Tenant Fees Ban Wales – update

The Renting Homes (Fees etc.) (Wales) Act 2019 will come into force in Wales on 1 September.

The Act, like the Tenant Fees Act in England, will ban landlords and agents from charging private tenants fees for the grant, renewal or continuation of a tenancy agreement. Our previous post on the Act can be read here.

The Welsh government is now consulting on making further regulations to:

  1. prescribe the description and the limits of payments in default which are to be regarded as permitted payments; and
  2. specify information that a landlord or agent should provide to a prospective tenant before a holding deposit is taken.

Payments in default

This regulation will determine additional default payments which may be permitted in the event of a tenant’s default and any limits on such payments. This regulation will establish an additional list of permitted payments in the event of a default and will ensure that a tenant is fully aware of these payments in the event of a default right from the outset.

The welsh government is seeking views on this in order to avoid excessive default payments and a negative impact on affordability and access to the private rental sector. The welsh government prefer only charging for fees that an agent or landlord has actually incurred in the event of a default. Tenants that are paying rent late may also face a late payment charge but this consultation seeks views on what limits to place on such a charge.

Information

The regulation will ensure that landlords and their agents provide specific information to a tenant prior to them handing over a holding deposit. It is hoped that the information will ensure that the tenant is fully informed prior to committing to any tenancy agreement. Tenants will not provide a holding deposit where this information is not given and landlords and agents will not be able to require a holding deposit where they fail to provide the information.

Information relating to the costs of a tenancy and the need for a guarantor should be made clear prior to taking a holding deposit because it could impact a tenant’s ability to take a tenancy. Furthermore, there will be situations where the landlord or agent must repay a holding deposit or retain it because a tenant has decided not to proceed and has failed to take reasonable steps.

Comment

The consultation will close on 19 July and any new regulations are expected to be in force either on 1 September or shortly thereafter.

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