Payment of Fees on Renting Homes in Wales and in England

5th June, 2019

On 15 May 2019, the Renting Homes (Fees etc.) (Wales) Act 2019 received Royal Assent. It applies in Wales only, and the operative provisions will come into force on a date to be appointed. The Welsh Government plans for them to come into force on 1 September 2019.

The Wales Act follows in the wake of similar legislation in England, which came into force on 1 June 2019 and similarly restricts the ability of landlords and letting agents charging certain fees to tenants and prospective tenants (excluding social housing and long leases) and student accommodation in England. The result is to produce a similar but not a mirror regime for Wales and for England.

The changes apply in relation to standard occupation contracts. These will replace assured shorthold tenancies and licences when the relevant provisions of the Renting Homes (Wales) Act 2016 come into force, expected later in 2019. The Act provides that regulations may be passed to make transitional arrangements for assured tenancies.

Permitted payments will be limited to rent, security deposits, holding deposits, payments in the event of default and payments for utilities. Other payment required as a condition of the grant, renewal or continuance of the occupation contract will be prohibited. In certain cases, payments will only be permitted where they fall within appropriate limits: for example, holding deposits.

If an occupation contract provides for payment of a prohibited payment, that term will be non-binding. If a landlord or letting agent requires a prohibited payment to be made, they will be liable on summary conviction to a fine, or a fixed penalty notice may be issued. The landlord’s ability to terminate the occupation contract will also be restricted.

As ever with the law the devil is in the detail, but it is anticipated that there will be a number of issues where further clarity will potentially only be gained after court action, in the meantime landlords and their agents should consider the terms of the legislation for Wales and for England and make sure that they comply with the new legislation.

If you have any further questions or would like more information on this matter, please contact Simon Ellis, Partner and Head of Real Estate.

Simon Ellis Head of Real Estate Partner Email: [email protected] Tel: 01244 405 516

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