A new Welsh Government law which aims to make things simpler and fairer for tenants comes into force today.
The law means it is now 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 law will save tenants, on average, almost £200 per tenancy. The changes only apply to assured shorthold tenancies.
Letting agents and landlords are now only permitted to require a payment for rent, security deposits, holding deposits, a payment in default (when a tenant breaches a contract), and payments related to council tax, utilities, a television licence, or communication services.
The law caps holding deposits paid to reserve a property before the signing of a rental contract to the equivalent of a week’s rent and creates provisions to ensure their prompt repayment. It also gives the Welsh Government the power to limit the level of security deposits should it need to in the future.
The changes are backed up by a clear, simple and robust enforcement regime to deal with breaches. Fixed penalty notices of £1,000 may be issued against anyone seeking a prohibited payment. If penalties are not paid, alleged offences can be prosecuted. For serious offences, an enforcement authority could decide to proceed directly to prosecution.
Most offences carry a fine which is not subject to any statutory limit. Rent Smart Wales will be notified of any prosecution, which they can take into account when considering suitability to hold a licence – without which an agent or landlord cannot let or manage properties in Wales.
Housing and Local Government Minister Julie James said:
A significant proportion of people in Wales live in private rented housing, and it is vital that they can be confident they are getting a fair deal. I want renting privately to be a positive choice which is accessible to everyone.
The fees being charged by some lettings agents and landlords have been highlighted by many as the main barrier to accessing good quality rented housing. Some tenants have faced finding initial fees of hundreds of pounds on top of their security deposit and up-front rent.
Our new law aims to ensure that renting in Wales become more reasonable, affordable and transparent and tenants will no longer face sometimes significant and unreasonable upfront fees when they start renting.