Tenant Fee Charges Abolished in Wales

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It seems a very long time since I was warning that Shelter had adopted the issue of the tenant fee charges tenants had to pay as unreasonable; I was wrong at the time, in that I thought this would become another of their well-publicised and greatly biased campaigns in the near future.

Perhaps the issues of Universal Credit, Right to Rent and the problems these have created have exercised Shelter so much that their campaign on this has been very low-key, but clearly something has been going on in the background and this will be the next big change some landlords have to contend with.

Tenant fee charges will have to go, and whilst England had the first sitting of the Tenant’s Fees bill on 5th June, the Welsh Assembly has already enacted legislation under the Renting Homes (Fees etc.) (Wales) Bill. This will limit what a landlord or agent can make tenant fee charges for. 

Fees can no longer be charged for viewing a property, signing a contract, providing an inventory or renewing a tenancy. Whilst some argument could be made for drawing up and signing a contract, taking time to ensure the tenant understands it, an inventory is really common sense and protects both landlord and tenant, so expecting the tenant to pay seems unreasonable. As most tenants want to have a long-term home and landlords want the same, why a charge should be made for renewing the tenancy seems inexplicable.

  • The regulations will have the power to limit the level of security deposits, though does not specify at what figure that will be.
  • Holding deposits can be high and there may be difficulty in recovering it, should a tenancy not proceed. They will now be capped at 1 week’s rent and there will be clearly stated provisions for their prompt re-payment.
  • There will be a robust enforcement system when offences occur, with a penalty of £500 per offence. (This may be the weak point in the new rulings, as it has been in England).

Rebecca Evans, the Housing and Regeneration Minister in the Welsh Government, has said ‘Fees charged by letting agents (and landlords) 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’. She also states that ‘I want renting to be a positive and widely accessible choice for people, and this bill will ensure that rental costings become more reasonable, affordable and transparent’.

So good news for Welsh tenants and likely to be good news for tenants in England once the tenant fee charges legislation is passed, though unlikely to come into force until next year.

Whilst I understand why various bodies have sympathy with the tenants, what of the landlord? Because some of these charges were justified, if perhaps at a lower level than has been seen. What about the landlord who has to leave work to do frequent, unsuccessful viewings? What of the landlords who have chosen not to take deposits but instead asked for an administration fee, generally far less than a deposit? Some prospective tenants may find that the charge paid by the sister or friend, is now converted to a month’s deposit. Payment of an administration fee may be a sign of good faith, that they can provide something to the landlord.

Well done, Wales, you beat England to it, but be aware that like most legislation, there is always another side who will challenge it as unfair, and some landlords, trying to be fair to vulnerable tenants, may now find themselves without any kind of safeguard. Will they continue to take them?

For advice on buy to let issues – Ask Sharon