Under a potential new law, letting agents and landlords may be banned from charging private tenants fees in Wales. Currently, tenants could be charged fees for a range of administrative actions, such as for immigration checks, credit references or agent-accompanied viewings. However, the Renting Homes (Fees) Bill in Wales, which has gained support from Assembly Members in all political parties, proposes to prohibit the charging of fees connected to renewing, continuing or granting a standard occupation contract, with the only exceptions listed explicitly within the Bill.
Some landlords may not be acquainted with standard occupation contracts yet, but they will soon replace assured shorthold tenancies, due to the 2016 Renting Homes (Wales) Act, which will most likely be introduced in 2019. The Renting Homes (Fees) Bill gives a list of permitted payments, which include rent, as well as powers to limit the amount of holding and security deposits required, which would be reduced to the equivalent of a week’s worth of rent.
Nonetheless, many landlords and letting agents believe that this proposed new law will cause an increase in rents, as well as a negative impact economically on the lettings sector, which would include job losses. After a debate on general principles earlier this month, industry experts claimed that as the ban on fees will have such a significant impact on the PRS sector, the Committee must listen to and consider the concerns of landlords over the charges of surrender of tenancy and change of sharer. In addition to this, reference checks should be exempt, due to the importance of referencing when arranging a tenancy agreement. The concern is that if landlords are not able to cover the cost of the referencing process, the poorest and most vulnerable tenants may find it increasingly difficult to obtain suitable rented accommodation.
Although the Committee has so far supported the main principles of the Bill, a report has highlighted some issues of concern, as well as making a range of recommendations. The report has shed light on a range of unintended consequences of the Bill, where the Welsh Assembly has to now take measures to consider how to minimise the effect of the legislation on tenants, landlords and agents. These concerns are focused around the effectiveness of the enforced provisions, such as the limit on financial penalties, and also how best to make the process of repayment as straightforward as possible, when prohibited payments are made. A vital role for Rent Smart Wales was also recognised by the Committee, with the aim of effectively aiding the implementation of the Bill.
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