07/08/2019 4:22 pm
Hi, I’ve just read you most recent article on the Fee ban in Wales, no real issues with the most of it, byt really cannot make much sense of the Prohibited Fees bit when allied to rental values. For instance I run a number of student HMO properties, which I let on a 12 monthly fixed tenancy and always issue a Section 21 notice to ensure the tenancy ends when it should. But I also charge 50% of rent for July and August just as a holding rental. Tenants have full access and can stay in these months but there’s usually a bit more maintenance and decorating. My questions is will these arrangements fall foul of the Prohibited Fees bit of the Wales bill.
2 Comments
07/08/2019 4:33 pm
You are right to be concerned because in our view this practice will be effectively banned from 1 September.
It’s common in Wales for landlords to do what you suggest although in many cases, they charge the 50% but don’t allow access which we’ve always said was wrong anyway.
If you want to reply here with a typical payment schedule for the year, it will be interesting for us to do the maths using a real-life sample.
If you think about it from the legislation point of view, they’re trying to avoid hidden admin charges by a landlord charging a higher rent for one period and then a lower rent for another period. Although you’re trying to be good to the tenants, it’s nonetheless a higher and lower rent. The legislation will believe that your higher rent is actually an attempt to circumvent the legislation and secretly include an admin fee.
guildy
Hi
The typical 12 month rental per room in the HMO is 2 months July and August at £150 and 10 months September through June at £300. They pay monthly as I don’t take term based payments. Sometimes they voluntarily pay 3 or 4 months in advance but that is NOT stipulated in the AST they sign per room which asks for monthly payments. The lower payments are included in the ‘Other’ box which comes at the end of the tenancy builder
We all know what will happen here the students will lose out and each month will be £300, which I’m sure the legislators never desired to happen.
ianmcowley