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Tenant Fees Ban now in force in Wales

by | Sep 9, 2019 | Brokers, Client Lenders, Clients

As of 1st September, the Renting Homes (Fees Etc.) (Wales) Act has come into force in Wales.

What the Act provides:

Sections 2 and 3 of the Renting Homes (Fees Etc.) (Wales) Act 2019 (“the Act”) create offences for a landlord or agent to require a person to make a payment which is prohibited, or to enter into a contract for services, or to require the grant of a loan in consideration of the grant, renewal or continuance of a standard occupation contract, or pursuant to a term of a standard occupation contract.

What does this mean?

  • Any payment a tenant is required to pay in relation to an assured shorthold tenancy, unless permitted by the Act, is banned and is a “prohibited payment”. This is referred to in this guidance as “the ban”.
  • Landlords and agents can’t require the grant of a loan to them, or require a person to enter into a contract for services with them as a condition of a tenancy.

When does the ban start?

The ban starts when the Act comes into force, on 1 September 2019.

Does this apply to current tenancy agreements?

No. Any tenancy agreement which is entered into prior to 1 September 2019 will not be subject to the requirements of the Act.

However, the ban does not apply where a requirement to make a payment, grant a loan or enter into a contract for services, was imposed before 1 September 2019 or in respect of a requirement forming part of a tenancy agreement entered into before that date. So a tenant who signed a tenancy agreement on 31 August 2019 could still be required to pay for something which would otherwise be prohibited by this Act.

The Act will apply when the term of that tenancy agreement has finished, and a new tenancy agreement is entered into.

What can I ask a tenant to pay (permitted payments)?

  • a. Rent;
  • b. Security deposit;
  • c. Holding deposit;
  • d. Payments in default;
  • e. Payments in respect of council tax;
  • f. Payments in respect of utilities;
  • g. Payments in respect of a television licence;
  • h. Payments in respect of communication services.

What does the Act ban (prohibited payments)?

  • Anything which is not permitted is prohibited, and banned by the Act.

Further information about the Act has been published by the Welsh government.

A similar law on banning fees in England was introduced earlier in June, the Tenant Fees Act. Earlier this summer we detailed what the Tenant Fees Act now means for landlords in England. Take a read of our blog.