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On 18th November 2013 a new bill was introduced proposing a mandatory licensing scheme for all residential landlords and agents with properties in Wales. The aim of the legislation was to streamline the private rented sector and raise the standards of housing across Wales.The legislation places greater duties on Local Councils to prevent homelessness, new measures to assist those in need of a home and powers to charge more council tax for empty properties.

The bill received Royal Assent on 17th September 2014 and became the Welsh government’s first ever Housing Act that is now the Housing Act (Wales) Act 2014.

On 1st April 2015 the Welsh government appointed Cardiff Council to administer the licensing scheme for Wales and Rent Smart Wales was created.  Cardiff Council are responsible for implementing, administrating and regulating the parts of the Housing (Wales) Act 2014 that deal with registration and landlord and agents applications for licensing.

Cardiff Council will undertake:

On 1st April 2015 the Welsh government appointed Cardiff Council to administer the licensing scheme for Wales and Rent Smart Wales was newly created.  Cardiff Council are responsible for implementing, administrating and regulating the parts of the Housing (Wales) Act 2014 that deal with registration and landlord and agents applications for licensing.

Cardiff Council will undertake:

• the operation of a central register
• keeping an up to date list of all the properties registered
• assisting with any enforcement action that may be necessary
• delivery of training
• approval of external training

If you rent property in Wales, the deadline for compliance has passed, meaning enforcement action can be taken against you if you are not properly registered and/or licensed.

The main parts of the Act relating to the private rented sector are covered in Part One and in Schedule One titled “Regulation of Private Rented Housing”.

Section 4 of the Act requires anyone who offers or markets a dwelling for the purposes of letting under a residential tenancy to register. Failure to register can result in a fine or rent repayment order. To avoid sanctions Landlords and Agents had to apply by 23rd November 2016.

The main parts of the Act relating to the private rented sector are covered in Part One and in Schedule One titled “Regulation of Private Rented Housing”.

Section 4 of the Act requires anyone who offers or markets a dwelling for the purposes of letting under a residential tenancy to register which includes landlords, regardless of where they live or if they use an agent.  Landlord’s managing their own property have to also be licensed. Agents do not have to register but MUST be licensed. Failure to register as a landlord can result in a fine or rent repayment order. To avoid sanctions Landlords and Agents had to make their applications by the 23rd November 2016, thereafter enforcement action can and will be taken if you are not properly registered and/or licensed.

Any Landlord who has a rental property in Wales rented out on an assured, assured shorthold or regulated tenancy is required to register. Depending on how a property is owned will determine who needs to register it. All registrations must be done with Rent Smart Wales administered by Cardiff Council. This is called Landlord registration. It can be done online and landlords have to provide information about their rental properties and who is managing it and paying the appropriate fee.

Landlords who are not involved in setting up tenancies and managing their rental properties do not need a licence, however, they must use a licensed agent to manage their property. They will still need to register as a landlord with Rent Smart Wales. Landlords who do manage their properties themselves and do not employ an agent must apply for a licence. Such landlords are normally described as ‘self managing’. Landlords who require a licence must in addition to the registration requirements also undertake training from an approved trainer in order to get a licence. Agents also have to pass an approved course to get a licence and this applies to all customer facing staff.

All letting agents in Wales must obtain a licence from Rent Smart Wales if they carry out “letting activities”.

Procedure for Landlords to register (if they are merely the owner and a licensed agent is managing the property)

• Register via Rent Smart Wales www.rentsmart.gov.wales
• Pay the fee – currently £33.50 (There is a paper application costing £80.50 obtainable by calling 03000 133344)
• Provide your details including full addresses of each rental property owned in Wales (the fee covers any number of properties)
• You will then receive a registration number and the process is complete

Procedure for Landlords to obtain a licence if they also manage the properties themselves:

