The Renting Homes (Fees Etc.) (Wales) Act 2019, banning landlords and agents from charging fees to tenants, will come into effect on 1 September 2019 in Wales.
The Act means that from the start of next month, landlords and agents in the principality will no longer be able to charge fees to set up or renew a tenancy in the private rented sector.
The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in Wales.
The Act makes it an offence to charge a tenant any payment that is not specified as a ‘permitted payment’ by the legislation. This means tenants cannot be charged for such things as an accompanied viewing, receiving an inventory, signing a contract, or renewing a tenancy.
The Welsh government estimates the Bill will save tenants close to £200 per tenancy.
Landlords and letting agents will only be allowed to require a payment for rent, security deposits, holding deposits, a payment in default (when a tenant breaches a contract), and payments in respect of council tax, utilities, a television licence, or communication services.
To help landlords and agents understand the changes, the Welsh government has issued fee ban guidelines. Here’s a summary:
+ The tenant fee ban only applies to tenancy agreements signed on or after 1 September 2019. For tenancies signed before 1 September 2019 the Act will apply when the term of that tenancy agreement has ended, and a new tenancy agreement is signed.
+ There is currently no cap placed on an amount of deposit the landlord or agent in Wales can accept.
+ A landlord or agent may not ask for a holding deposit of more than one week’s rent.
+ Under the ban a payment in default is a payment required by the landlord or agent arising from a breach of the tenancy agreement by the tenant.
+ A fee cannot be charged for an amendment to an existing tenancy agreement.
+ Where a tenant wants to leave a fixed-term tenancy early, the landlord or agent is fully within their rights to expect to be paid for the entirety of the tenancy. But the Act does not prohibit any agreement that a landlord and tenant may reach should the tenant wish to leave the tenancy early.