NLA launches Welsh fee ban FAQs
The NLA has launched a comprehensive guide on the Renting Homes (Fees etc.) Act, containing answers to the most commonly asked questions on the new legislation.
What are the key changes?
The Act will bring an end to upfront fees charged by landlords and agents to their tenants. It will also limit the levels of holding deposits at one week’s rent, the Act also gives the Welsh Government power to implement a cap on security deposits in the future.
The Act will apply in Wales only.
This means landlords in Wales will no longer be able to charge for many services provided to the tenant, including:
- Security deposit
- Holding deposit. This is refundable, and capped at one week’s rent
- Payments in default – payments due for late payment of rent, or when a tenant has breached their tenancy agreement
- Payments in respect of council tax
- Payments in respect of utilities – including Green Deal loan repayments
- Payments in respect of a television licence
- Payments in respect of communication services
Note: Default Fees and late payments are still currently subject to consultation with definitions being made by secondary legislation hopefully later this year. The Act will commence without any definitions or limits for late payments (including interest rates).
Will there be a transition period?
There will be no transition period for existing tenancies, which means that any tenancies agreed or renewed after 1st September will be subject to the new rules.
You must make sure that any tenancy agreements are up-to-date and reflect the provisions around fees. NLA members can always access the most recent version of our Assured Shorthold Tenancy agreement via NLA Forms.
What are the penalties for breaching the ban?
For landlords who are found to be in breach of the fee ban, a fine of £2,500 will be issued for an initial breach of the ban. It will be a criminal offence if an individual has been fined or convicted of the following offence:
- requiring a tenant to make a prohibited payment, or
- requiring a tenant to enter into a contract for services in relation to a tenancy, or
- requiring a tenant to make a loan in relation to a tenancy, or
- providing false or misleading information in relation to a notice issued seeking information.
- Judges may also order repayment of any unpaid prohibited payment or holding deposit on conviction of an offence.