Taking a closer look at the new legislation for letting agencies

Cathays, Hirwain Street: Cathays is one of the most popular student areas in Cardiff. Source: Derek Harper (via Geograph)
Are students having an easier time getting their deposits back in light of the new legislation for landlords and letting agencies?

By Olly Davies

The new Renting Homes (Fees etc.) (Wales) Act 2019 came into effect at the start of September. The act outlines which payments are ‘permitted’ to be charged by landlords and letting agencies and has led to a ban on payments “such as check-in fees, check-out (or ‘exit’) fees, administration fees, inventory fees [and] guarantor fees”; another benefit is the capping of holding deposits.

The ‘holding deposit’ is the amount of money which is “paid by a tenant to secure a property”. This is “a guarantee to landlords that their tenant is committed to taking on the property and provides a guarantee to the tenant that the landlord will hold the property for them.” In light of this new piece of legislation, this fee has been capped at a total of one week’s rent for the property. This could be of benefit to some students as it means they may have access to more of their student loan during term.

The act also states that this holding deposit must be returned within 15 days of payment unless agreed in writing otherwise. If one decides not to enter a tenancy, then the deposit must be repaid within 7 days. The aim of this is to ensure the speedy repayment of holding deposits.

The new law, however, is not as stringent in regards to security, or tenancy, deposits; this is the sum of money held by a landlord or letting agent for security against any loss or damage incurred as a result of the actions of the tenants. There has been little change from the Housing Act (2004) in this regard.

Two Cardiff University students said they were “disappointed by this” and they feel “let down by the current system” that is being used. Nadine and Mark* spoke to Gair Rhydd surrounding the issues they have had in receiving their security deposit back from their letting agency.

Having moved out of their Cathays property in June, the two students are still waiting to finalise any fees incurred during their tenancy period. Initial problems arose when their letting agency required a final bill to secure the release of their deposit. Nadine said, “we were trying to get [our deposit] back, but they needed a final bill”, however, neither Mark nor Nadine could produce said bill because their “energy company [had] changed from Octopus to Scottish Power without [them] knowing”.

The “erroneous takeover” meant they were not paying energy bills for the final two months of their tenancy. Octopus claimed they were taken over by Scottish Power, however, Scottish Power claimed they had no account details for the property.

Eventually, the letting agency decided to waive the final bill and discuss charges for the property and the rest of Nadine and Mark’s story will sound familiar to some students. The letting agency is asking to take deductions from their initial holding deposit for cleaning fees despite the students stating the house was cleaned before leaving the property and is also trying to charge Nadine and Mark for furnishings which were not in the property when their tenancy began. Unfortunately, situations such as these are not covered in the new act.

The aim of the new Renting Homes Act is to reduce the fees paid by tenants. However, CPS, a popular letting agency amongst Cardiff students, have stated they will be left with little alternative but to “increase [their] fees to new and existing landlord clients”. Across Wales, this may result in higher rents for tenants and potentially stricter guidelines for the maintenance of properties.

*Names changed as case is ongoing.

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