This guidance is for Wales

Legislation requires that property contract-holders only be charged certain fees (a 'contract-holder' is someone who rents their home under a tenancy or licence).

There are requirements for accommodation letting agents and property management businesses to display fees and charges to clients. There are also requirements that are part of the Rent Smart Wales licence conditions; without a licence, letting and management work at rental properties in Wales may not be undertaken.

Relevant businesses

The requirements relate to businesses that receive instructions from clients regarding accommodation to be let under occupation contracts to:

• Introduce prospective tenants to landlords with accommodation available for rent
• Arrange occupation contracts between landlords and tenants
• Carry out property management services for landlords

An 'occupation contract' is defined in section 8 of the Renting Homes (Wales) Act 2016:

"(1) An occupation contract is either:
    (a) a secure contract, or
    (b) a standard contract.
(2) A secure contract is a periodic contract.
(3) A standard contract is either a fixed term contract or a periodic contract."

Occupation contracts that are made by community landlords (local authorities, registered social landlords and other kinds of authority) are usually secure contracts, whilst occupation contracts made by private landlords are usually standard contracts.

Tenancy deposit schemes

Landlords and businesses that receive a tenancy deposit must transfer the deposit to an approved deposit scheme. The tenant must be provided with key information, including the name of the scheme and potential retention of the deposit.

More information on protecting tenancy deposits is available on the GOV.UK website.

Permitted fees

Landlords may only charge clients the following fees in respect of occupation contracts:

• Rent
• Security deposit. This is money paid as security for the performance of obligations of a contract-holder or discharge of any liabilities arising under or in connection with an occupation contract
• Holding deposit. This is money paid before an occupation contract is made, which must not exceed one week's rent (see the Welsh Government guidance linked to below for assistance in calculating the amount)
• Payments required in the event that the contract-holder fails to make a payment by the due date. The payment required must not exceed the prescribed limit (see the next section for more information on prescribed limits)
• Payments required in the event of the contract-holder breaching a term of the occupation contract
• Service charges
• Payments in respect of:
  • Council tax
  • Utilities (gas, electricity, etc)
  • A television licence, payable to the BBC
  • Communication services (landline telephone, the internet, cable and satellite television)
  • Further copies of written statements

All other fees are prohibited. A landlord may not give notice until any prohibited payments have been repaid.

Prescribed limits for failure to pay rent

Where a contract-holder fails to pay rent by the due date, the maximum default charges that may be made are as follows:

• Failure to pay rent up to and including seven days after the due date:
  • Zero
• Failure to pay rent later than seven days after the due date:
  • an annual percentage rate of 3% above the Bank of England base rate, charged daily, until the rent arrears plus the total of daily charges are paid

Where the contract-holder is in breach of contract requiring locks, keys or other security devices to be replaced, the default charge payable by the contract-holder can be no more than the actual cost of providing replacements, including any contractor labour charges (with an invoice or receipt as evidence).

Information to be provided

Before a holding deposit is paid to a landlord or letting agent, the following information must be provided to the prospective contract-holder:

• Amount of the holding deposit
• Address of the dwelling in respect of which the deposit is paid
• Where the holding deposit is to be paid to a letting agent or a landlord, the name and contact details of that letting agent or landlord
• Duration of the tenancy contract
• Proposed occupation date
• Amount of rent or other consideration
• Rental period
• Any proposed additional, modifications to, supplementary or omissions of terms from the occupation contract
• Amount of any security deposit
• Whether a guarantor is required and, if so, any relevant conditions
• What reference checks the landlord or letting agent will undertake
• Any information the landlord or letting agent requires from the prospective contract-holder

The required information must be provided to the prospective contract-holder in writing and may be given in person or provided by electronic means (if the prospective contract-holder consents to receiving it electronically).

Repayment of holding deposits

Where a prospective contract-holder is required to pay a holding deposit to secure first refusal on an occupation contract, that holding deposit must be repaid if the parties enter into the agreement before the deadline for agreement (except in the circumstances outlined below).

The holding deposit must also be refunded if the parties fail to enter into the agreement before the deadline for agreement (except in the circumstances outlined below).

If both parties agree to enter into an occupation contract, a holding deposit must be repaid to the contract-holder within 15 calendar days of payment (this is the 'deadline for agreement'). The deadline can be extended, though only by agreement of the parties in writing.

If both parties do not agree to enter into an occupation contract, then the deposit must be repaid within seven days of the deadline for agreement, whether that is 15 days from receipt, or another date as agreed by the parties in writing.

A holding deposit does not have to be repaid where:

• It is used towards the first payment of rent under the agreement
• It is used towards the payment of a security deposit under the agreement
• The prospective contract-holder provides false or misleading information to the landlord or letting agent that materially affects the decision whether to grant the agreement or not
• The prospective contract-holder notifies the landlord or letting agent before the deadline for agreement that they have decided not to enter into the agreement
• A landlord or letting agent takes all reasonable steps to enter into an agreement before the deadline for agreement, but the prospective contract-holder fails to take all reasonable steps to enter into it

For more information, see Renting Homes (Fees Etc) (Wales) Act 2019: Guidance for Landlords and Letting Agents, which was produced by the Welsh Government.

Note: on 1 June 2026, the name of the Renting Homes (Fees Etc) (Wales) Act 2019 was changed to the Renting Homes (Fees, Discrimination etc) (Wales) Act 2019; the guidance still applies.

Relevant fees

The fees that have to be indicated are the fees, charges and penalties payable to the letting agent by their clients under contracts for:

• Introducing contract-holders to landlords with accommodation available for rent
• Arranging standard occupation contracts
• The management of rental properties

However, the following fees do not have to be indicated:

• Rental charges
• Tenancy deposits
• Any fees, charges or penalties that the letting agent receives from a landlord under an occupation contract on behalf of another person
• Any other fees, charges or penalties specified in regulations

Display requirements

Letting agents must display a list of relevant fees:

• In each of their premises where they deal with clients or potential clients face-to-face
• On their website (if they have one)

This list must be displayed in a conspicuous place.

Fees content

The displayed fees list must include:

• An adequate description of each fee and its purpose
• Whether the fee is payable for the accommodation or by each contract-holder
• The total amount of the fee inclusive of all taxes
• The method of calculating the fee, if the fee cannot be determined in advance

Rent Smart Wales

Landlords and letting agents in Wales must have a Rent Smart Wales licence in order to undertake letting and management work at rental properties.

Information regarding use of a deposit protection scheme must be made available to the contract-holder within 30 days of receiving the deposit, and the contract-holder must be given an opportunity to check and sign the information given.

There are also requirements, as part of the Rent Smart Wales licence conditions, to be a member of a client money protection scheme and an independent letting and management redress scheme (as accepted by Rent Smart Wales). Professional indemnity insurance is also required.

More information on licensing is available on the Rent Smart Wales website.

Trading Standards

For more information on the work of Trading Standards services and the possible consequences of not abiding by the law, please see 'Trading Standards: powers, enforcement and penalties'.

In this update

General detail added and terminology updated.

Last reviewed / updated: June 2026