This email only affects those renting properties in Wales
Not long now before new regulations come into force on 28 February 2020. Hopefully agents and landlords have had time to familiarise themselves with the regulations but here is a reminder just in case.
The Renting Homes (Fees etc.) (Holding Deposit) (Specified Information) (Wales) Regulations 2019 specifies what information would be due before a holding deposit is received by an agent or landlord of a property in Wales.
The following information is:
- amount of holding deposit,
- address of the dwelling in respect of which the deposit is paid,
- where a holding deposit is to be paid to a letting agent, the name and contact details of that letting agent,
- where a holding deposit is to be paid to a landlord, the name and contact details of that landlord,
- duration of the contract,
- proposed occupation date,
- amount of rent or other consideration,
- rental period,
- any proposed additional contract terms or proposed modifications to fundamental or supplementary terms or terms proposed to be omitted from the contract,
- amount of any security deposit,
- whether a guarantor is required and, if so, any relevant conditions,
- reference checks the landlord (or letting agent) will undertake, and
- information the landlord or letting agent requires from the prospective contract-holder.
The information must be provided to a prospective contract-holder in writing and may be given in person or provided by electronic means if the prospective contract-holder consents to receiving it electronically.
Failure to provide any of the information before accepting a holding deposit will be classed a prohibited payment and will need to be returned to the prospective tenant, even if they still wish to proceed (and would leave the agent liable for a tenant fee ban penalty).
The new regulations seem to be fairly straight forward but we can see an issue that may arise is that you would be required to give a guarantor (if required) any relevant information before a holding deposit can be taken, but at what point would you know if a guarantor is required?
Should you take a holding deposit after referencing has been completed? This then runs the risk of if the contract holder is unable to provide a guarantor they can just walk away from the property with no financial investment or loss whilst the landlord or agent has lost time, other potential viewings or referencing costs. However, agents will need to consider all options.
Renting Homes (Amendment) (Wales) Act 2016 – Bill
On 10 February 2020 a bill was been presented to the Assembly to amend 173 and 186 Landlords Notice.
Currently in Wales a landlord can serve notice at any time as long as the notice does not expire within the fixed term. The original Renting Homes (Wales) Act 2016 required that for a six month contract, notice could be served within the first four months and must be two month’s long.
However the new proposal is the notice cannot be served within the first six months of occupation and the notice period must be six months. So effectively the contract holder will be in the property for a minimum of twelve months. The six month notice period will also apply to a periodic standard contract.
Any break clause’s that are agreed must not be less the 24 months and cannot be implemented until month 18 of the contract.
This is currently only a bill so subject to debate. If or when this has been approved and what date it may come into force we will update information.