We have also produced a guide especially for landlords here.

From 23 November 2016, the licensing provisions in Wales commenced. There was a 12 month grace period for agents to comply. The licensing is operated and enforced by Cardiff City Council under the name of Rent Smart Wales.

Any person who performs lettings or property management work on a ‘domestic tenancy’ must have a licence from 23 November 2016.

All licenses will need to be applied for through Rent Smart Wales and will involve some training (for which see later).

Lettings Work

An agent will require a licence if the agent is to carry out any lettings work. This means anything done by any person in response to instructions from:

  • a person seeking to find another person wishing to rent a dwelling under a domestic tenancy and, having found such a person, to grant such a tenancy (“a prospective landlord”), or
    • a person seeking to find a dwelling to rent under a domestic tenancy and having found such a dwelling, to obtain such a tenancy of it (“a prospective tenant”).

Property Management Work

Further, an agent will need a licence if the agent wishes to carry out property management work. This means doing any of the following things:

  • collecting rent;
    • being the principal point of contact for the tenant in relation to matters arising under the tenancy;
    • making arrangements with a person to carry out repairs or maintenance;
    • making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose;
    • checking the contents or condition of the dwelling, or arranging for them to be checked;
    • serving notice to terminate a tenancy.

Exemptions To Requirements For Agents To Be Licensed

If an agent only publishes advertisements or disseminating information providing a means by which:

  • a prospective landlord (or the prospective landlord’s agent) or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or (as the case may be) prospective landlord (or the prospective landlord’s agent), and
    • a prospective landlord (or the prospective landlord’s agent) and a prospective tenant can continue to communicate directly with each other.

And, the agent does no other lettings work or property management work in respect of the property, then, a licence is not required. This will include agents who simply provide an advertisement (on Rightmove for example) and pass the prospective landlord details to the prospective tenant who make direct contact and the landlord carries out viewings themselves etc. However, if such an agent wishes to offer a further service of granting a tenancy on behalf of the landlord for example, a licence will be required if the dwelling is in Wales.

Further, a licence is not required if the only thing a person does is any one (but not more than one) of the following things:

  • arranging and conducting viewings with prospective tenants;
    • preparing, or arranging the preparation of, the tenancy agreement;
    • preparing, or arranging the preparation of, any inventory or schedule of condition;

Nor must the person do any letting or property management work for this exemption to apply. This allows firms which only prepare inventories for example to not require a licence as long as they don’t do any other letting or property management work.

If a person does any one of the following things (and only one of the following) and does no lettings work whatsoever, no licence will be required:

  • being the principal point of contact for the tenant in relation to matters arising under the tenancy;
    • making arrangements with a person to carry out repairs or maintenance;
    • making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose;
    • checking the contents or condition of the dwelling, or arranging for them to be checked;
    • serving notice to terminate a tenancy.

For example, this exemption would allow an inventory clerk to check the condition of a property at the end of a tenancy without the need for a licence.

Obtaining A Licence

An application for a licence for agents will be made to Rent Smart Wales. The fee depends on the number of properties managed, whether the agent is a member of a relevant professional body and how the application is made (online or paper).

From 25 April 2016, there are discounts available for agents who are members of a relevant professional body namely:

  • Association of Residential Letting Agents (ARLA)
    • Royal Institute of Chartered Surveyors (RICS)
    • National Approved Letting Scheme (NALS)
    • The UK Association of Letting Agents UKALA
    • Other as determined by Licensing Authority

The landlord fee of £144.00 (£186.00 paper) will apply to the following:

  • Agents managing less than 20 properties and do not undertake “let only” activities, or
    • Agents who manage only their own and / or properties owned by a relative and do not employ staff for letting and management purposes, (Relative is defined in Section 258 Housing Act 2004)
      unless otherwise determined by the Licensing Authority.

“Let only” agencies will fall into the ‘up to 99’ category. Payment by instalments is available to smaller agents.

The fees from 25 April 2016 are as shown below:

The information required at the time of the application will include:

  • contact information
    • details of any licenses, voluntary accreditation or registration held or refused in the rest of the U.K.
    • a declaration of any convictions or court orders
    • details of any connected persons (persons employed or on apprenticeship)

Requirements In Relation To Training

It will be a condition of all licenses that training be completed by the applicant agent and their connected persons (staff or apprentices).

