Welsh Regulations on Holding Deposits
The Welsh Government has passed new regulations on the information to be provided before a holding deposit can be taken by a landlord or a letting agent to secure a tenancy.
The Renting Homes (Fees etc.) (Holding Deposit) (Specified Information) (Wales) Regulations 2019 come into force on 28 February 2020.
A holding deposit may be charged to a tenant to secure a property prior to signing an assured shorthold tenancy agreement. A landlord, or letting agent on their behalf, can still charge a holding deposit to reserve a property whilst suitability checks are carried out on the prospective tenants, but no more than one week’s rent can be charged.
Under the Renting Homes (Fees etc.) (Holding Deposit) (Specified Information) (Wales) Regulations 2019, landlords and/or agents in Wales must provide the following information to tenants before collecting a holding deposit on or after 28 February 2020:
- 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 the fundamental or supplementary 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 above ‘Specified Information’ must be provided in writing and may be given in person or sent electronically where the tenant consents to this.
If the holding deposit is collected without all the Specified Information being provided, the holding deposit must be repaid to the tenant, even where the tenant fails to take all reasonable steps to enter into the tenancy and where the tenant notifies the landlord that they do not wish to enter into the tenancy.
A new ‘Agent’s letter to Prospective Tenant Sending Specified Information (Wales)’ has been added to the portfolio. Furthermore, a new ‘Landlord’s letter to Prospective Tenant Sending Specified Information (Wales)’, has also been added to the portfolio. These templates set out the Specified Information required, and which can be sent to prospective tenants before a holding deposit is collected.
There have been updates to the Holding Deposit Agreements (Wales), tenancy application forms, existing guidance notes on the Renting Homes (Fees etc.) (Wales) Act 2019 and existing guidance notes on tenancy deposits, in light of these new regulations.
The Residential Lettings Terms and Conditions have been updated to incorporate provisions regarding the agent’s obligations and owner’s authorisations in relation to holding deposits.
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.