• Apply via Rent Smart Wales www.rentsmart.gov.wales
• Pay the fee – currently £144.00 (There is a paper application costing £186.00 obtainable by calling 03000 133344)
• Pass the “fit and proper person” test
• Complete the training
• Once completed the Landlord will receive confirmation and a licence number
• The Landlord must then adhere to the code of practice
• The licence lasts 5 years after which time it must be renewed.
• The licence can be revoked if the Landlord fails to comply with the terms of the licence or loses the status of “fit and proper person”

Procedure for Agents to obtain a licence:

• Apply via Rent Smart Wales www.rentsmart.gov.uk
• Pay the fee – this depends on number of properties managed, see www.rentsmart.gov.wales for details
• Pass the “fit and proper person” test
• Satisfy the training element
• Once completed the Agent will receive confirmation and a licence number
• The Agent must then adhere to the code of practice
• The licence lasts 5 years after which time it must be renewed
• The licence can be revoked if the Agent fails to comply with the terms of the licence or loses the status of “fit and proper person”

The definition of a “connected person” in the legislation is:

“A person doing things under a contract of service or apprenticeship with an applicant for a licence where the applicant for a licence is the landlord and the person does any of the things listed in:

(i) Section 6(2) (requirement for landlords to be licensed to carry out letting activities) of the Act; AND

(ii) Section 7(2) (requirement for landlords to be licensed to carry out property management activities) of the Act”

Generally speaking a person under contract of service is a staff member who you pay a salary to or who is an “employee” for payroll purposes.  People you pay for the services they provide (e.g. contractors) or people you instruct to act on your behalf are not counted as “connected persons” and they do not have to be trained in order for a landlord to obtain a licence.

Landlord and Agent Licence Conditions

When a landlord or agent is granted a licence by Rent Smart Wales, there are a number of standard conditions attached. In some cases, additional Conditions may be added involving timescales and additional requirements of the applicant. You will find more information about each type of Licence and their associated conditions.

As part of the licence conditions landlords and agents are required to obey the Rent Smart Wales Code of Practice for Landlords and Agents licensed under Part 1 of the Housing (Wales) Act 2014.

This document comprises two elements. First and foremost, it sets out what landlords and agents must do i.e. “Requirements” in order to comply with the law. Unless specified, the “Requirements” apply to both landlords and letting agents. The second element of the Code is information on what can be done to raise standards above the minimum level required by law. This is described as “Best Practice”, and is shown in shaded boxes throughout the document. Access the Code of Practice here.

There are several exemptions or defences to not having an appropriate licence or registration. Section 4(3) provides a defence against proceedings if the landlord can establish “reasonable excuse”. Section 5 of the Act defines “reasonable excuse” as follows:

(a)if the landlord has applied to the licensing authority to be registered in relation to that dwelling and the application has not been determined;

There are several exemptions or defences to not having an appropriate licence or registration. Section 4(3) provides a defence against proceedings if the landlord can establish “reasonable excuse”. Section 5 of the Act defines “reasonable excuse” as follows:

(a)if the landlord has applied to the licensing authority to be registered in relation to that dwelling and the application has not been determined;

(b)for a period of 28 days beginning with the date the landlord’s interest in the dwelling is assigned to the landlord;

(c)if the landlord takes steps to recover possession of the dwelling within a period of 28 days beginning with the date the landlord’s interest in the dwelling is assigned to the landlord, for so long as the landlord continues to diligently pursue the recovery of possession;

(d)to a landlord who is a registered social landlord;

(e)to a landlord who is a fully mutual housing association;

(f)to a person of a description specified for the purposes of this section in an order made by the Welsh Ministers.

The definition for “lettings activity” that applies to Landlords is as follows:

(a)arranging or conducting viewings with prospective tenants;

(b)gathering evidence for the purpose of establishing the suitability of prospective tenants (for example, by confirming character references, undertaking credit checks or interviewing a prospective tenant);

(c)preparing, or arranging the preparation, of a tenancy agreement;

The definition for “lettings activity” that applies to Landlords is as follows:

(a)arranging or conducting viewings with prospective tenants;

(b)gathering evidence for the purpose of establishing the suitability of prospective tenants (for example, by confirming character references, undertaking credit checks or interviewing a prospective tenant);

(c)preparing, or arranging the preparation, of a tenancy agreement;

(d)preparing, or arranging the preparation, of an inventory for the dwelling or schedule of condition for the dwelling.

