Tenant Fee Ban Wales – What Fees Can Landlords And Letting Agents Charge And What Is Prohibited?

The Renting Homes (Fees etc.) (Wales) Act 2019 comes into force on 1 September 2019 and limits the fees landlords and letting agents can charge to contract-holders (formerly known as tenants) in Wales. This will make it an offence to charge a tenant any payment that is not specified as a ‘permitted payment’ under the legislation.

Please note this blog post applies to properties located in Wales. For an overview of the Tenant Fees Act 2019 which applies to properties in England, please see this page.

What Fees Can You Ask A Contract Holder To Pay?

From 1 September 2019, the only fees you can charge in connection with a standard occupation contract entered into in respect of a property in Wales are:

• the rent
• a security deposit – there is currently no prescribed limit in Wales
• a refundable holding deposit (to reserve a property) capped at no more than one week’s rent
• payments in default; and
• payments in respect of utilities, communication services, TV licence and council tax.

Any fees not included in this list are a ‘Prohibited Payment’ which may not be charged under the ban.

Where a contract holder wants to leave a fixed-term tenancy,the landlord may expect payment of the entirety of the fixed term. You can also reach an agreement with your contract holder to pay a lesser amount, which may cover any void period whilst you find a replacement contract holder.

Points To Note Relating To Permitted Fees

Rent
Rent should be equally split across the tenancy and paid at regular, specified intervals. This means that rent must be the same across similar periods. Any difference in amounts is a prohibited payment. For example, in the first year of the contract, you must not charge more rent at the start of the contract e.g. you cannot require the contract holder to pay £1,000 in month one and £600 in month two onward – the excess of £400 in month one will be a Prohibited Payment.

Security Deposits
The deposit must be protected with one of the authorised deposit protection schemes. Unlike in England, there is currently no statutory cap on the amount of security deposit that can be charged in Wales. A landlord is entitled to charge a higher deposit if, for example, the contract-holder wishes to keep pets in the property.

Holding Deposit
A holding deposit is capped at one week’s rent. A landlord may only accept one holding deposit at a time per property. The holding deposit must be refunded to the contract-holder within 15 calendar days of payment. This is known as the “deadline for agreement.” This period can be extended, but only if both parties agree in writing.

If the landlord enters into an occupation contract with the contract-holder, the deposit must be repaid within 7 calendar days of that agreement. A landlord can retain the holding deposit if: the deposit is applied towards the first payment of rent or the security deposit; the contract-holder provides false or misleading information; the contract-holder withdraws from the agreement; or the contract-holder fails to take reasonable steps to enter into the agreement.

Payments in Default

A payment in default is a payment required by the landlord or agent arising from a breach of the occupation contract by the contract-holder. Examples of default payments include: missed appointments; avoidable or purposeful damage to property; replacement keys; and emergency or out-of-hours call-out fees.

A default fee can only be charged where it has been expressly included in the occupation contract. If a default fee is charged where it is not set out in the contract, the payment will be a prohibited payment.

Default fees in Wales are subject to a prescribed limit specified by separate regulations. Landlords should ensure they are aware of the current prescribed limits and that any default fees charged are reasonable and proportionate.

Council Tax, Utilities, Television Licence an Communication Services

A landlord may charge for a payment of council tax in connection with the property. A landlord may also charge for utilities (such as gas, electricity and water) and communication services (such as broadband and telephone) in respect of the property where the obligation to make such payments is included in the occupation contract. A landlord may similarly charge for a payment towards a television licence. 

Fees That Are Not Permitted

Any fees not expressly included on the permitted list above, or in excess of those set out in the permitted list, are Prohibited Payments. The following list are non-exhaustive examples of payments which will be prohibited:

• Signing contracts
• Tenancy set-up or administration fees
• Accompanied viewings
• Inventory charges
• Credit check fees
• Tenancy check out fees
• End of tenancy professional cleans
• Grant, renewal or continuance of the tenancy
• Variation of the occupation contract; and
• Changing a joint occupation contract to reflect a change of sharer, should one contract-holder
• Leave and be replaced by another.

