A new Welsh Government Bill which aims to make things simpler and fairer for tenants has been passed by the National Assembly for Wales.
The Bill will make 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. It is estimated the Bill will save tenants almost £200 per tenancy.
Letting agents and landlords will only be permitted 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.
The Bill will cap holding deposits paid to reserve a property before the signing of a rental contract to the equivalent of a week’s rent and create provisions to ensure their prompt repayment. It will also give the Welsh Government the power to limit the level of security deposits.
A clear, simple and robust enforcement regime to deal with breaches of the legislation will be created. Fixed penalty notices may be issued against anyone seeking a prohibited payment. If penalties are not paid, alleged offences can be prosecuted through the Magistrates Court and could result in an unlimited fine. Rent Smart Wales will be notified of any offence, which they can take into account when considering whether to grant or renew a licence – without which an agent or landlord cannot let or rent properties in Wales.
Housing and Local Government Minister, Julie James said:
The private rented sector now accounts for 13% of all housing in Wales. It is a very important part of housing provision in Wales and this legislation brings clarity which will improve the reputation of the sector overall, and give people greater confidence that they are getting a fair deal. I want renting privately to be a positive choice which is accessible to all.
The fees being charged by some lettings agents and landlords have been highlighted by many as the main barrier to people accessing good quality rented housing with some tenants facing fees in excess of £200 on top of their security deposit and rent. This Bill will ensure these rental costs become more reasonable, affordable and transparent and tenants will no longer face sometimes significant and unreasonable upfront fees when they start renting.
Once the Bill receives Royal Assent, changes to what can and cannot be charged for will be made ahead of the new academic year, meaning that tenants moving properties, or people renting for the first time, will see a substantial saving within a matter of months.