On 1st September 2019, the Renting Homes (fees etc) (Wales) Act will come into force in Wales.
From this date, landlords with properties in the country 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.
A similar law on banning fees in England was introduced earlier this year, the Tenant Fees Act.
Default fees are those fees that landlords charge if a tenant defaults on their contract.
While the new guidance that has been published by the Welsh Government does mention default fees, this matter has yet to be finalized, and when the legislation is made in September, there will be a caveat for default fees where by they will continue as per normal.
Examples of types of default payments could be (but are not limited to):
- Missed appointments – such as a landlord arranging with a tenant for a contractor to carry out remedial work at a property, and a tenant subsequently refusing entry, or not being home to allow entry, resulting in charges to the landlord.
- Replacement keys – loss of keys by the tenant requiring a landlord to arrange for the cutting of new keys and delivery of those keys to the tenant.
Later this year, the issue of default fees is expected to be debated in the Senedd and this will then become part of the legislation.
You can the RLA’s recent consultation response around default fees here.
Who the fees ban in Wales will apply to:
When the Act comes into force, Government guidance states that any tenancy agreement which was entered into prior to 1st September 2019 will not be subject to the requirements of the Act.
The Act will apply when the term of that tenancy agreement has finished, and a new tenancy agreement is entered into.
Where a requirement to make a payment, grant or loan was imposed before 1st September 2019, or in respect of a requirement forming part of a tenancy agreement was entered into before that date, the ban does not apply.
In practice this means that if a tenant signed a tenancy agreement on 31st August 2019, they could still be required to pay for something which would otherwise be banned by the Act.
Guidance for landlords on the fees ban in Wales
In August, the Welsh Government published guidance for landlords and letting agents on the fees ban.
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.
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.