March 19th 2019 has been set as the next date that the Welsh Assembly will debate the Welsh equivalent of the English Tenant Fees Ban Bill. Under the Renting Homes (Fees etc.) (Wales) Bill, Letting Agents will only be allowed to charge rent, a security deposit and a holding deposit.
The Tenant Fee Ban Bill has already gained Royal Ascent in England and is due to come into force on June 1st, 2019. It is thought that the Bill is likely to become law in Wales in September 2019 once it has been approved by the Assembly.
What does it mean for you?
As a Tenant in the private rented sector in Wales what benefits – or maybe drawbacks – are you likely to see from this becoming law in the near future? As nothing has yet been confirmed as to what will become law when the Bill passes, we can look at the English equivalent as it is likely to be very similar.
Gone are the days of paying a Letting Agent £300, £400 or in many cases upwards of £500 in admin fees just to move home. Admin fees will be no more! Any Agent that does will be subject to a hefty fine of up to £30,000.
This means that you will have more money to put towards your bond or helping in the house moving process. This is a big win for Tenants who could be paying – in some cases – a month’s rent worth of admin fees to the agent.
With the obvious loss to the agent, who is picking up the cost? After all, it is estimated that some agents could lose up to 30% of their revenue as a result of these new laws.
Well, some will transfer part of this loss on to the Landlord as part of their fees and in doing so, the Landlord, may consider putting the monthly rent up a bit. Some Agents will go out of business while others will just have to change the way that they do business. Whatever happens, it can only be good for the tenant.
Security deposits (Bonds) are to be capped at a maximum of 5 week’s rent. This means that you can no longer be asked to pay a bond amount far higher than your monthly rental. Agents can no longer increase the bond just because you have a pet at the property – or for any other reason – but they may be able to increase the rent per month to cover any costs they may incur as a result of a pet being present. Additional, if it is covered in the Tenancy Agreement that you sign, they may retain part of the bond when you come to move for items such as the deep cleaning of carpets and fumigation.
Any catches overall?
No, not really. The Tenant Fee Ban is likely to provide significant benefit to tenants moving forward but there is still a small list of fees that an Agent will be able to charge you – but only if you fail to comply with your Tenancy Agreement.
These fees will relate to cases where you don’t pay your rent on time and things like replacement keys or security devices. A full list of such fees – which are limited by the Bill – will need to be covered in the Tenancy Agreement that you sign or the Agent will not be able to charge them.
So the message is pretty clear here; meet your obligations and you can say goodbye to fees forever!
What about Holding Deposits?
In terms of Holding Deposits, they are likely to be capped at 1 week’s rent and the agent can only take one deposit per property. But be warned, if you put a deposit down on multiple properties and then pull out, you are likely to lose some or all of your Deposit.
In addition, if you provide false information on your application form or if you fail to sign paperwork within a reasonable period of time, you may also find that some, if not all, your deposit is lost.
On the other hand, if the Tenancy falls through due to the Agent or Landlord, then your deposit will be refunded to you in full. Again, full details of this will need to be covered in the documentation you sign when you hand over your deposit.
Of course, for Wales, nothing is guaranteed to pass into law unless and until the Welsh Assembly announces it. But considering the new laws that come into force in England, it is anticipated that they will be very similar.
Overall, you should save a large chunk of money both when you take out your tenancy and again when you renew it. In a few cases, there may be small rent increases, but that is more than likely easier to budget for than finding many hundreds of pounds each time you want to move.
In our opinion, this is a good piece of legislation that allows all parties to be treated fairly and goes some way towards regulating the agents that operate on the margins.
Of course, at Letability, even before this legislation comes in, we do not charge any fees if you comply with the terms of your Tenancy Agreement. Indeed, if we receive a commission or an introduction fee from a third party, not only will we tell you about it (which is the Law in any case), but we will pass it on to you – every last penny.