Managing landlords forced to pay for new licensing and registration
Update: view the latest information on Rent Smart Wales
You may have read our recent article on the introduction of the Welsh Government’s new law affecting landlords and lettings agents, named Rent Smart Wales.
If you own or manage a house in Wales and it’s occupied by someone other than yourself in return for a rent, this new law will almost certainly apply to you.
This scheme is not yet open for landlords to register or apply for a license, but it’s still the Welsh Government’s intention to launch it before 2015 is out. As soon as the scheme is live, we’ll be sure to let you know.
In the meantime, the Welsh Government has released a list of frequently asked questions and answers concerning the new law, which may well answer some of the queries you have. You can read these below.
If you’re likely to require any assistance in the registration, licensing and property management process, we at CPS Homes are here to help. Let us take the strain! Please don’t hesitate to make contact with me today on 02920 668585 or email: adam.cooke@cpshomes.co.uk.
When will Rent Smart Wales commence?
It’s intended that Rent Smart Wales will be introduced over the course of late 2015 and 2016. Landlords should be able to register and apply for a licence (if they manage their properties themselves) from autumn 2015. The penalty for not doing so will not be introduced until a year later, from autumn 2016, giving people time to comply without fear of penalty.
What is Rent Smart Wales all about?
Rent Smart Wales will create a comprehensive register of the private rented sector in Wales. In addition, those persons who are directly involved in letting and managing rental properties will have to become suitably trained and be ‘fit and proper’ to deliver those activities. This will improve standards of letting and management practice in the sector.
In order to make compliance for landlords as simple as possible, the Welsh Ministers have designated a single licensing authority (Cardiff County Council) to administer the scheme for the whole of Wales. This means all landlords, wherever they operate, can approach just one authority to register and obtain a licence. They will complete one process and pay a single fee, and receive one registration number/licensing number that will be recognised throughout Wales.
It is anticipated that the majority of applicants will register and apply for a licence online at www.rentsmart.gov.wales, although there will also be a way to apply through a paper application form. Enforcement of the provisions will be undertaken both by the licensing authority and by local authorities.
What are the benefits of Rent Smart Wales?
The licensing system will enable landlords who undertake letting and management tasks to be better informed of their obligations. Experience shows that landlords and agents who undertake training value it and find it helps them to run their rentals more effectively. Licence applicants and their staff will be required to undertake approved training and to adhere to a Code of Practice.
Currently, local authorities often need to intervene and enforce standards in rented accommodation as some landlords and agents have a lack of understanding of their obligations. Ensuring landlords and agents who carry out letting and management tasks are ‘fit and proper’, well trained and operating to a Code of Practice will deliver better managed properties in the private sector which, in turn, will improve standards.
The registration system will allow local authorities in Wales to have an overview of where rented accommodation is, which will allow them to disseminate information and, if necessary, strategically intervene in issues as necessary. Local authorities already have regulatory powers in the private rented sector. In future, if a complaint is received regarding a landlord or property on the register, then the authority can contact the landlord or agent quickly, meaning the issue can be resolved more promptly. Currently, it can take some time to track down contact information for landlords and agents, leading to unnecessary delays.
How will registration work?
A landlord will register with the designated licensing authority through Rent Smart Wales. The information a landlord must provide to make a successful registration will be made clear by the authority. There will be an online option available. There will also be a fee (yet to be set, but thought to be around £50 per landlord) for registering. Registration for a small landlord online should take no more than 15 minutes.
Will all landlords have to register?
Yes. All landlords who offer to market or rent out a dwelling in Wales on either an assured (including assured shorthold) or regulated tenancy will have to register. Where there are joint landlords, all landlords have to be named on the register. However, the information can be inputted by a lead landlord.
Landlords who are trustees can register under the collective description of the trustees.
How long will registration last?
The registration will be valid for five years; after which date it must be renewed and a further fee paid. There is an ongoing requirement to keep the information on the register up-to-date, therefore requiring the registrant to notify the authority should their contact details or personal circumstances change. This will be quick and easy to do via a landlord’s online account with Rent Smart Wales or by contacting Rent Smart Wales direct.
