Rent Smart Wales

Dear Landlords,

Following my attendance at a Landlord Licensing Training Course, presented by the RLA (Residential Landlords Association), at Wrexham. These courses are now being held throughout Wales so as to comply with Rent Smart Wales. Part 1 of the Housing (Wales) Act 2014 requires ALL landlords who have a property to let or are renting a ‘domestic tenancy, in Wales to be registered. In addition, any landlord who self manages their own portfolio or any property management agent will require a license. The registration and licensing requirements are run by Cardiff City. Council under the name of Rent Smart Wales. It will bring benefits to people who rent their home in the sector whilst at the same time improve the practices of landlords and agents alike and help to tackle the bad landlords who give the sector a bad name.

Registration and licensing requirements commenced on 23rd November 2015 with a 12-month grace period for landlords become to register and for self-managing landlords and letting / managing agents to obtain a license. After the 12-month period it will be an offence to operate without registration or license.

I will briefly explain the things you need to consider:

REGISTRATION:

Registration should not be confused with licensing under the Act. Registration is entirely separate and only applies to landlords. A landlord of a dwelling which is being offered to let or is subject to a ‘domestic tenancy’ needs to be registered.

Domestic Tenancy:

This is defined as an assured shorthold tenancy under the housing act 1988 (the most common type of tenancy which applies to most rented property, in Wales) or a regulated tenancy under the Rent Act 1977 The provisions do not apply if you rent to lodgers or if the tenancy cannot be an assured shorthold tenancy for sonic reason.

If the landlord lives outside of Wales and lets property in Wales, they too must register. Likewise, the requirement to register applies even if a landlord owns-just one property.

If a property has been recently purchased with an intention to rent it out, registration must be done within 28 days from when the property has been assigned to the landlord. If a property has been purchased with an existing tenant in place and the owner does not intend to continue renting to the tenant and intends to occupy the property as their home, the owner does not need to register if they take steps to recover possession within 28 days from when it was assigned to them and so long as they continue to diligently pursue the recovery of possession. Advice may need to be sought for this type of situation because failing to register can have serious consequences on seeking possession.

FEE TO REGISTER:

Registration is via Rent Smart Wales (operated by Cardiff City Council).

The fee for registration is £33.50 (online) or £88.50 (paper based)

This is the cost for each landlord registration no matter how many rental properties in Wales are included in the registration. A separate registration must be done for each landlord arrangement a landlord is part of, to if a landlord was registering some properties in sole ownership, some as part of a joint landlord arrangement and also some in company ownership this would be three (3) separate registrations, so three fees would be payable.

On registering you will need to provide:- contact details of the landlord, date of birth and details of all the properties for which they are the landlord. The details of any letting or managing agent appointed by the landlord must also be provided (if any). Please Note: The data held by Rent Smart Wales could well be shared with HMRC.

When registered the landlord must notify Rent Smart Wales (within 28 days) of the following changes:

(a) – any change in any of the contract information provided including name, address, telephone and email

(b) – the appointment of a letting agent or managing agent and if any previous ones supplied have ceased to be appointed

(c) – any assignment of the landlords interest in the rental property

It is important to highlight that if a landlord changes a letting or management agent this is a notifiable change and must be reported within 28 days of the appointment.

Rent Smart Wales may revoke the registration of any landlord who:

(a) – provides false information or information deemed misleading

(b) – fails to provide details of changes

(c) – fails to pay any fee charged

LANDLORDS WHO USE AGENTS:

A landlord must not appoint or continue to allow a person to let or manage a property who does not hold a license. The test is whether the landlord ‘should know’ that the person does not hold a license so a landlord must check with the public register before appointment.

This particular offence is a criminal offence, carrying an unlimited fine rent stopping and rent repayment orders are possible and the fixed penalty notice is not an option.

LICENSING:

Any person who preforms lettings or property management activities on a domestic tenancy must have a license. This includes landlords who self manage their own properties, as well as managing and letting agents. All licenses will require an element of training.

COST FOR A LICENCE:

Currently, applications for a license must be done paper based (once functionality is available for applications to be made through Rent Smart Wales website, the cost for paper based applications will increase)

Cost for self managing landlord – £144

Cost for Agent License £3728

Once granted, the license is valid for 5 years.

WHICH LANDLORDS WILL REQUIRE A LICENSE:

A landlord will need a license in addition to registration if the landlord is to carry out any one or more of the following lettings / management activities:

arranging or conducting viewings with prospective tenants

gathering evidence for the purpose of establishing the suitability of prospective tenants

preparing or managing the preparation of a tenancy agreement

preparing or arranging the preparation of an inventory

collecting rent

being the principal point of contact for the tenant in relation to matters arising under the tenancy

making arrangements with a person to carry out repairs or maintenance

making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose

checking the contents or condition of the dwelling or arranging for them to be checked

Serving notice to terminate the tenancy Where a landlord uses a licensed agent, that landlord must NOT undertake any of the above activities themselves without first obtaining a license.

For Example: if a landlord wishes to make arrangements with a person to carry out repairs or maintenance at a time whilst the dwelling is subject to a domestic tenancy, a license will first be required.

Otherwise it will be an offence. Its acceptable for the landlord to arrange with a licensed agent to get a repair or maintenance done though. It would appear to be acceptable for the landlord to carry out the repair / maintenance themselves provided that the access with the tenant is arranged through the agent.

I hope this has helped clear some of the ‘muddy waters’. Should you require any further information, please do not hesitate to contact me. May I remind landlords who use Elite Property Services as their agent, it is your responsibility to request any invoicing for your fees when you submit your tax returns to HMRC.