An Agent’s Guide To Rent Smart Wales Registration And Licensing

On 23 November 2016, the licensing provisions in Wales commenced. There was a 12-month grace period for agents to comply, and Cardiff City Council operates and enforces the licensing under 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 do any letting 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 about 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 disseminates 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, if the agent does no other lettings or property management work in respect of the property, then a licence is not required. This will include agents who provide an advertisement (on Rightmove, for example) and pass the prospective landlord details to the prospective tenant, who makes 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 necessary if the only thing a person does is anyone (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 that only prepare inventories, for example, not to 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 about 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 needing 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).

Please see here for current fees.

Requirements Concerning Training

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

Training is available through Rent Smart Wales and other companies offering training that Rent Smart Wales has approved.

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.

Training for Professionals provides 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 agent's 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 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 about 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 consist of fees and expenses, the terms of business, the duration of the agreement and the extent of the agent's financial authority to authorise expenditures 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 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 later, such as any fees for the tenancy agreement renewal. All prices must be stated as being inclusive of Value Added Tax ("VAT")
- potential tenants must be allowed to read a draft or sample tenancy agreement before 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 the licence holder
- change in a 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 renewal 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 to the Residential Property Tribunal 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, some severe penalties and restrictions also apply for breaches.

For certain offences, Rent Smart Wales or local authority could offer a fixed penalty notice which, if paid, would prevent further proceedings in relation to the offence. A section 173 notice will not be able to be served where the agent managing the property is not licensed.

A contract 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 notice).