Welsh Landlords And Agents: Be Mindful Of New Important Laws

A snapshot of the new Welsh Government legislation set to affect landlords and agents in Wales.

Designed to improve the standards of letting and management practice in the private rental sector in Wales, important new laws set to be introduced in autumn 2015 will place a legal duty on all landlords who rent out property in Wales to be registered. Further, landlords and agents will be legally required to obtain a licence when carrying out specified letting and managing activities. This new legislation will replace the existing voluntary Landlord Accreditation Wales scheme.

Registration

Subject to limited exceptions, all private landlords must register with the designated licensing authority through the new ‘Rent Smart Wales’ scheme from autumn 2015. Where there are joint landlords, all landlords have to be named on the register however the information can be inputted by a lead landlord.

Landlords will complete one process (there will be an on-line option available), pay a fee and receive one registration number which will be recognised throughout Wales. The form, content and cost of the registration has yet to be finalised.

Licensing- will all landlords need to be licensed?

A landlord will not be able to undertake any letting or management activities unless they obtain a licence or arrange for a licensed agent to act on their behalf for those activities. Agents will also need to apply for an appropriate licence.

Lettings activities include:

1. Arranging or conducting viewings with prospective tenants;
2. Gathering evidence for the purpose of establishing the suitability of prospective tenants;
3. Preparing or arranging a tenancy agreement;
4. Preparing or arranging the preparation of an inventory for the dwelling or schedule of condition of the dwelling.

Management activities include:

1. Collecting rent;
2. Being the principal point of contact for the tenant in relation to matters arising under the tenancy;
3. Making arrangements with a person to carry out repairs or maintenance;
4. Making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose;
5. Checking the contents or condition of the dwelling, or arranging for them to be checked;
6. Serve notice to terminate the tenancy.

The licence application will be made to Rent Smart Wales (again, there will be an on-line option available). The licensee must have undertaken appropriate training (yet to be finalised). Once granted, the licence holder will have to comply with a Welsh Minister approved Code of Practice which will contain the letting and management standards. The licence can be revoked if the licensee is no longer considered as being ‘fit and proper’. The licence will last for a period of five years, after which time it must be renewed and a further fee paid.

Importantly, there will be an ongoing obligation to keep up to date information on the register and licence.

The cost of obtaining a licence and the precise training landlords and agents will need to undertake in order to be awarded one will be confirmed by the Welsh Government in due course.

Penalty for non compliance

One year after the implementation of the requirement to register and obtain a licence, landlords and agents found to be ignoring their new obligations will have action taken against them which will include:

• Prosecutions in the magistrate’s courts (fine levels will vary)
• Fixed penalty notices (either £150 or £250)
• A rent Repayment Order or a Rent Stopping Order issued by the Residential Property Tribunal.

Although this legislation imposes further obligations on landlords and agents in Wales, the Welsh Government states that the benefits far outweigh the disadvantages: Standards of letting and management practice will improve, prospective tenants will have more information on landlords and the information will assist local authorities with strategic information and dissemination of information.

Fundamentally, given the implication of non compliance, it is crucial that all landlords and agents who rent out property in the private rental sector in Wales are aware of these significant new laws and take active steps to comply with them.

For up to date information subscribe to email alerts on details of the legislation as and when it becomes available on the Rent Smart Wales website: www.rentsmart.gov.wales.

For further advice, please contact our specialist property solicitors in:

• Swansea: 01792 773773
• Cardiff: 02920 22 5472
• Carmarthen: 01267 234022
• Caerphilly: 02920 860628
• Cowbridge: 01446 771742
• Haverfordwest: 01437 764723
• Fishguard: 01348 873671