Renewals

From 1 September 2019, a fee cannot be charged for the renewal or variation of an occupation contract. This prohibition applies to all standard contracts entered into after 1 September 2019. Similarly, no fee may be charged for varying a joint occupation contract to add or remove a contract-holder.

Who Does The Ban Apply To?

The ban applies to all standard occupation contracts in the private rented sector in Wales. The ban does not apply to any properties located in England, which are instead governed by the Tenant Fees Act 2019 and, from 1 May 2026, the broader Renters’ Rights Act 2025.

When Does The Ban Apply?

The ban came into force on 1 September 2019. From that date, when entering into a standard occupation contract (or, prior to 1 December 2022, an assured shorthold tenancy) in the private rented sector, landlords and letting agents are prohibited from charging any fees or payments that are not included in the list of permitted payments set out above.

Agents and landlords were not required to repay any fees that had been charged to a contract-holder before 1 September 2019.

Prohibitions Applying To Landlords & Letting Agents

It is an offence for a landlord to require a prohibited payment, or to require that a contract-holder pay a loan, or enter into a contract for services in relation to their occupation contract.

It is an offence for a letting agent to require a prohibited payment, or to require that a contract-holder pay a loan, or enter into a contract for services in relation to their occupation contract.

It is an offence for any person to fail to comply with a notice issued by an enforcement authority under the Act requiring information, or to supply false or misleading information in relation to such a notice.

Enforcement & Penalties

The Local Housing Authority is able to issue landlords or letting agents a fixed penalty notice of £1,000. They may also choose to prosecute which, if convicted, can lead to an unlimited fine.

If a landlord fails to provide an enforcement officer with documents or information for the purposes of investigating whether any offences have been committed under this ban, when issued with a notice, you could be liable on conviction to a fine up to £2,500.

The Local Housing Authority also has a duty to inform Rent Smart Wales of any convictions made. They will consider any convictions as part of their consideration of whether someone is ‘fit and proper’ to hold a licence.

Compensation To Tenants

Contract-holders who have been charged a prohibited payment may recover unlawfully charged fees by applying to the County Court for a repayment order. It is advisable for contract-holders to retain evidence of any prohibited payments made, including receipts, bank statements and correspondence, as this will support any application to the court.

Possession Notices

Of significant concern to landlords is the provision that prevents a landlord from serving a valid possession notice if they have not repaid any unlawfully charged fees or returned any unlawfully retained holding deposit.

Landlords wishing to give a “no-fault” notice must use a section 173 notice under the Renting Homes (Wales) 2016, which requires a minimum of six months’ notice. Landlords may also use section 157 notices (the Welsh equivalent of section 8 notices) to seek possession on specified grounds, such as rent arrears or breach of contract.

If a landlord has charged prohibited fees and has not repaid them, the validity of any possession notice may be compromised. Contract-holders who refuse to accept a return of the sums may further complicate the landlord’s ability to serve a valid notice. To avoid this difficulty, landlords should ensure from the outset of the occupation contract that no prohibited payments are taken.

Action Points

1. Review your standard occupation contract. Does it contain any fees that are not on the list of fees a contract-holder can be asked to pay? If so, these are prohibited payments and must be removed from the contract immediately.
   
2. Ensure permitted fees are properly documented. Any permitted fees that must be expressly included in the occupation contract to be chargeable (such as default fees) should be clearly set out in the written statement of the contract.
   
3. Maintain clear records. Keep comprehensive records and evidence of all payments requested from contract-holders, including the reason for each payment.
   
4. Verify your Rent Smart Wales registration and licence. Ensure that your registration with Rent Smart Wales is current and that any self-managing landlord licence or letting agent licence is valid. Any convictions under the fee ban legislation will be relevant to the “fit and proper person” assessment.
   
5. Ensure no prohibited payments are outstanding before seeking possession. If you intend to serve a possession notice under section 173 or section 157 of the Renting Homes (Wales) Act 2016, confirm that all prohibited payments have been refunded and all holding deposits have been returned. Failure to do so may invalidate the notice.