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BLOG: Letting fees in Wales: did the Welsh Government go far enough?

 

This week the Senedd passed regulations that mean private renters will be well protected from some types of letting fee – and potentially wide open to being hit by other fees.

In fact the regulations leave tenants in Wales more exposed to these fees than tenants in England.

The issue is ‘default fees’, which tenants are charged by agents and landlords for perceived breaches of tenancy. Default fees have been a huge focus for us throughout our campaigning to get letting fees banned.

The worst type of default fee, that brings us the most casework, is late payment fees. These can easily spiral into the hundreds of pounds and it’s often people on low incomes or who are vulnerable who get hit the hardest.

Thankfully, late payment fees have been capped by the regulations and in future will be charged at a strictly limited rate. The regulations also cap the amount that can be charged for replacing a set of keys, a lock or a security device.

All good so far. However – and this is where the problem lies – the regulations are silent on every other type of default fee. This means that agents and landlords are able to charge an unprescribed sum for any other perceived breach of tenancy.

It leaves agents and landlords free to start adding unrestricted and arbitrary fees into tenancy contracts for any potential breach, as long as it’s not for late payment of rent, lost keys or damaged locks.

This is not lawful in England.

‘Landlords and agents cannot write terms into your tenancy agreement that require a payment as a penalty should you fail to perform an obligation,’ says the UK Government’s guidance to tenants in England. ‘For example, any clause that says “if you fail to do x then you must pay y”, even if the amount is not specified, is likely to be prohibited.’

In England, agents or landlords who want to claim damages for tenancy breaches can do so via the court, so that the claim can be based on evidence. This is currently the case in Wales, but when the regulations come into effect on 28 April 2020 agents can bypass the court as long as they have included such charges in the contract.

It’s worth remembering that from next year in Wales, tenancy contracts will look very different. The Renting Homes (Wales) Act will mean that contracts become a comprehensive, detailed description of rights and responsibilities. It means we could end up with tenants being charged for:

  • Falling into arrears with council tax
  • Falling into arrears with energy bills, or voluntarily self-disconnecting
  • Failing to allow entry to a landlord or agent.

A tenant may be unable to cut the lawn due to a serious health issue; they may be justified in refusing entry to an agent or landlord who is harassing them; they may be understandably trying to manage energy costs by voluntarily self-disconnecting from time to time.

The decision by Welsh Government not to prescribe limits for any other default fee potentially opens up a new area of bad practice for some unscrupulous agents to rip off tenants. Because of limited public funding for this type of work, it’s going to be hard for tenants to dispute arbitrary and potentially unfair default charges.

The Welsh Government has committed to monitor the situation and revisit the regulations if it turns out bad practice is occurring. We will be keeping a close eye on how this is affecting people.

If you come across examples of tenants being charged rip-off fees, please get in touch with the Campaigns Team and let us know.

 

Campaign successess

Letting fee ban: victory for tenants and for our campaign supporters

 

This week the Senedd passed legislation to ban letting agents from charging fees to tenants.

It was a landmark day for our campaign supporters, who worked with us three years ago to build the Letting Go campaign.

Our campaigners carried out a mass mystery shop of agents across Wales – visiting high street premises, interrogating websites, and ringing agents up to gather the evidence that would one day lead to a change in the law.

The resulting report showed excessive, inconsistent and unfair fees being charged on a massive scale. For a long time it was the only evidence available in Wales on this important issue, which has made it so much harder for people to afford homes in the private rented sector.

This legislation is going to make life easier for many thousands of people. Tenants will no longer have to find hundreds of pounds in upfront fees at the start of a tenancy. The security deposit will be capped at six weeks’ rent. Any holding deposit will also be capped at one week’s rent, and fully refundable.

We’ve worked hard to influence the Bill as it passed through the Senedd. Initially we had concerns over the draft provisions for default fees. These are fees charged for ‘defaults’ by the tenant such as late rent or lost keys.

While we didn’t dispute that default fees are sometimes justified, the way that the first version of the Bill was worded would have allowed agents to charge for any perceived breach of the tenancy.

This would have created a huge loophole open to exploitation. But the Welsh Government listened to our concerns and pledged to introduce regulations.

These will define what default fees are and ensure that if tenants are charged unfair default fees, they can get their money back without having to go through an expensive and stressful court process.

So when will the new Act come into force? We still don’t know. England’s equivalent law is coming into force in June. Sadly Welsh tenants will need to wait a bit longer, but the First Minister has pledged to bring it in by September.

It’s frustrating to have to wait, but at the same time, it is so important that we get this right. Shelter Cymru has heard of some unscrupulous agents in Scotland being very ingenious and finding ways around the Scottish ban. By taking our time and getting it right we hopefully won’t be leaving the door open for exploitation of tenants in the future.

It’s good news for tenants in Wales – and it’s great news for housing campaigners. Campaigning works!

Private tenant security is a feminist issue – and here’s why

There are almost a quarter of a million women and girls living in privately rented housing in Wales.

Women face different pressures from men when they’re renting: whether it’s finding a home that’s suitable, finding a landlord who seems trustworthy, or negotiating a tenancy contract that meets the household’s needs.

Women are more likely than men to come to Shelter Cymru for help and advice with their housing situation – especially single mothers, who use our services more than any other type of household.

Last year we carried out a Wales-wide YouGov survey of 334 private tenants* which found some stark differences between the experiences of women and men living in privately rented homes. Our survey found that women private tenants were:

  • More likely to have dependent children – 33% compared to 18% of male tenants
  • More likely to have a monthly rolling contract, putting them at risk of a so-called ‘no fault’ eviction – 46%, compared to 36% of male tenants
  • More likely to have experienced poor conditions in their home in the last year – 61%, compared to 46% of male renters
  • More likely to fear revenge eviction – 10% said they hadn’t asked for repairs in their current home due to fear of eviction, compared to 3% of men.

Our survey also found that 3% of women private tenants had been asked for ‘sex for rent’ at some point. This is in line with our casework experience: we’ve given advice to multiple women who’ve been offered money off their rent in exchange for sexual favours.

The threat of a ‘no fault’ eviction is bad for all tenants, but hits women particularly hard. Insecure tenancies were all well and good in the days when private renters were mainly young professionals. These days one in three privately renting households include children, and one in eight include people aged 65 and over.

Ending ‘no fault’ evictions will help all tenants, women in particular. It’s time to sort this out. We’ve launched a campaign to ask the Welsh Government to end ‘no fault’ evictions and give private tenants the security of knowing that as long as they pay the rent and look after the place, they’ll have a home for as long as they need it.

If you care about this issue, sign our petition and share the campaign with your family and friends. Thank you.

 

* All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 334 Welsh adults. Fieldwork was undertaken between 19th July – 23rd August 2017. The survey was carried out online.

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