Rent Smart Wales: Registration & Licensing Guide

Cardiff City Council operates and enforces registration and licensing under Rent Smart Wales. 

It commenced on 23 November 2015 with a 12-month grace period for landlords to register and for self-managing landlords and letting/managing agents to obtain a licence. Since 23 November 2016, operating without registration or a licence has been an offence.

You can find more information on the Rent Smart Wales website - https://www.rentsmart.gov.wales/en/

Rent Smart Wales registration and licensing rules are made under the Housing (Wales) Act 2014.

Terminology

Domestic Tenancy

The registration and licensing requirements apply where a dwelling in Wales is being offered for letting or is subject to a domestic tenancy.

A 'domestic tenancy' is an occupation contract under the Renting Homes (Wales) Act 2016 (the most common agreement applicable to the most rented property in Wales) or a regulated tenancy under the Rent Act 1977. The provisions do not apply if you rent to lodgers in your own home or the tenancy cannot be an occupation contract. See later for more information about the types of agreements and different situations.

Dwelling

The rented unit is called a ' dwelling ' under the Renting Homes (Wales) Act 2016. This could be an entire property or maybe just a bedsitting room. There will be situations where one or the other word will be more appropriate depending on the context of the property being considered in this document. This handbook will generally use 'property' or 'dwelling' interchangeably.

Occupation Contract

Under the Renting Homes (Wales) Act 2016, the agreement between the landlord and occupier is referred to as an occupation contract. This may legally be a tenancy or a licence, but they are all called occupation contracts. This handbook covers situations covered by the Renting Homes (Wales) Act 2016 and situations outside that legislation; we will generally refer to an 'agreement' to mean both occupation contracts and tenancies or licences outside the Act. We will use those words if we are talking only about occupation contracts. Likewise, if only referring to tenancies or licences outside the Act, we will refer to tenancies or licences.

Contract Holder

Under the Renting Homes (Wales) Act 2016, the persons occupying the dwelling are called 'contract holders'. This is because they may or may not be tenants. Also, technically, there is only one 'tenant' for a single tenancy, as the tenancy cannot be divided. Under the occupation contract rules, there can be several contract holders for a single occupation contract, and separate contract holders hold individual rights to end the contract.

In the handbook, where reference is exclusive to tenants outside the Renting Homes (Wales) Act 2016, they will be referred to as tenants or licensees. If referring to lettings covered by the Renting Homes (Wales) Act 2016, they will be referred to as contract holders. If referring to either group, the phrase occupier will be used.

Who Is the Landlord?

A landlord is defined as the 'immediate landlord' and does not necessarily mean the "owner" of a property (although, in most cases, the landlord will also be the owner). A landlord could also be somebody named on the agreement and perhaps has an entitlement to possession some other way, such as by subletting from a superior landlord.

When this handbook refers to 'landlord', we mean the 'immediate landlord' unless stated otherwise.

Registration

Registration should not be confused with licensing under the Act; registration is entirely separate and only applies to landlords.

A landlord of a dwelling which is being offered to let or is subject to a 'domestic tenancy' needs to be registered.

If the landlord lives outside Wales and lets a property in Wales, the landlord still needs to register. Any number of properties (including just one) will trigger the requirement to register, and a single registration can cover all the properties owned by that landlord.

If a property has been recently purchased with an occupier in situ, registration must be done within 28 days from when the property has been assigned to the landlord.

Suppose a property has been purchased with an existing occupier in place. The owner does not intend to continue renting to the person and wants to occupy the property as their home. In that case, the owner does not need to register. This is subject to the landlord taking steps to recover possession within 28 days from when it was assigned to them and as long as they "continue to diligently pursue the recovery of possession". Advice may need to be sought for this situation because failing to register can have severe consequences for seeking possession.

How to Register

Registration is via Rent Smart Wales, operated by Cardiff City Council. An online form is available for completion, and a fee is payable.

The information required includes the following:

• The landlord's contact details.
• Date of birth.
• Details of all properties for which they are the landlord.
• If one, you must also provide details of any letting or managing agent appointed by the landlord.

Registration does not expire (subject to changes or revocation etc.), but Rent Smart Wales may charge a further fee after five years.

Each separate ownership "group" needs registration. For example, if Mrs Jones owns a single property, she must register herself and that property. If Mrs Jones then owns two more properties jointly with Mr Jones, this is a separate registration, and those properties need to be listed in this second registration.

Duty to Update

A landlord must notify Rent Smart Wales within 28 days of the following changes:

• any change in any of the contact information provided (including name, address, telephone and e-mail)
• the appointment of a letting or managing agent and if any previous ones have ceased to be appointed
• any assignment of the landlord's interest in the rental property

It is essential to highlight that if a landlord changes a letting or managing agent, this is a notifiable change and must be made within 28 days of the change.

Revocation of Registration

Rent Smart Wales may revoke the registration of any landlord who:

• provides false or misleading information
• fails to give details of any changes
• fails to pay any fee charged

Licensing

Any landlord or agent who performs lettings or property management activities on a 'domestic tenancy' must have a licence.

