Letting Fee Ban:
The Welsh Government is introducing a Bill, which mirrors a similar one in England, a “Renting Homes Bill”, with a proposal to ban tenant fees in the Welsh private rented sector (PRS).
Under the proposed new law, as reported by the National Landlords’ Association (NLA), tenants will no longer be faced with letting fees of any kind from their landlord or letting agent. They will simply be asked to pay rent, and in some cases if the landlord requires it, a security deposits and optionally a holding deposit during the tenant screening phase.
As in the English Bill, The Tenant Fees Bill, the holding deposit in Wales would be limited to one week’s rent.
The Bill which will be along the same lines as the English one in which security deposits are proposed to be capped at six-weeks’ rent.
In Wales the Renting Homes (Fees etc.) (Wales) Bill proposes a penalty regime of fines of £500 fixed penalty, and unlimited fines and the loss of their landlord licence under certain circumstance.
Speaking on the introduced legislation, Rebecca Evans, housing and regeneration minister for the Welsh Government, has said:
“Fees charged by letting agents often present a significant barrier to many tenants, especially those on lower incomes.
“The bill will mean that tenants no longer face significant upfront fees when they start renting. In most instances they will only need to pay their monthly rent and a security deposit.
“No longer will tenants be charged for an accompanied viewing, receiving an inventory or signing a contract. No longer will they be charged for renewing a tenancy. And no longer will they have to pay check-out fees when they move out.
“I want renting to be a positive and widely accessible choice for people, and this bill will ensure that rental costs become more reasonable, affordable and transparent.”
The English Tenant Fees Bill currently passing through Parliament, slated to become law either later in 2018, or early 2019, whilst in Scotland landlords and agents have been operating under a similar banned fees regime since 2012.
The National Landlords’ Association is actively campaigning on these Bills going through Parliament and the organisation now shares similar concerns on the enforcement measures on the Welsh Bill.
NLA CEO Richard Lambert has given evidence to an English Parliamentary committee, where he has raised several concerns on behalf of landlords and agents about the Bill’s weak enforcement measures:
Mr Lambert said that for those who wilfully break the law, fines without enforcement are toothless, stating that:
“…the level of penalty is a deterrent to the law-abiding because it ensures that they will not slide into error, but for the people who are breaking the law and who factor it in as part of the cost of business, it will not matter at all, because the lack of enforcement means that they will assume that most of the time they can get away with it, and on the occasions that they cannot, it is simply a cost of doing business.”
The NLA has also argued that imposing a cap on security deposits would have unintended consequences, which could be damaging to certain groups of prospective tenants. It could also have the counter-productive effect of reducing some households’ abilities to secure suitable accommodation in the sector.
Speaking on the impact of the Renting Homes Bill, NLA Director of Policy and Practice Chris Norris said:
“Whilst tenants and applicants deserve to be treated fairly, and not unduly charged, it is disappointing that the Welsh Government seem to be adding to the enormous amount of change with which landlords in Wales are being expected to contend.
“With all of the uncertainty surrounding the introduction of the new ‘Standard Contract’ from 2019, and ongoing debate about fitness for habitation in the private sector the NLA would like to see the Welsh Government focus on getting the fundamentals right before moving onto new challenges.”
Welsh Government – Letting Fees Bill to make renting simpler and fairer – see here©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.