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Rent Smart Wales: What landlords need to do

Posted on 2015-11-20

Earlier this year the Welsh Government announced details of a new registration and licensing scheme for the country's Private Rented Sector (PRS).

It has subsequently been confirmed that Rent Smart Wales will be launched on November 23 2015. Unlike many pieces of legislation, however, landlords and letting agents will have a year from the start date to comply.

The scheme's being implemented in a bid to raise standards in the PRS and Welsh Minister with responsibility for housing, Lesley Griffiths, has argued that with approximately 184,000 privately rented homes in Wales, a strong sector with good working practices is absolutely essential.

She said the scheme's designed not only to improve the situation for the nation's tenants, but also to help the majority of good landlords by improving the sector's reputation.

Rent Smart Wales is divided into two parts: registration and licensing. All landlords will be required to register but licensing will depend on how their properties are managed.

Registration:

The scheme will require all private landlords who own a rental property in Wales to register their details as well as the addresses of all of their rental properties that are situated in Wales.

A landlord's registration will be valid for five years and after that period they will be required to renew the registration.

There will also be a requirement for landlords to make sure that all information held about them is kept up-to-date. For example, if a landlord's contact details or personal circumstances change, they will be required to notify Rent Smart Wales.

According to the scheme, landlords will have to register through the designated licensing authority, Cardiff City Council. There will also be an online registration process available – which, the scheme says, will take no more than 15 minutes for a 'small landlord'. Any changes of contact details can be entered through a landlord's Rent Smart Wales online account or by contacting the scheme directly.

Licensing and training:

Landlords who undertake property management themselves – as defined by the Housing (Wales) Act 2014 – will need to apply for a licence after registering with Rent Smart Wales.

If, on the other hand, a landlord does not actively manage their rental properties and they use a letting agent to do so, the agent must be licensed by November 2016.

To obtain a licence, landlords or their agents must be 'adequately' trained and have declared themselves 'fit and proper'.

Rent Smart Wales will provide its own training sessions and there will also be approved courses delivered by other authorised training providers. For example, the Residential Landlords Association (RLA) Wales has reported that it has applied to provide training for the scheme.

Evidence of training and being 'fit and proper', as defined in section 20 of the Housing (Wales) Act, will have to be supplied by landlords or agents when applying for a licence.

Disclosure and Barring Service (DBS) checks, formerly known as CRB checks, will not be required in all cases but Rent Smart Wales has confirmed that if more information's required to deem whether someone is 'fit and proper', documents like DBS checks might be requested.

If the landlord employs staff to carry out letting management tasks, then these individuals must also be suitably trained in order for a licence to be granted.

Training for landlords will follow the current model in place through Landlord Accreditation Wales. This scheme, also run by Cardiff Council, will cease to operate once the new law comes in.

However, any landlords who haven't already completed Landlord Wales Accreditation training can still do so. And the Welsh Government has said that landlords who have completed this training will be in an advantageous position when the new scheme comes in as they will have 'little extra' to do to obtain a licence.

The approved training schemes will consist of five areas: General Overview about Renting, Starting up a Tenancy, Responsibilities and Liabilities, During Tenancy and Ending a Tenancy.

Enforcement:

As mentioned above, enforcement of the scheme will not be taking place in its first year of operation. Instead, the Welsh Government intends to spend the first year raising awareness of the scheme's requirements and encouraging landlords and agents to comply.

From 23 November 2016, however, a full range of enforcement powers – set out in the Housing (Wales) Act 2014 – will be introduced. From this point, any landlords or agents found to be flouting their obligations could have actions taken against them by local authorities and the licensing authority, Cardiff City Council.

There are a range of penalties that can be enforced, including Rent Repayment Orders, Fixed Penalty Notices, Rent Stopping Orders and summary convictions (with fines).

Costs:

It will cost landlords to register for Rent Smart Wales. They will also be charged another fee to obtain a licence. And, after the initial five year period, landlords will be required to pay another fee when renewing their registration of the scheme.

As yet, there has been little to no information on how much it will cost – apart from an early Government prediction of a £50 per landlord registration fee plus £10 per property registration fee.

We will, of course, find out very shortly the exact costs of the scheme. The RLA Wales recently revealed that Cardiff City Council is taking on 37 new members of staff to run the scheme, so it predicts that the Government's early cost predictions might fall short of the final fee.

Rent Smart Wales intends to self-finance from fee income, and is not for profit.

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