Progress is being made with plans to bring in a letting fees ban in Wales, similar to the one due to come into force in England on 1stJune. Letting agents and landlords will be banned from charging fees to tenants in the private rental sector (PRS).
The Bill banning fees charged to tenants passed its final stage in parliament last week.
Currently, landlords and letting agents can charge tenants in Wales for a range of administrative costs, including credit, reference and immigration checks.
A stop will hopefully be put to this, as the Renting Homes (Fees etc.) (Wales) Bill has gained support from AMs from all parties. It will prohibit all fees connected to granting, renewing or continuing a standard occupation contract except those that have been explicitly permitted by the Bill.
The Bill is now waiting for Royal Assent and, as soon as it has passed this stage, we expect to hear a definite date for its enforcement. It will list ‘permitted payments’, such as rent, and will change the cap for security and holding deposits, the latter of which is due to be set at one week’s rent.
It will become illegal for landlords and letting agents to charge tenants for anything other than permitted payments. These are: rent, security deposits, holding deposits, utilities, communication services, council tax, green deal charges and default fees.
However, there are worries from some that this new law could lead to rising rents, and potentially impact the lettings sector in a negative way, leading to a loss of jobs for agents.
Following a debate in Plenary on general principles last November, David Cox, ARLA Propertymark’s chief executive, commented: “A ban on fees will have a significant impact on the private rented sector. The Committee has listened on the issue of payments of utilities but further consideration is needed around charges for change of sharer and surrender of tenancy.
“Furthermore, reference checks must be exempt as referencing is really important when you’re setting up a tenancy agreement and the risk is that without any means through which to cover the cost of this process, the most vulnerable tenants will find it very difficult to secure suitable rental accommodation.”