A Bill banning fees charged to tenants by letting agents and landlords will become law, after passing its final stage today.
The Renting Homes (Fees etc) (Wales) Bill was debated for a final time in the plenary, and now is awaiting Royal Assent.
The Renting Homes (Fees etc) (Wales) Bill
The Bill was formally introduced by the Welsh Government last year by the previous Housing Minster, Rebecca Evans AM. It will ban most fees paid by tenants to letting agents and landlords during the course of a tenancy.
This means that it will be illegal for landlords and letting agents to charge anything other than permitted payments, which are: rent, security deposits, holding deposits, utilities, communication services, council tax, green deal charges and default fees.
With powers to regulate limits on the amounts that can be collected on Security Deposits and Default Fees.
Note unlike England, there are no limits set yet, but the Bill provides powers to regulate if needs be at a later date.
The industry as a whole will be monitored and if there is a call to limit such permitted payments then the Bill provides the powers to do so.
At Stage 3 of the Bill’s progression last week, several amendments were approved by assembly members.
At the end of a contract, landlords and letting agents will not be allowed to charge exit fees. This does not include an early surrender of a tenancy or where the contract-holder leaves without providing the required notice.
Gaining Possession restrictions
If a letting agent or a landlord has charged a contract-holder a payment that is prohibited, and this has not been fully refunded, then the Renting Homes(Wales) Act 2016 has been amended to disallow letting agents and landlords from issuing a contract holder with a notice for possession.
Under the legislation, any payment of a holding deposit that exceeds the equivalent of one week’s rent, will be classed as a prohibited payment. This means that it must be refunded. Once a prospective contract-holder has paid the holding deposit, the letting agent or landlord must not advertise the property to other potential tenants. In addition to this, under the legislation the same person who received the holding deposit must be the person who repays it.
The RLA has been heavily active in the progression of this Bill, and will be publishing resources for landlords on the Bill in due course.
Soon after it was formally introduced by the Welsh Government last year, the RLA provided a briefing to all members of the Assembly. The then Housing Minister Rebecca Evans AM, found our briefing ‘constructive’ and vowed to continue to work with us on the Bill so that our concerns were aired.
During the early stages of the Bill, the RLA’s 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.
In September, RLA Wales further responded with a written reply to the consultation on the Renting Homes (fees etc.) Wales Bill. Airing similar comments made by our Director Douglas Haig and highlighting the unintended consequences of the application of the Bill on rural communities and access to services for tenants and landlords.
In November last year, the RLA responded to a consultation which was run by the Welsh Government, on the Renting Homes (Wales) Act 2016 – regulations relating to Supplementary Provisions.
The RLA has also met with several AMs to discuss the details of the Bill, and earlier this year, ahead of the stage three debate of the Bill, the RLA encouraged members to write to their AMs about the amendments to the bill.
Several letters were received including a number from the First Minister. RLA Wales further discussed legal concerns with the Bill with the Welsh Government’s department on the Private Rented Sector. Such concerns as the removal of ‘Right to Rent’ provisions in the schedule relating to Holding Deposits which would severely disadvantage Welsh landlords with their English counterparts if Right to Rent came to Wales. Something that we hope never happens and now may never will with our recent victory on right to rent (link here).
It comes as a similar ban on fees is due to come into force in England on 1st June. You can read the RLA’s guidance on the Tenant Fees Act in England here.
Similar guidance for Welsh Landlords will be published soon.