The Renting Homes (Fees etc.) (Wales) Act 2019 (‘the Act’) received Royal Assent on 15 May 2019 and is due to come into force in Wales on the 01 September 2019.
The purpose of this Act is to make costs more transparent and to make the private rented housing market in Wales more accessible to tenants who often struggle to meet up front costs.
This Act is similar to the Tenant Fees Act 2019 (which affects landlords and letting agents in England) in that it bans letting agents and landlords in Wales charging anything other than ‘Permitted Payments’ (defined by the Act) in consideration of the grant, renewal or continuance of a ‘standard occupation contract’.
Standard occupation contracts are to be introduced by the Renting Homes (Wales) Act 2016 (when the relevant sections of the Renting Homes (Wales) Act 2016 come into force) and will replace assured shorthold tenancies. The Act allows ministers to make regulations to apply the provisions of the Act to assured tenancies and assured shorthold tenancies if the Renting Homes (Wales) Act 2016 has not been commenced when the bill comes into force.
It is important to note that if a landlord or letting agent in Wales is in breach of any part of the Act, they will be guilty of a criminal offence (in England a criminal offence will only be committed for a second breach if it occurs within five years of the first). However, a local authority in Wales may impose a civil penalty of £1,000 as an alternative to prosecution. Any prosecution or penalty will also be reported to Rent Smart Wales. This may result in a landlord or agent losing their authorisation.
There are provisions in the Act which empower ministers to make further regulations.
The Welsh Government has issued a consultation on two sets of further regulations: (1) Default fees (permitted amounts and when they can be charged); and (2) Prescribed Information to be provided to Tenants when taking a holding deposit.
The Welsh Government wish to achieve a list of default payments which are permitted to be charged so that tenants know what costs may be charged if they breach their tenancy agreement. The consultation provides a list of categories the government consider to be relevant.
They also wish to ensure that a tenant is provided with all relevant information prior to entering into a tenancy agreement and before handing over a holding deposit.
The consultation seeks views from landlords, tenants and letting agents. The consultation closes on the 19 July 2019.
You can respond online here.
Following the consultation further legislation will be issued and guidance on the regulations will be produced by the Welsh Assembly in due course. In the interim landlords and letting agents in the private rented sector in Wales need to consider their current business models carefully and begin to prepare for these legislative changes.
Here at Simply-Docs we will be producing further guidance and updated documents on this Act which will be produced before it is due to come into force.