An update on Landlord - Agent registration and licensing in Wales
2016 Update: read the latest information on the scheme launched in November 2015
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You may have read our previous article on the proposed plans for Landlord/Agent registration and licensing in Wales. While the full details are yet to be confirmed, we now know that the system, called Rent Smart Wales, is due to commence in Autumn 2015.
With lettings agents having to meet strict requirements in order to obtain a licence and continue trading, landlords using an letting agent who doesn’t meet the specific criteria will be forced to employ the services of an alternative company.
So, with things becoming clearer on what is to be expected of Landlords and Agents under The Housing (Wales) Act Part 1, we thought we’d provide an update on how it’s all expected to work.
Landlord registration
As a landlord, even if you don’t find tenants or manage properties yourself, you will still be required to:
- Register yourself and your rental addresses (each separate dwelling) via a simple online process (This will cost approximately £50 per landlord);
- Keep your correspondence information and property addresses up-to-date;
- Pay a fee for continued registration every 5 years.
The purpose of the register is to identify rented properties and assist local authorities with information dissemination. The register won’t be public information, but tenants will have the ability to verify landlords against it.
Landlord licensing
If you find tenants and/or manage at least one property yourself (i.e. collect rent, organise safety certificates, arrange maintenance), you will also be required to:
- Obtain a landlord licence, costing in the region of £100 per landlord. Landlords with bigger portfolios are likely to have to pay more to be licensed, however. This is not to be confused with HMO licensing, which is something entirely different;
- Undertake approved training, comply with imposed conditions (such as adhering to a landlord code of practice) and be deemed ‘fit and proper’. You will not be granted a licence without these three things;
- Pay a fee for a renewed licence every 5 years.
Imposing landlord licensing ensures those who deal with rented properties day-to-day are fit, proper and accountable. It also means unsuitable persons will be unable to manage homes.
Agent licensing
Just like landlords, letting agents must also obtain a licence if they wish to continue trading. Strict requirements are in place on agents applying for a licence, including:
- Being members of the Association of Residential Letting Agents (ARLA) or similar;
- Having a Client Money Protection policy in place, which ensures your money is safe in the event of the agent going bust;
- Ensuring every member of staff has received approved training, which will be similar to the training landlords will be required to undergo when applying for their licence.
At CPS Homes, we’re in a position to obtain a licence as soon as the system is officially rolled out.
Many agents in the area, however, are not members of ARLA and do not have a Client Money Protection policy in place, so will be unable to gain a licence. What they intend to do about the situation remains to be seen, but we predict many will cease trading, forcing their landlords to use an alternative agent.
Landlord Accreditation Wales training
If you have already had training via Landlord Accreditation Wales (LAW), it will be recognised for the purpose of landlord licensing, so you’re unlikely to be required to do anything further. Additionally, your LAW data will be migrated across to the new database, so you should have little to do in order to register and obtain a licence.
Administering the system
Welsh Ministers have designated Cardiff Council as the authority to administer the system on behalf of the whole country, meaning they will grant registrations and licences. One registration and one licence cover landlords for the whole of Wales.
Enforcing the system
‘Rogue’ landlords, i.e. those who haven’t registered or are found to be managing a property without a licence, can be dealt with via a plethora of enforcement tools available to their local authority:
- Prosecutions;
- Fixed Penalty Notices;
- Rent Stopping Orders;
- Rent Repayment Orders;
- Restriction on terminating tenancies.
Enforcement powers will be enacted a year after the Landlord/Agent registration and licensing comes into effect, giving landlords plenty of time between Autumn 2015 and Autumn 2016 to comply.
What we don’t know at this stage
As explained above, we have a rough idea of what the fees are going to be for registration and licensing, but nothing exact just yet. Also, it’s not wholly clear what information will be requested when applying for registration or a licence, but the whole process should be possible online – with a postal option available too.
In terms of landlord training requirements, the exact content is yet to be decided, but it’s likely to mirror the Landlord Accreditation Wales course content referred to above.
More clarified information is set to be published as we approach the date of implementation.
The ultimate goal of Rent Smart Wales
With more landlords and lettings agents made to undergo training on their respective rights and responsibilities, Rent Smart Wales is expected to result in improved management standards within the private rented sector. The aim is to improve knowledge and raise confidence – tenants’ confidence in landlords & lettings agents and vice-versa.
If you have any concerns about what Rent Smart Wales means to you as a landlord, please don’t hesitate to contact us. We’re experts in the field and we’re here to help. Please call us on 02920 668585 or e-mail lettings@cpshomes.co.uk.
