Most letting fees for tenants in Wales are banned under a new law which was introduced on the 1st September 2019.
Find out which fees are banned and what you will be able to do if you are charged a banned fee.
Letting fees ban
The letting fees ban applies to new assured shorthold tenancies in Wales entered into on or after the 1st September 2019.
It applies to both private landlords and letting agents.
What you can’t be charged for
A landlord or letting agent cannot charge you fees for:
- checking references or credit checks
- drawing up a tenancy
- renewing a tenancy
- amending a tenancy term, for example adding in more conditions
- requesting or amending a tenancy if one joint tenant leaves and is replaced by another
- viewing a property
- drawing up an inventory
- arranging a guarantor
- inspecting a property at the end of the tenancy.
These are all banned fees. If your tenancy includes a term requiring you to pay a banned fee, then this term is not binding on you.
If you have paid a banned fee to your landlord they cannot evict you using a section 21 notice until the money is repaid. For more information on the section 21 eviction procedure, click here.
What you can be charged for
You can only be charged fees in the following situation:
- you have broken a term of your tenancy agreement or are late paying your rent – these are known as ‘payments in default’
- you want to a reserve a property – this is known as a ‘holding deposit’ and can only be up to a maximum of 1 week’s rent.
See more about payments in default and holding deposits below.
If you want to leave a tenancy early, the landlord or agent can ask you to pay the rent for the remainder of the tenancy but cannot charge an additional ‘exit’ or ‘check-out’ fee’.
Payments in default
A landlord or letting agent can charge you a ‘payment in default’ fee if you have broken a term of your tenancy agreement.
Examples of situations where a payment in default may be charged include where :
- you have missed appointment(s)
- you have caused damage to the property
- you need a replacement key
- you are late paying your rent.
A payment in default can only be charged if the breach is specifically mentioned in your tenancy agreement. If there is no mention of the situation in your agreement, then any fee charged is a banned fee.
If you find a property you like, the landlord or letting agent may charge a holding deposit to reserve the property while they take up references (they may ask for references from your employer, bank and/or previous landlord etc.).
A holding deposit cannot be any higher than the equivalent of 1 weeks rent and a landlord or agent cannot take more than one holding deposit at a time.
If you later move in to the property the landlord or agent must repay you the holding deposit within 7 days, unless it is used towards your first monthly rent payment or towards a security deposit.
If you don’t move in to the property, or you fail to take agreed steps to move in (for example, you have failed to provide any requested information), the landlord or agent can keep the holding deposit. They can also keep the holding deposit if they believe that you have provided false or misleading information in order to get the tenancy.
If you think the landlord or letting agent has unfairly kept your holding deposit get advice. You might be able to claim it back in the county court.
Other costs of renting
You can still be asked to pay:
- rent (but there are some restrictions – see below)
- a tenancy deposit (usually one month’s rent but can be more)
- rent in advance
- council tax (if it is included in your tenancy agreement).
Your landlord can also still charge you for utilities such as gas, electricity and water if they are included in your agreement. They can’t charge you more than they pay the supplier. Your landlord can also still charge you for energy efficiency improvements under a green deal plan.
You might also have to pay for a TV licence and any phone, internet or satellite TV charges.
Restrictions on the rent you can be charged
A landlord or letting agent cannot charge you different amounts of rent each month (or week, depending on when your rent is charged). The rent must be the same for each charging period (eg: £500 each month, rather than £300 one month and £500 the next).
If you are charged extra one month (or week), then the additional amount would be banned and you would be entitled to ask for it back.
If you are happy to have different amounts of rent, you and your landlord are however entitled to agree to it.
What do I do if I’ve been charged a banned fee?
If you think you have been charged a banned fee .you should first write to your landlord or letting agent.
If you do not get a favourable response, you can complain to your local council or to Rent Smart Wales. They have the power to :
- give a notice to your landlord or letting agent telling them to show you evidence that they have kept to the rules (if they fail to give the evidence they can be prosecuted and fined)
- give a fixed penalty notice of £1,000 to a landlord or letting agent
- start criminal action to prosecute the landlord or letting agent. If found guilty of an offence, the landlord or agent could face a fine and/or have to repay any banned fee to you.
Rent Smart Wales can also consider whether the landlord or agent remains fit to continue to rent out properties in the future.
Getting a banned fee back
You can apply to the county court yourself if you have paid a banned fee to your landlord or agent.
If the court agrees that it was a banned fee they can order the landlord or agent to pay the money back.
Your council should be able to give advice on applying to the county court.
Restriction on eviction
Your landlord or letting agent cannot evict you using the ‘section 21 procedure’ if:
- you have paid a banned fee and it has not been returned, or
- they have failed to repay to you a holding deposit which should have been returned.
See our pages on eviction of private tenants for more information and get advice as soon as you can if you have received a section 21 notice.
If your tenancy began before 1 September 2019
The ban on fees will not apply to you if:
- your tenancy began before 1 September 2019, and
- you have not signed a renewal tenancy.
Your landlord or agent will still be able to charge you fees. This includes charges for:
- admin costs for things like phone calls and postage
- late payment fees
- fees for changing your tenancy.
There is no limit on how much you can be charged if your tenancy began before 1 September 2019 but letting agents must advertise their fees on their websites and in their offices. They must tell you:
- the cost of each fee including VAT
- what the fee covers.
A letting agent can be fined up to £5000 if they do not comply with these rules.
If you disagree with the fees that are being charged, or they are hidden or unclear, you can complain to the letting agency. If they do not sort out the problem tell your local council’s tenancy relations officer or contact Rent Smart Wales who can investigate for you.
Where can I get more information?
The Welsh Government has produced detailed guidance on the letting fee ban.