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Agent’s fees – Wales cont’d

This is our second post on the Welsh Government’s report on Agent’s fees. Our first post can be read here.

In our last post, we advised that the report recommended a ban on agent’s fees along with a number of other recommendations. Given that this ban is very likely to be introduced in England we think it is important to list those recommendations for our readers.

  1. Renewal fees and tenancy termination fees (excluding those for leaving early) should be included in any new ban, because current legislation may not be sufficient to prevent these charges.
  2. Any change in rents should be monitored over the two years following a ban, including the implications for tenants on Local Housing Allowances.
  3. A small holding deposit (such as one week’s rent) should be considered by the Welsh Government in order to ensure tenants show some financial commitment before agents are required to take a property off the market.
  4. Charges for replacing lost keys or failing to be in when a contractor calls, should legitimately be charged for at cost. These charges could be capped at the actual costs due to locksmiths or contractors for example, with the letting agent’s time in managing such events falling within the management fee paid by the landlord.
  5. Agents and landlords should be allowed to charge tenants who want to be released early from a contract. But this release should not be subject to landlords or agents finding a replacement tenant or the original tenant paying for re-advertising the property.
  6. Legislation should also address the likely consequence of tenants being asked to produce their own credit check and references when applying for a property. Evidence from Scotland suggests that credit check fees in these circumstances can be very low and the whole process generally much quicker. Some vulnerable tenants may need support with this process.
  7. Any ban on fees should be well publicised.
  8. If a ban is implemented, enforcement will need to be proactive to be effective. Tenants should not be put in a position where they are forced to agree to pay an illegal fee in order to find somewhere to live.

Comment

The Welsh ban has similarities to that being proposed in England. However, it also has differences. Notably, the proposals around the ability to end tenancies early which is similar to concepts that have been advanced in the Renting Homes (Wales) Act. It remains to be seen exactly how the ban will work out in England and Wales but it is clear that they will not be exactly the same. Agents should keep a close eye on the situation but avoid making rushed decisions until the exact shape of a fee ban is clear.

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