Most letting fees for contract-holders in Wales are banned.
Letting fees ban
The letting fees ban applies to new renting agreements in Wales entered into on or after the 1st September 2019.
It applies to any standard occupation contracts. This is the type of renting agreement used by private landlords, and means that private landlords and letting agents are not allowed to charge fees for most things. It also means that community landlords cannot charge fees for standard contracts.
What fees are banned?
A landlord or letting agent cannot charge you fees for:
- checking references or credit checks
- drawing up a written occupation contract
- renewing an occupation contract
- amending term of the agreement, for example adding in more conditions
- requesting or amending a contract if one joint contract-holder leaves and is replaced by another
- viewing a property
- drawing up an inventory
- arranging a guarantor
- inspecting a property at the end of the occupation contract.
These are all banned fees. If your occupation contract 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 ‘no fault’ notice until the money is repaid. A ‘no fault’ notice means a section 173 notice, a section 186 notice or a ‘landlord’s break clause’ notice. For more information on the eviction procedure for standard contracts, click here.
What you can be charged for
You can only be charged fees in the following situations:
- you have broken a term of your occupation contract and the landlord or agent is entitled to charge a ‘default payment’ (see below)
- you are late paying your rent (see below)
- you want to a reserve a property and the landlord or agent is charging a ‘holding deposit’.
- If you want to leave an occupation contract early, the landlord or agent can ask you to pay the rent for the remainder of the contract, although they may only ask you to pay for reasonable costs relating to beginning a new occupation contract with a replacement contract-holder. You cannot be charged an additional ‘exit’ or ‘check-out’ fee’.
A landlord or letting agent can charge you a ‘default payment’ if you have broken a term of your occupation contract.
A default payment can only be charged if there is a specific term in the contract allowing for such a payment. If there is no mention of the situation in your contract, then any payment charged is a banned fee. Any demand for a default payment should be made in writing.
The amount that a landlord or letting agent can charge you for replacing a lock, key or other security device is limited to the the actual cost of the replacement. You should ask your landlord or letting agent to show you the receipt or invoice for the cost of replacement before you pay it.
Fees for late payment of rent
A landlord or letting agent can charge you a fee if you are late paying your rent.
The amount you can be charged for late payment is limited:
- you must be at least 7 days late with paying your rent before a fee can be charged
- any interest charged must not be more than the Bank of England’s base rate plus 3% APR. For example, a 30-day late payment of rent of £600, at a Bank of England base rate of 0.75%, plus 4.5%, would result in a charge of £3.70. You can check the base rate here.
Any late payment fee over these limits is a banned fee.
If you think you are going to be late paying your rent, for example, there is a delay in your benefit claim, make sure you tell your landlord as soon as possible. They are more likely to be sympathetic and not charge you a fee if they know it is going to be paid soon.
Other costs of renting
You can still be asked to pay:
- rent (but there are some restrictions – see below)
- a security deposit (usually one month’s rent but can be more)
- rent in advance
- council tax (if it is included in your occupation contract).
Your landlord can also still charge you for utilities such as gas, electricity and water if they are included in your contract. 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.
Restriction on eviction
Your landlord or letting agent cannot evict you using the ‘no fault’ eviction 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 a full list of information you must be given before a landlord can serve a ‘no fault’ notice in our pages on eviction by a private landlord.
Get help as soon as you can if you have received a notice.
If your renting agreement began before 1 September 2019
The ban on fees will not apply to you if:
- your agreement began before 1 September 2019, and
- you have not signed a renewal agreement.
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 renting agreement.
There is no limit on how much you can be charged if your renting agreement 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 housing department or contact Rent Smart Wales who can investigate for you.
Where can I get more information?
Use our toolkit to find out what you can do if you have been charged a banned letting fee.
The Welsh Government has produced detailed guidance on the letting fee ban.