The RLA has warned that banning letting agents from charging tenants fees in Wales would only serve to make life more difficult for the most vulnerable.
Those breaching the new rules could face a £500 fixed penalty, unlimited fines and the loss of their landlord licence under plans revealed as part of the ‘Renting Homes (Fees etc.) (Wales) Bill’.
Similar proposals, banning agents from charging fees and capping security deposits at six weeks rent in England are currently passing through Parliament. The RLA gave evidence to a Select Committee on the issue last week.
Welsh Housing Minister Rebecca Evans said most tenants should only be asked to pay a month’s rent and a security deposit, with the bill including provisions to limit deposits charged.
She said: “Fees charged by letting agents often present a significant barrier to many tenants, especially those on lower incomes.”
However, the RLA warned it is these tenants that will be the most likely to suffer as a result of a ban – with landlords less likely to take on tenants who are more of a risk. Tenants with pets could also suffer as a result.
The RLA said that although it is not surprised the Welsh Government has echoed Westminster by seeking to introduce a ban, the move will simply place further pressure on landlords to increase rents to cover the costs set by letting agents.
Douglas Haig, RLA Director for Wales said: “Ultimately it will increase the pressure on the most vulnerable in Wales as they will no longer get the assistance from agents to obtain a tenancy.
“It will also shift costs onto long term tenants who have enjoyed incredibly low rent rises way below inflation for many years.
“We had hoped that the Welsh Government would look to work with the sector to create a solution that allowed it to continue to provide the improvements in service and quality that we have seen over the last decade instead of jumping on a Westminster Government policy.”
The association welcomes the Welsh Government’s decision to allow flexibility with the time holding deposits may be retained.
Sometimes documentation isn’t readily available to the tenants, so this will allow time for both parties to enter a tenancy contract.
However, it does have concerns over the ambiguity surrounding ‘prescribed limits’ for security deposits.
Mr Haig added: “We have concerns that with severe penalties in place for those charging prohibited payments that there is insufficient clarity regarding security deposits.
“There is no clarity in the proposed Bill as to what a ‘prescribed limit’ will be.
“The RLA believes that such an amount should be clarified within the Bill before enactment and not allowed to be determined by regulations brought in later.
“Further we are disappointed that the Welsh Government has not sought to take the opportunity to introduce provisions for passport deposits or to enable a portion of the deposit to be passported from the first tenancy to the next one.
“This would lessen the burden on tenants when the time comes to move to another rental home.”