Training is available both through Rent Smart Wales and other companies offering training that have been approved by Rent Smart Wales. It is available as face to face training or online. The cost of training will be payable in addition to the licence fee depending on which provider the agent chooses.

Agents will need to complete both the landlord module and an additional agent module too.

We can provide training for agents which is fully approved by Rent Smart Wales and suitable for the licence.

Staff Of Agents (Connected Person)

Any person on a contract of service (employed by the agent) or on an apprenticeship with the agent does not need to obtain a licence. Such a person is known as a “connected person”. The agents licence will contain conditions that all ‘connected persons’ must complete the training.

Staff or apprentices will require training if they do any one or more of the following:

Lettings work

  • publishing advertisements or disseminating information;
    • providing a means by which a prospective landlord or tenant tenant may make contact with a prospective landlord or tenant and continue to communicate directly with each other;
    • arranging and conducting viewings with prospective tenants;
    • preparing, or arranging the preparation of, the tenancy agreement;
    • preparing, or arranging the preparation of, any inventory or schedule of condition;

Property management work

  • collecting rent;
    • being the principal point of contact for the tenant in relation to matters arising under the tenancy;
    • making arrangements with a person to carry out repairs or maintenance;
    • making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose;
    • checking the contents or condition of the dwelling, or arranging for them to be checked;
    • serving notice to terminate a tenancy.

In addition to attending or completing the course, both agents and staff will need to pass a test relating to the content.

Licence Conditions And Code Of Practice

Any licence granted to either a landlord or agent will be subject to a condition that the statutory code of practice must be complied with. The code of practice should be consulted for full details but includes:

  • the agent must provide information about any management agreement to the landlord which will include fees and expenses, the terms of business, the duration of the agreement and the extent of the agent’s financial authority to authorise expenditure such as essential repairs or maintenance
    • the landlord client must be given sufficient time to consider the terms
    • all statements made about a property, whether spoken, in pictures or in writing, must be correct and not misleading
    • the agent must disclose to a prospective tenant all fees so all the costs payable if entering into a tenancy agreement are clear and understood. The same also applies to any fees which may be charged at a later date, such as any fees for the renewal of the tenancy agreement. All fees must be stated as being inclusive of Value Added Tax (“VAT”)
    • potential tenants must be given the opportunity to read a draft or sample tenancy agreement prior to signing their tenancy agreement.

Update Information About Licence Holder

The licence holder must notify any changes within 28 days which include changes to:

  • contact details of licence holder
    • change in connected person
    • any change that may affect the “fit and proper person” test

Revocation Of Licence

A licence may be revoked if:

  • the licence holder has breached a condition of the licence;
    • the authority is no longer satisfied that the licence holder is a fit and proper person;
    • the licence holder has failed to update information;
    • the licence holder and the licensing authority have agreed that the licence should be revoked.

Expiry And Renewals

A licence expires at the end of 5 years but a licence holder may apply for a renewal during the period of 84 days before the expiry date. Where an application to renew is made, the licence does not expire until the application is decided.

A licence expires if the licence holder dies or in the case of a body corporate, is dissolved.

Appeals

An applicant may appeal certain decisions made by a licensing authority in respect of a licence namely:

  • granting a licence subject to a condition (but there is no appeal against the code of practice);
    • refusing an application for a licence;
    • amending a licence;
    • revoking a licence.

An appeal is to the Residential Property Tribunal and must be made within 28 days beginning with the date the applicant was notified of the decision.

Enforcement, Penalties And Restrictions

Breaching any of the several requirements under the Act is in the main a criminal offence and a licensing authority or local housing authority have powers of prosecution. Further, there are severe penalties and restrictions that also apply for breaches. It is possible for certain offences that Rent Smart Wales or a local authority could offer a fixed penalty notice which if paid would prevent further proceedings in relation to the offence. A section 21 notice will not be able to be served where the agent managing the property is not licensed (but a full and paid for application for a licence should be sufficient to allow service of the section 21 notice).

A tenancy will remain valid and enforceable even if any one of the several requirements under the Act are not complied with (except for rent which has been ordered to be stopped or repaid or the inability to serve a section 21 notice).

Useful links

Rent Smart Training

Rent Smart Wales

Check to see if you need an agent licence by answering questions

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