What does the Tenant Fee Ban mean for Wales?
The law around what tenants can be charged for in Wales when starting new tenancies has changed.
The Welsh government published its direction to letting agents and landlords ahead of the country’s fees ban, which went live on Sunday, 1st September.
The new law is broadly similar to the changes made in England back in June – such as the ban only applying to tenancies entered into after the legislation begins, including service charges or fees that may need to be paid after the start date but set out in tenancy agreements signed beforehand.
There are, however, a few key differences to the Tenant Fees Act 2019 in England.
Under the Renting Homes (Fees Etc.) (Wales) Act 2019, there are no limits on security deposits, and the default fees clause is much wider than lost keys and chasing unpaid rent.
The new tenant fees ban legislation permits eight kinds of payment including rent; a security or holding deposit; default payments (when tenants pay their rent late and have to be chased) and also payments for council tax; utilities; television licence and broadband/phone services.
The proposals state that agents are able to charge a tenant for the outstanding rent if they leave a tenancy early – something they can do now – but not for changing a contract at the renter’s request.
All other fees will be banned in Wales, including: check-in fees, exit fees as well as administration, inventory and guarantor fees, which will align Wales with both England and Scotland.
The act also makes it illegal for agents to ‘load’ fees into the rent during the early months of a tenancy.
The Renting Homes (Fees etc) (Wales) Act was given royal assent in May and while the Act outlines the types of payments agents and landlords will still be permitted, there are no details of any caps.
These will come under secondary legislation that the Welsh government hopes to have completed this year.
Since 1st September, letting agents and landlords in Wales are now only able to charge for:
- Rent
- Security deposit
- Holding deposit
- Payments in default
- Payments in respect of council tax
- Payments in respect of utilities
- Payments in respect of a television licence
- Payments in respect of communication service.
However, landlords and letting agents can use their current arrangements for these fees until the secondary legislation comes into effect.
Rightmove’s property expert Miles Shipside said: “The tenant fee changes should spell some good news for tenants in Wales, as it has in England, and it may lead to more people being able to move more often if they want to, thanks to the reduction in the cost of moving.
“What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing.”
For more information on the Renting Homes (Fees Etc.) (Wales) Act 2019 as a whole, read the Welsh government’s official literature.
