Rent Smart Wales

Introduction

As a result of the Housing (Wales) Act 2014, landlords with rental properties in Wales have been required to be registered with the Welsh licensing authority, Rent Smart Wales (RSW). Landlords who undertake any management duties for any of those properties must also be licensed with RSW, as must all letting agents.

RSW came into existence on 23 November 2015. Since 23 November 2016, enforcement of RSW requirements has been in operation. It is a criminal offence not to comply with RSW requirements and will severely impact your traditional rights as a landlord such as your ability to take possession of your property.

Including the information on this page, the NRLA has a RSW licence conditions page. You can also visit the RSW website and their resources page.

When should a landlord be licensed?

Licence conditions

As well as undertaking training, licence applicants will have to be a 'fit and proper' person, abide by a Code of Practice (see below) and licensing conditions, and supply the necessary information to the RSW (including ensuring the details provided remain up to date).

There is no uniform set of licence conditions that will apply to landlords. While some standard conditions, like abiding by the Code of Practice and keeping information current, will apply to all landlords, RSW can and will tailor specific conditions to each landlord. Further, agents will have to follow a separate set of conditions. Landlords and agents may expect to have the following as conditions of their licences:

Landlord expected conditions:

• declared a Fit & Proper Person
• abide by Code of Practice
• obtain one day's training
• follow terms of Rent Smart Wales branding guidelines
• maintain updated information

Agent expected conditions:

• declared a Fit & Proper Person
• abide by Code of Practice
• obtain one day's training
• have client money protection
• personal indemnity insurance
• member of Ombudsman/Redress Scheme
• follow terms of Rent Smart Wales branding guidelines
• must agree to NOT take-on unregistered landlords
• maintain updated information

As a licence condition, agents are advised to NOT take on unregistered landlords. If an unregistered landlord retains the services of an agent, the agent is required to inform the landlord that they have 12 weeks to become registered. If the landlord does not, the agent MUST inform RSW, which will use its enforcement powers to go after the landlord. The agent will have access to the landlord register, which will be publicly accessible online, to determine if the landlord has complied. The compliant landlord must furnish their registration number to the managing agent.

Further conditions may be imposed as is appropriate by RSW.

Licence holder's duty to update information

The licence holder must notify the RSW in writing within 28 days of a licence holder name change and other changes as prescribed. Failure to update information is a criminal offence.

Amendment of licences

RSW can amend the licence. This can include imposing new conditions as well as changing existing conditions. The requirement to comply with the Code of Practice cannot be altered. Notification must be given of the opportunity to make representations, unless the licence holder consents to the amendment or RSW considers that there are exceptional circumstances which means it needs to be made without delay. The licence holder must be informed of the changes. The changes to the licence do not take effect pending the outcome of any appeal.

Revocation of licences

RSW has power to revoke a licence if:

• The licence holder has breached a condition of his/her licence.
• RSW no longer considers that the licence holder is a "fit and proper person."
• The licence holder has failed to update information.
• The licence holder and RSW agree that the licence should be revoked, e.g. because someone is no longer managing properties.

Prior notification must be given and the opportunity to make representations, unless the licence holder consents or RSW consider that exceptional circumstances exist and it needs to be revoked without delay. On revocation a licence holder must be told that the revocation has been made. Revocation does not take effect pending any appeal.

Where an agent's licence is revoked the landlord must be told as must any tenants of a property registered in the landlord's name. Where an agent's licence is revoked this puts the landlord in difficulties because he is potentially instructing an unlicensed agent or may have to carry on management without himself/herself having a licence. The landlord in this situation will have to immediately instruct a licensed agent or apply for a licence himself/herself.

Expiry/renewal of licences

Licences last for five years. They will continue in force provided the licence holder applies for a renewal during the period of 84 days before the date of expiry. If the renewal application is made within this period then the licence continues in force while the application is dealt with by RSW. It then only expires if renewal is refused. Similar requirements apply as for the original application. If renewal is refused then this does not take effect pending any outstanding appeal. The licence also expires automatically if the licence holder dies or a limited company licence holder is dissolved.