Self-managing landlords must obtain a licence, as do all letting and managing agents who let or manage property subject to a domestic tenancy in Wales.

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

Rent Smart Wales licensing and registration do not replace Housing Act 2004 licensing, including HMO licensing, and these continue to be required, as appropriate, in addition to the provisions outlined here.

Landlord Licence

A landlord needs a Rent Smart Wales licence and registration if the landlord is to carry out any one or more lettings or management activities. For agents, it is generally two or more on the list below, and those activities are:

• arranging or conducting viewings with prospective occupiers;
• gathering evidence to establish the suitability of prospective occupiers (for example, by confirming character references, undertaking credit checks or interviewing a prospective occupier); (Landlords but not agents)
• preparing or arranging the preparation of an agreement;
• preparing or arranging an inventory for the dwelling or schedule of conditions for the dwelling.
• collecting rent;
• being the principal point of contact for the occupier about matters arising under the agreement;
• making arrangements with a person to carry out repairs or maintenance;
• making arrangements with an 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 an agreement

Rent collection is unique because if an agent collects rent and nothing else, they will need a licence. Typically, agents must do at least two activities listed under "letting" or "management" activities.

Named landlords on occupation contracts and regulated tenancy agreements may have to apply for a licence and be registered. However, a licence will not be needed if the landlord does not carry out any letting or management activities (pre-agreement, during the agreement or after the agreement, but see below about repairs and maintenance after the agreement). They may appoint another party to carry out letting and management activities (typically a professional letting agent), provided the third party is licensed as an agent under Rent Smart Wales. Therefore, a licence is required only by 'self-letting or self-managing landlords', although all landlords letting under occupation contracts and regulated tenancies require registration.

Lettings or property management activities do not include anything the landlord does, arranging for an authorised agent to do something on the landlord's behalf.

It cannot be stressed enough that where a landlord uses a licensed agent, that landlord must not undertake any of those activities themselves without obtaining a licence. For example, a licence will first be required if a landlord wishes to make arrangements with a person to carry out repairs or maintenance at a time whilst the dwelling is subject to a domestic tenancy. Otherwise, it will be an offence. It's acceptable for the landlord to arrange with a licensed agent to get a repair or maintenance done, though.

It seems the landlord should be able to carry out the physical repair or maintenance themselves (subject to any law governing the repair or maintenance, such as gas safety rules) because the restriction defined in property management activities is for 'making arrangements' with a person to carry out the repair or maintenance. However, the agent must arrange access with the occupant if the landlord is not licensed.

It's okay for an unlicensed landlord to make arrangements for repairs and maintenance when the agreement ends because the dwelling will not be subject to a domestic tenancy at that time. However, despite the contract ends, the landlord must not check the contents or condition of the dwelling or arrange for them to be reviewed for any purpose connected with the previous agreement without a licence. A similar provision applies to agents. Only a licensed landlord or agent can determine the return of a deposit after the end of an agreement (or a specialist inventory clerk that does not need a licence – see later).

Landlords are well-advised to obtain a licence even if they use a managing agent. This would allow the landlord to conduct letting or property management activities, including checking the property's condition at the end of any domestic tenancy or arranging for repairs and maintenance during the agreement.

Exemptions

If a property has been recently purchased with an occupier in place, a licence must be applied within 28 days from when the property was assigned to the landlord. Suppose a property has been purchased with an existing occupier, and the owner does not intend to continue renting to the occupier and intends to occupy the property as their home. In that case, the owner does not need a licence if they take steps to recover possession within 28 days from when it was assigned to them and as long as they "continue to diligently pursue the recovery of possession". As with registration, you should seek advice because failure to have a licence could seriously affect possession. Passing property management (including serving possession notices) to a licensed agent might be a better solution.

Staff or Apprentices of Landlord or Agent (Connected Person)

Any person on a contract of service (employed) or an apprenticeship does not need to obtain a licence. Such a person is known as a "connected person". Staff or apprentices must complete the training as a condition of any licence granted to their employer.

The landlord Must Not Appoint an Unlicensed Agent

A landlord must not appoint or continue to allow a person to let or manage a property who does not hold a licence.

The test is whether the landlord 'should know' that the person does not hold a licence, so a landlord must check with the public register before the appointment: https://www.rentsmart.gov.wales/en/check-register/

This particular offence is a criminal offence with an unlimited fine. The rent-stopping orders, repayment orders and fixed penalties notices are not an option.

Obtaining a Licence

An application for a licence is made to Rent Smart Wales. You can find the current fee by contacting Rent Smart Wales or checking the website.

The information required will include the following:

• contact information
• details of any licences, 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)

Fit and Proper Person

For a landlord or agent to be granted a licence, they must be a "fit and proper person". Various things are considered, including any previous convictions or a failure to comply with some housing-related law (for example, a breach of an HMO licence).

