The Welsh Government has laid regulations on the default payments which can be charged to tenants occupying premises under an assured shorthold tenancy in the private rented sector in Wales.
The Renting Homes (Fees etc.) (Prescribed Limits of Default Payments) (Wales) Regulations 2020 (‘the Act’) come into force on 28 April 2020.
Within the Renting Homes (Fees etc.) (Wales) Act 2019, Welsh Ministers had the power to make regulations specifying the limits for certain types of payment that can be charged in the event of a default by the tenant.
Under the Act, landlords or letting agents in Wales can charge tenants:
1. Interest at a rate of 3% above the Bank of England base rate for the late payment of rent which is more than 7 days overdue; and
2. The actual cost of replacing a lost key and/or changing, adding or removing a lock to gain access to the property, as evidenced by an invoice or receipt.
These default fees are similar to those default fees permitted under the Tenant Fees Act 2019 which affect England only, however, in England there is a longer grace period of 14 days for late payment of rent before interest can be charged. In respect of the replacement of a lost key, the landlord or letting agent in England can charge the reasonable costs as opposed to the actual cost of replacing a key.
There have been updates to the template assured shorthold tenancy agreements (ASTs), lettings agency fee list and guidance notes on the Renting Homes (Fees etc.) (Wales) Act 2019, in light of these new regulations.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.