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Landlords in Wales must not ‘fall foul of their new compliance obligations’

With just a few days until the Welsh tenant fee ban is introduced, landlords in Wales are being urged to adapt to the new rules to avoid prosecution. 

Letting agents in Wales will be particularly affected by the change, as was the case in England when the Tenant Fees Act came into effect on 1st June 2019. 

With Welsh letting agents facing a loss of, on average, £181.15 in fees per tenancy, the legislation is likely to result in a major shakeup for letting agents and landlords, as well as a new rental reality for tenants.

According to Goodlord’s recent State of the Industry survey, more than 90% of agencies are predicting a loss in annual revenue following the law change, with most surveyed estimating losses of up to 30%. A ban has been in place in Scotland since 2012.

The key differences in the Welsh legislation, from its English equivalent, are that there will be no limit to security deposits in Wales, while the Welsh legislation could prescribe default charges which go beyond just missing and damaged items or unpaid rent. They could go on to include missed appointments and instances where a landlord is contacted out-of-hours. 

Going forward, Welsh tenants will also be shown a draft copy of their AST agreement automatically via the platform. Agents can also agree to an extension on holding deposits with a tenant upfront and include it as part of the tenancy guide, remaining compliant with the new rules.

Under the new legislation, landlords or agencies found charging banned payments, face an initial fixed penalty notice of £1000. If not paid, local authorities and the licensing authority, Rent Smart Wales, are able to prosecute.

William Reeve, CEO at Goodlord, said: “It’s imperative that all parties understand how this new ban will affect them. They will need to be prepared for any changes going forward and make sure they don’t fall foul of their new compliance obligations. 

“Despite the government’s final guidance for tenants, landlords and agencies only being released a few weeks before the ban comes into effect, those who flout or fall foul of the new rules can’t rely on leniency. 

“It’s vital that everyone affected gets on top of the legislation quickly, before turning to necessary measures to protect their revenues or promote their new rights.”

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