second reading of the Tenant Fees Bill in the House of Lords will take place on 10th October.
Find out more
- You can read the RLA’s full response full response to the consultation here.