The Welsh Government has laid regulations on the maximum permitted level of default fees landlords in Wales will be able to charge when a tenant requires keys to be replaced, locks to be changed, or is late paying the rent.
Draft Regulations around ‘default’ fees were laid by the Welsh Government on Tuesday and are due to come into force on 28th April 2020 (unless revoked). They will go before the Assembly to be approved on 25th February.
What can be charged for replacing keys or changing the locks
From 28th April, landlords in Wales will only be able to charge tenants for the actual costs of replacing keys and changing, adding or removing a lock.(evidenced via an invoice or receipt)
What can be charged for late payment of rent
The regulations state that landlords will be able to charge for late payment of rent this but only after seven days-meaning nothing can be charge in respect of late rent before this. Landlords will be able to charge the Bank of England base rate, plus 3% on an APR basis. (the calculation formula can be found in the Explanatory Memorandum).
This differs to the situation in England, where under the Tenant Fees Act landlords can’t charge for late payment of rent until after a longer period of 14 days.
Commenting on the regulations, RLA vice-chair and director for Wales Douglas Haig said:
“We do welcome the positive recognition made by the Welsh Government of the evidence that suggests that the market is functioning well and the range of default payments currently being applied across the sector is not excessive and it will, therefore, restrict the specific areas it will regulate to just late rent and keys/locks.
“However, as we illustrated in our consultation response, banning landlords from charging for their time to fix locks or replace keys costs them precious time.
“Additionally, the proposed method of charging late rent fees is totally inadequate and ceases to be a deterrent from non-payment. The seven day period before late rent fees can be charged defies reality as mortgage companies, banks, and the rest of the lending industry will not treat landlords with such leniency.
“So while limiting the scope of what has been regulated is positive, the areas where new rules have been created is totally imbalanced and is, sadly, a continuation of the hostile attitude towards landlords increasingly demonstrated by policy-makers.”
The Wales fees ban
As of Sunday 1st September 2019, landlords with properties in Wales entering into new tenancies will only be able to charge for:
- Security deposit
- Holding deposit (one weeks rent)
- Payments in default
- Payments in respect of council tax
- Payments in respect of utilities
- Payments in respect of a television licence
- Payments in respect of communication service.
Unlike the fees ban in England, the fees ban in Wales has been phased in gradually, with matters such as default fees not in force yet.
Regulations around holding deposits information
Last month, new regulations demanding landlords in Wales give comprehensive information packs to prospective tenants before accepting holding deposits were withdrawn and an amended version will now come into force in February, following campaigning by the RLA.