Welsh Government introduces bill to ban letting fees
The Welsh Government has introduced a Renting Homes bill proposing a ban on tenant fees in the private rented sector.
Running along similar lines to the tenant fees bill in England, those found in breach of the new rules could face a £500 fixed penalty, unlimited fines and the loss of their landlord licence under plans revealed in the ‘Renting Homes (Fees etc.) (Wales) Bill’.
Under the proposed new law, tenants who comply with their tenancy agreement will only be required to pay rent plus security and holding deposits.
Holding deposits paid to reserve properties would also be capped at one week’s rent.
Speaking on the introduced legislation, Rebecca Evans, housing and regeneration minister for the Welsh Government, said: “Fees charged by letting agents often present a significant barrier to many tenants, especially those on lower incomes.
“The bill will mean that tenants no longer face significant upfront fees when they start renting. In most instances they will only need to pay their monthly rent and a security deposit.
“No longer will tenants be charged for an accompanied viewing, receiving an inventory or signing a contract. No longer will they be charged for renewing a tenancy. And no longer will they have to pay check-out fees when they move out.
“I want renting to be a positive and widely accessible choice for people, and this bill will ensure that rental costs become more reasonable, affordable and transparent.”
The UK government introduced its own bill to ban letting fees to parliament last month, while the charges were banned in Scotland in 2012.
The NLA are actively campaigning on the bills legislative counterpart in England currently going through parliament and share similar concerns on the enforcement measures on the Welsh bill. Last week, NLA CEO Richard Lambert gave evidence to the parliamentary committee, in which he raised concerns about the bills weak enforcement measures:
Richard responded that for those who wilfully break the law, fines without enforcement are toothless, stating that:
“…the level of penalty is a deterrent to the law-abiding because it ensures that they will not slide into error, but for the people who are breaking the law and who factor it in as part of the cost of business, it will not matter at all, because the lack of enforcement means that they will assume that most of the time they can get away with it, and on the occasions that they cannot, it is simply a cost of doing business.”
The NLA has also argued that imposing a cap on security deposits would have unintended consequences, which could be damaging to certain groups of prospective tenants. It could also have the counter-productive effect of reducing some households’ abilities to secure suitable accommodation in the sector.
Speaking on the impact of the Renting Homes Bill, NLA Director of Policy and Practice Chris Norris said:
““Whilst tenants and applicants deserve to be treated fairly, and not unduly charged, it is disappointing that the Welsh Government seem to be adding to the enormous amount of change with which landlords in Wales are being expected to contend.
“With all of the uncertainty surrounding the introduction of the new ‘Standard Contract’ from 2019, and ongoing debate about fitness for habitation in the private sector the NLA would like to see the Welsh Government focus on getting the fundamentals right before moving onto new challenges.”