Licensing appeals

An applicant/licence holder can appeal licensing decisions to the First Tier (Residential Property Tribunal). This includes: refusal of a licence, a licence condition (other than to comply with the Code of Practice), amendments to a licence, or revocation of a licence.

An appeal must be made within 28 days of the date of notification of the decision which is being appealed. There is power for the Tribunal to extend this period for good reason.

Joint landlords and trustees

If trustees are the landlord the trustees can collectively register or licence. All joint landlords could be licensed. If there are joint landlords it appears that only one need be licensed. Cardiff Council have recently advised that the "lead" landlord, or the landlord who is responsible for overseeing lettings/management work for him/herself and on behalf of others would need to be licensed as an agent because the landlord who acts for all the unlicensed joint landlords would be registered as agent for them.

Limited Companies/Company Officers

A landlord or agent that operates through a limited company must be registered. A person acting on behalf of a landlord, whether as an individual or for a company, must be licensed as an agent.

Individuals operating on a contract of service for a company, for example an agent formally employed by a professional letting agency, are excluded from the individual licensing requirement, as the employer's licence would cover the employee. The employee is not exempt from the training requirement.

The same licensing exclusion applies to individuals employed by a landlord if there is a contract of service in place establishing an employer-employee relationship between the individual and the landlord. In this scenario, the employee would be covered by the landlord's agent licence.

Directors and secretaries of limited companies that undertake lettings and/or property management activities who are not employees of the limited company are caught by the agent licensing provisions of the Housing Wales Act 2014, and must obtain an agent licence.

Agents

Agents are required to be licensed to carry out property management work

A person acting on behalf of a landlord of a property subject to a domestic tenancy must be licensed in order to carry out property management work. Failure to comply is a criminal offence.

For these purposes property management work means doing any of the following:

• collecting rent
• being the principal point of contact for the tenant
• making arrangements for someone else to carry out repairs or maintenance
• making arrangements for the tenant (or occupier) to obtain access or for any purpose
• checking the contents/condition of the dwelling (or making arrangements for this to be done)
• serving notice to terminate a tenancy

Additionally, if a tenancy has ended, the person acting on behalf of the landlord must not check the contents/condition of the dwelling (or arrange for this to be done) for any purpose connected to the tenancy unless the person concerned is licensed. However, this does not apply if the person acting on behalf of the landlord does not do anything else except preparing (arranging for the preparation of) any inventory/schedule of condition and so long as that person does not undertake any other management work in relation to the property.

Exceptions to the requirement for agents to be licensed to carry out property management work

For these purposes property management work does not include doing any one of the listed items so long as the person concerned does not do any of the other things and has no involvement with the letting of the property. Additionally, property management work does not include:

• doing anything as an employee of the landlord (or the landlord's apprentice)
• doing anything as an employee (or an apprentice) of an agent
• doing anything as a contractor instructed on behalf of the licensed agent – this exception for the contractor does not extend to the landlord (whether licensed or not) but only the contractor working on behalf of the licensed agent.

Who is exempt for the agent licensing requirement?

There are exclusions from the requirement to be licensed to carry out lettings work as an agent:

• publishing advertisements/disseminating information or providing the means (such as a platform) for landlords/agents to make direct contact with the tenant in response to advertisements or information which is disseminated so long as no other kind of lettings work is performed and the person concerned carries out no property management work in respect of the property
• arranging or conducting viewings for prospective tenants so long as the person concerned does nothing else in connection with the letting and is not undertaking property management work in connection with the property
• preparing and arranging for the preparation of a tenancy agreement, again so long as no other lettings work is undertaken and the property is not managed
• preparing or arranging for the preparation of an inventory/schedule of condition, again so long as nothing else is done in connection with lettings or in relation to the management of the property. This will exclude an inventory clerk from the need for a licence but only if they simply undertake the check in inventory (the check out is management work)
• anything done by an employee of the landlord (or an apprentice working for the landlord)
• anything done by an employee (or apprentice) of a licensed agent
• anything done by a contractor appointed by a licensed agent. This, for example, would cover a self employed contractor such as a workman working on behalf of an agent. NB: There is no similar exclusion for contractors working on behalf of a landlord, whether licensed or not. If that contractor is engaged in lettings work then he/she must be licensed.