Requirements with Training

It is a condition of all licences that the applicant and their connected persons (staff or apprentices) must complete training.

Training is available through Rent Smart Wales and other companies offering training approved via Rent Smart Wales. It is known as face-to-face training or online. The cost of training will be payable in addition to the licence fee, and the training cost varies depending on which provider is chosen.

A 'connected person' (persons employed or undergoing an apprenticeship) doing any one or more of the following activities will also need to complete the training (but won't need a licence):

Lettings activities

• arranging or conducting viewings with prospective occupiers;
• gathering evidence to establish the suitability of prospective occupiers (for example, by confirming character references, undertaking credit checks or interviewing prospective occupiers); (Landlords only, not agents)
• preparing, or arranging the preparation, of an agreement;
• preparing or arranging an inventory for the dwelling or schedule of conditions for the dwelling.

Property management activities

• collecting rent;
• being the principal point of contact for the occupier concerning matters arising under the agreement;
• making arrangements with a person to carry out repairs or maintenance;
• making arrangements with an 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 an agreement.

In addition to attending or completing the training, agents, landlords and staff will need to show they have learned the content of the training.

Licence Conditions and Code of Practice

Any licence granted will be subject to a condition that the statutory code of practice must be complied with. You should consult the code of practice for full details, but examples include the following:

• all statements made about a property, whether spoken, in pictures or writing, must be correct and not misleading
• you must seek the prospective occupier's consent before seeking a reference or carrying out a credit check
• during negotiations, you must provide the potential occupier with clear information on the terms of the agreement, length of fixed-term, costs and fees, deposit amount, a sum payable on signing, and guarantor requirements
• potential occupiers must be allowed to read a draft or sample agreement before signing their agreement
• you must not make deductions from a security deposit without suffering actual losses, and you must provide evidence to support claims

The statutory code of practice is available from the Rent Smart Wales resource page - https://www.rentsmart.gov.wales/en/resource-library/

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 connected person(s)
• 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 five 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 is dissolved in the case of a corporate body.

Appeals

An applicant may appeal certain decisions made by the 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 Wales and must be made within 28 days, beginning with the date the applicant was notified of the decision.

Enforcement, Penalties and Restrictions

Breaching several requirements under the Act is, in the main, a criminal offence and the licensing or local housing authority have powers of prosecution. Further, some severe penalties and restrictions also apply for breaches.

An agreement will remain valid and enforceable even if any of the several requirements under the Act is not complied with (except for rent ordered to be stopped or repaid or the inability to serve a notice to terminate the agreement).

Fixed Penalty Notices

For the majority (but not all) of the offences, Rent Smart Wales or a local authority may offer the person who allegedly committed one of the offences the opportunity to discharge any liability to conviction by payment of a fixed penalty.

If the person pays the fixed penalty within 21 days, the person will not be convicted.

Depending on the offence, the fixed penalty amount will be either £150.00 or £250.00.

Rent Repayment or Rent Stopping Orders

Where a landlord carries out property management activities or appoints an unlicensed agent, Rent Smart Wales (or a local housing authority) may apply for a rent-stopping order to the Residential Property Tribunal Wales.

The person who allegedly committed the offence does not have to have been charged or convicted for a rent-stopping order.

The effect of a rent-stopping order is to stop, for a period, any rent payable by an occupier. Legally the occupier will be considered to have paid this rent, and no rent arrears claim could be made.

A rent repayment order works similarly but applies to periodic payments of rent already paid to a person when some breach of the legislation had occurred. In addition to Rent Smart Wales or a local authority applying for a rent repayment order, an occupier may apply.

Possession Notices

No notice under sections 173 or 186 of the Renting Homes (Wales) Act 2016 may be given if:

• The landlord is not registered, or
• The landlord is not licensed and has not appointed a licensed person to carry out all property management work regarding the dwelling on the landlord's behalf.

This does not apply for 28 days beginning with the day the landlord's interest in the dwelling is assigned to the landlord.

It's interesting to note the wording carefully here. There is technically no requirement to appoint an agent under the Act, and the offence is to carry out letting or property management activities without a licence (including collecting rent). A landlord could lawfully appoint a licensed agent for just let only (letting work) but still be restricted from serving a notice because nobody is appointed for property management work.

Of course, an unlicensed landlord could not collect the rent without committing an offence. Still, in theory, the landlord could appoint one licensed agent to collect the rent and another agent to make arrangements with a person for repairs and maintenance. However, this would still have the effect that notice could be served because the landlord must appoint an agent to "carry out ALL property management work in respect of the dwelling on the landlord's behalf ".

Submitting a fully completed and paid application for a licence will be sufficient to allow the service of a notice.

Register of Private Rented Housing

Rent Smart Wales holds and manages a register of all licensed and registered landlords and agents. The information is public, although you can access only specific elements so that Rent Smart Wales wouldn't disclose the address of a private landlord, for example.

If a prospective occupier wishes to check a landlord or agent, or a landlord wishes to check if an agent has a licence, they can search the Rent Smart Wales website.