RLA Wales has told the government it must take landlords’ time into account when setting default fees.
While the fee ban in England was introduced in June, the Welsh ban does not come into force until September.
However, unlike the English equivalent, matters such as default fees (paid by tenants breaching their contract) and prescribed documents (compulsory information to be given to tenants) have yet to be finalised, and are at the discretion of the Welsh housing minister.
The RLA has now submitted its response to the consultation ‘Renting Homes (Fees etc.) (Wales) Act 2019: default fees and prescribed information’.
The Welsh government has already laid its cards on the table, saying it wants a set limit for default payments to reflect the ‘actual costs incurred by the agent’: Simply, if it costs £20 to have new keys cut, then the fee is £20.
It has chosen this approach above the alternative of placing a cap on payments, over fears landlords would simply charge the maximum amount as a matter of course.
RLA proposals: time is money
The RLA wants the government to go further and proposes default payments should cover the actual financial loss AND the loss of the landlord’s time.
RLA vice-chair and director for Wales Douglas Haig said: “For a landlord and agent time costs them the most.
“Time addressing matters such as replacing a lock or rearranging a pre-agreed callout with a tenant who then refused to let workmen in to do the work.
“Time that the property is not being advertised and time lost in the search for new tenants, time assisting tenants with agreements and time spent on late night callouts and emergencies.
“The physical costs of a key and a lock is one thing, but the time spent arranging repairs, being called out at 4am or attending to the property yourself, costs the landlord and agent dearly. Therefore, there must be some redress to claim the reasonable cost of that time back.”
In its official response RLA has told the government:
- When a tenant has misplaced their key or lost it completely on a night out, a call to a landlord to come with a replacement is commonplace. The landlord should be able to make a reasonable charge for the time and inconvenience.
- If the landlord cannot claim a reasonable cost to their time, they will simply reduce the service that is available to the tenant. If taxis and other services are able to increase their fees for late night services and call outs, then why can’t a landlord woken up at 4am by a tenant who has locked themselves out?
- When regulating charges in this area a late-night callout charge should be included as a permitted payment along with the cost of replacing the key.
- As the security of the home and the other tenants is an issue as a result of the lost key, the locks would have to be changed, and the full charge of this – the new lock, fitting and replacement keys – should be included on a list of permitted payments.
Late Rent Charges
The consultation also asks questions about the amount charged for a late payment of rent.
The RLA said for a healthy private rented sector to exist tenants must pay their rent – and it is vital there are deterrents to those tenants tempted not to do so.
The government has accepted that this seems fair, with the consultation seeking a ‘reasonable balance’ between both parties.
However, RLA Wales has concerns the government will mirror English law, where it believes penalty fees are not high enough to put tenants off defaulting.
In England, the current set of permitted rent default is 3% of the rent plus Bank of England Base rate.
Using the rate payment calculator, this would put the cost of late payment of £500 for 31 days at only £1.55 at the time of going to press.
The concern here is that there is no real deterrent.
Instead the RLA would advise a reasonable interest rate is charged, set at a level charged by most credit cards/banks as a permitted payment for late rent.
It would also like to see rent payment to be included as a part of a credit history to reassure landlords tenants have a history of paying rent in full and on time.
To read the consultation response in full click here.
- RLA Director for Wales, Douglas Haig, gave evidence on the Renting Homes (Fees etc.) (Wales) Bill to the Equality, Local Government and Communities Committee, in the Senedd, during the early stages, warning it could increase costs for landlords.
- As well as submitting a formal response to the consultation on the bill, the RLA met with AMs to discuss the detail, and earlier this year encouraged members to write to their AMs about the amendments.
- You can read a timeline of the RLA’s involvement in the progression of the bill here.
- The announcement comes two weeks before the Tenant Fees Act comes into force in England, on 1 June. Landlords with properties in England can read the RLA’s guidance on the Tenant Fees Act here.
- To keep up to date with legislation changes if you are not already a member of the RLA, join over 35,000 landlords and become a member today.