Welsh Government provide updates clarifying ban on fees rules

The changes to the guidance is in relation to Payments for change of sharer and Payments for amendment to a tenancy agreement.

Change of sharer

The change has been made to clarify that the Act prohibits a landlord from contractually requiring a payment for change of sharer. The Act does not however, prohibit any agreement outside the contract that a landlord and tenant may reach should a tenant wish to leave a tenancy early. 

Payments for amendments

The change for variation of contract was made to clarify that the Renting Homes (Fees etc.) (Wales) Act 2019 prevents a landlord or agent from contractually requiring a payment from a tenant in relation to the variation of a tenancy agreement. This was due to queries relating to the fact that the Act does not specifically mention “variation” as a function by which payments are prohibited.

However, sections 2(1)(b) (landlords) and 3(1)(b) (letting agents) of the Act prevent tenants from being required by tenancy agreements to make prohibited payments. The effect of these sections is that any payment of money under a tenancy agreement is prohibited, unless the Act treats the payment as a permitted payment. So provision in a tenancy agreement that purports to require payment of a fee to a landlord for a subsequent variation of the agreement will contravene section 2(1)(b). This is because the payment doesn’t fall into either of the two exceptions to the general rule prohibiting payments in section 4 of the Act.

Renting Homes (Fees etc.) (Wales) Act

On Tuesday 12 June 2018 the Welsh Government introduced the Renting Homes (Fees etc.) (Wales) Bill to ban fees charged in the private rented sector. During the legislative process, the Act has been amended. The Act will: 

• Ban tenants from being charged for an accompanied viewing, receiving an inventory, signing a contract, exit fees or renewing a tenancy.
• Allow letting agents and landlords to only charge fees relating to rent, security deposits, holding deposits, utilities, television licence, communication services, Council Tax and payments in default.
• Provide a regulation-making power to limit the level of security deposits.
• Cap holding deposits to the equivalent of one week’s rent.
• Create a clear, simple and robust enforcement regime for when offences occur.