This means any Landlord carrying out any of the above activities will need to be licensed not just registered. If a Landlord is not licensed they will not be able to:

• Collect rent
• Be the first point of contact for their tenants
• Make arrangements with contractors to enter the property for maintenance or repairs
• Check the state of the property (do inspection visits)
• Serve any legal notices on the tenant

If a Landlord does not wish to become licensed in order to carry out “lettings activities” they must appoint a licensed agent to carry out this work on their behalf. (The Landlord will still need to be registered with Rent Smart Wales.)

The definition for “property management work” that applies to agents is:

(a)collecting rent;

(b)being the principal point of contact for the tenant in relation to matters arising under the tenancy;

(c)making arrangements with a person to carry out repairs or maintenance;

(d)making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose;

(e)checking the contents or condition of the dwelling, or arranging for them to be checked;

(f)serving notice to terminate a tenancy.

A Landlord will be committing an offence if they allow or instruct a letting agent to carry out property management work without a licence. It is advisable to inspect an agent’s licence before instructing them and to retain a copy. An agent cannot apply for a licence on behalf of the Landlord.

Local Authorities will be responsible for enforcing the scheme and it is likely that fixed penalties will be issued in the majority of non-compliance cases. Fixed penalties will be issued either for £150.00 or £250.00 depending on the offence.

There are also two other enforcement options available to Local Authorities:

Rent Stopping Orders

Local Authorities will be responsible for enforcing the scheme and fixed penalties are be issued in the majority of non-compliance cases. Fixed penalties will be issued either for £150.00 or £250.00 depending on the offence.

There are also two other enforcement options available to Local Authorities:

Rent Stopping Orders

• Made if a Landlord carries out property management activities unlicensed or if a Landlord knowingly appoints an unlicensed agent
• Notice of Intention of Proceedings will be sent to both Landlord and Tenant
• Landlord has 28 days to make any representations
• Order made by tribunal would halt rent payments to the Landlord until the licencing requirements are met

Rent Repayment Orders

• Similar to Rent Stopping Orders but involves paying back rent already received
• Can order the Landlord to pay back to the Tenant up to 12 months’ rent
• A Tenant can make an application for a Rent Repayment Order to cover a period that the Landlord was in breach of the licencing requirements

The Renting Homes (Wales) Act 2016 was granted Royal Assent on 18th January 2016 which along with the Housing (Wales) Act 2014 is a significant piece of legislation for the private rented sector in Wales.

The Act will:

The Renting Homes (Wales) Act 2016 was granted Royal Assent on 18th January 2016 which along with the Housing (Wales) Act 2014 is a significant piece of legislation for the private rented sector in Wales.

The Act will:

• Replace the majority of current tenancies with two types of contract – one for the private rented sector and one for the social housing sector
• Require Landlords to issue a written tenancy agreement which clearly sets out the rights and responsibilities of both landlords and tenants
• Require Landlords to carry out repairs and ensure rental properties are fit for human habitation
• Protect Tenants from eviction following a complaint about the condition of a property
• Provide for more targeted possession, allowing for the removal of abusive or disruptive tenants
• Help a Landlord to recover a property in situations where the tenant abandons it

The Act is yet to come into force. It is anticipated that it will be bought into force by way of statutory instruments at some point in the future.

On 25th February 2016 a new “C4” planning class was introduced in Wales for small HMOs housing up to 6 people mimicking that already found in England. Permitted development rights also came into force allowing for change of use from C4 to C3 without planning permission needed. However, there will not be permitted development rights for change of use from C3 to C4.

On 25th February 2016 a new “C4” planning class was introduced in Wales for small HMOs housing up to 6 people mimicking that already found in England. Permitted development rights also came into force allowing for change of use from C4 to C3 without planning permission needed. However, there will not be permitted development rights for change of use from C3 to C4. This means any change of use from a family home to a small HMO will need planning permission.