Who does licensing apply to?
Licensing applies either to the landlord or agent (or both) depending on who carries out defined letting and management activities/work at a rental property in Wales.
How will licensing work?
A licence application will be made to Rent Smart Wales. The form and content of the information that will be required will be made clear by the authority. The online application will be able to be completed at www.rentsmart.gov.wales. There will also be a fee (yet to be set, but thought to be around £100 per landlord) for a licence.
In order for the licensing authority to grant a licence, the applicant must be deemed ‘fit and proper’ and be appropriately trained; evidence of which will need to be submitted by the applicant. Scots Disclosure or Disclosure and Barring Service (DBS; the new name for CRB) checks will not be required with every licence application. However, if the licensing authority requires more information to assist them in making a decision about whether someone is ‘fit and proper’ or not, such a check could be requested.
If the applicant is a company, organisation or an individual who employs staff whose role includes the carrying out of letting or management tasks, for which the applicant is obtaining a licence, then their staff must also be suitably trained. Evidence must be provided with the application, in order for the applicant to obtain a licence.
Training for landlords will follow the Landlord Accreditation Wales model that has been in place for the last few years. This scheme, currently run by Cardiff Council, will cease to operate once the new law comes in. However, if you are interested in doing training now, you can still join this scheme via www.welshlandlords.org.uk. The training will then be recognised for Rent Smart Wales and you will have little extra to do in order to meet the upcoming legal requirements.
Classroom-based and online training should be available in future.
Will all landlords need to become licensed?
A landlord who decides not to undertake any letting or management activities at their property(ies) can arrange for a licensed agent to act on their behalf for those activities and will not therefore need a licence. However, that landlord cannot undertake any letting or management activities in respect of those properties. In any case, the landlord must still register themselves and their properties with Rent Smart Wales as this is a separate legal requirement to licensing.
If a landlord does any form of letting or management activity at their rental properties, they must apply for a licence, even if they share the work with an agent. If they do share responsibilities, both they and the person acting on their behalf must be licensed.
The provisions do not prevent one landlord in a group putting themselves forward as a licensee for the joint landlords; nor for a landlord to arrange for a family member or friend to be the agent, as long as the person acting on their behalf is licensed.
Licences are not awarded in relation to specific rental addresses; they are awarded to the person who applies. Therefore, if a landlord has 10 properties, they only need obtain a single licence. Similarly, a person acting on behalf of a landlord will apply for a single licence regardless of how many properties they act in relation to. It will be for the landlord to identify on the register against who the relevant person undertaking the letting and management tasks at each property is.
How long will a licence last?
The licence will be valid for five years; after which time it must be renewed and a further fee paid. This is the same process as obtaining a first licence.
However, there is an ongoing requirement on a licence holder to keep the information held by a licensing authority up-to-date. The licence holder is required to notify the authority should their contact details or circumstances change. This will be quick and easy to do via a licensee’s online account with Rent Smart Wales or by contacting Rent Smart Wales direct.
There will also be conditions put on a licence. The licence holder must comply with a Welsh Minister-approved Code of Practice containing letting and management standards in relation to rental properties. Additionally, the licensing authority can include other conditions as it feels appropriate.
Licences can be revoked if a licence holder breaches a licence condition or is no longer ‘fit and proper’.
What are the penalties for not complying with these new requirements?
There are a range of penalties that can be enforced either by the licensing authority or a local authority should someone not comply with the provisions. These include Rent Repayment Orders, Fixed Penalty Notices, Rent Stopping Orders and summary convictions (with fines).
How will tenants benefit from the new requirements?
Current and prospective tenants will be able to search against certain criteria on a public register in order to verify that a landlord and property is registered, and the person undertaking the letting and management of a rental property is licensed.
Information for tenants will be produced and available on the Rent Smart Wales website to assist them in understanding their responsibilities and rights when renting privately.
Where can I obtain further information?
There is a range of information on the Welsh Government website on the renting a home privately pages. To subscribe to updates on details of the Act as they become available go to www.rentsmart.gov.wales.
