Residential landlords of properties in Wales need to be aware of the extra regulatory burden that applies to them and particularly because breach could be a criminal offence.
The Welsh Assembly has added an additional layer of regulations which affect private rented residential property in Wales only and which are expected to come into force in autumn 2015.
The new regulations require –
- all private sector landlords and letting and managing agents to be registered with the licensed authority (currently Cardiff) and
- all those carrying out property management activities have to be licensed.
If a private residential landlord does want to manage its own portfolio, it must obtain a licence from the authority and for this it will have to –
- pass a “fit and proper person” test,
- follow a code of conduct and
- attend and pass a one day training course.
- The Regulations allow the authority to charge a fee but the fees policy is not yet available!
As part of the licensing arrangement, landlords will be required to notify the licensing authority of changes in circumstance including the sale of a rental property. There is a grace period of 28 days for the outgoing and incoming owners to notify the licensing authority of the change in ownership and for the new owner to register.
Typically the cost to a residential landlord of instructing a managing agent is around 10% of the rental income each month plus one off costs for tenant find services, AST and inventory preparation, tenant check in and check out, deposit protection and renewals. However, given the increasing regulatory burden for private residential landlords in Wales it seems increasingly advisable to pay an accredited managing agent to do the job.