A ban on lettings agents and landlords charging tenant fees is pencilled in to take affect from 01 September this year, it has been announced.

The Renting Homes (Fees etc) (Wales) Bill has passed through Parliament and is now awaiting Royal Assent, after which it will become an Act. A similar ban is due to take effect in England on 01 June and fees are already banned in Scotland.

It will make it illegal for letting agents and landlords in Wales to charge anything other than permitted payments, which are rent, security deposits, holding deposits, utilities, communication services, council tax, and green deal charges.

Under the tenant fees ban there will also be a cap on holding deposits to the equivalent of one week’s rent and penalties include Fixed Penalty Notices of £1,000 to be issued by Trading Standards against any agent or landlord seeking a banned payment.

Housing and Local Government Minister, Julie James, confirmed that the ban will come into force at the beginning of September. ‘The Act will reduce the up-front costs of renting to a minimum, an Act that has robust restrictions and enforcement arrangements in place to further address the behaviour of rogue agents and landlords,’ she said.

‘The tenant fees ban is now an inevitability in Wales, and agents need to start preparing for a post tenant fees world,’ said David Cox, chief executive of the Association of Residential Letting Agents (ARLA), adding that the association will be launching a Welsh specific Tenant Fees Toolkit, as well as arranging a webinar on the ban and a roadshow for Welsh agents later in the summer, so they fully understand the law before it comes into force.

The National Landlords Association (NLA) said that landlords managing their own portfolios should review their contracts for future tenancies to ensure that they do not contain clauses that may result in prohibited payments and landlords that rely on letting agents should liaise with them and ensure that provisions are in place to ensure compliance with the legislation.

Under the new legislation, if penalties are not paid, enforcement authorities, which encompass local authorities in Wales and the licensing authority, Rent Smart Wales, can prosecute offences through the Magistrates Court.

Convictions for an offence could result in an unlimited fine and will be taken into account by Rent Smart Wales when considering whether to grant or renew a licence.