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.
The language of the Welsh Act is largely the same as the Tenants Fees Act with Schedule 1 also listing the Permitted Payments as follows:
- Security Deposit
- Holding Deposit (limited to 1 week’s rent)
- Payment in the event of a Default (defined as a failure to make a payment by the due date to the landlord or a breach of a contract term)
- Payment in respect of Council Tax
- Payment in respect of provision of utilities
- Payment in respect of television licence
- Payment in respect of communication service
It should be noted that Permitted Payments under the Welsh Act differ from the Tenant Fees Act in the following way:
- The Tenant Fees Act limits deposits to 5 weeks where the annual rent is £50,000 or less and 6 weeks where the annual rent is above £50,000. The Renting Homes Act currently has no such cap. However, there is a Consultation in Wales on further regulations to allow other payment areas which may include changes to security deposits.
- Default fees under the Tenant Fees Act are only recoverable where rent is late by more than 14 days or to pay for the replacement of a key or other security device.
- The Tenant Fees Act permits payments for the variation or termination of a tenancy agreement.
The differences between the Tenant Fees Act in England and the Renting Homes Act in Wales should be noted especially by agents who have offices in both jurisdictions. It is important that agents and landlords are familiar with the schedule of permitted payments in both jurisdictions and that they are applied correctly to avoid a breach. Enforcement in the event of a breach differs in the 2 jurisdictions with Wales taking a harder line approach.