The next item is the Renting Homes (Fees etc.) (Prescribed Limits of Default Payments) (Wales) Regulations 2020. I call on the Minister for housing to move the motion. Julie James.

Motion NDM7273 Julie James

To propose that the National Assembly for Wales; in accordance with Standing Order 27.5:

1. Approves that the draft The Renting Homes (Fees etc.) (Prescribed Limits of Default Payments) (Wales) Regulations 2020 is made in accordance with the draft laid in the Table Office on 28 January 2020.

Motion moved.

Diolch, Llywydd. This is the fourth statutory instrument to be made under the Renting Homes (Fees etc.) (Wales) Act 2019. The Act creates offences for a landlord or letting agent to require certain payments in consideration of granting, renewing or continuing a standard occupation contract. Any payment of money is prohibited unless it is permitted under section 4(1)(a) or is a permitted payment by virtue of Schedule 1 to the Act.

Paragraph 6 of Schedule 1 to the Act provides that regulations may prescribe a limit on a default payment in respect of a failure by the contract holder to pay rent by the due date and specify any additional description of default. In such cases where the contract holder is at fault, the landlord may require the contract holder to make a payment in default. These regulations specify prescribed limits for certain types of payments required in the event of a default by a contract holder of a standard occupation contract in relation to late rent and the cost of changing, adding or removing a lock and replacement of a key or other security device. Following our public consultation, it was clear that these are amongst the most commonly charged default payments and, as stakeholders suggested during scrutiny of the Bill, the ones most open to abuse.

In relation to late rent, the prescribed limit will be determined by regulation at the Bank of England base interest rate plus 3 per cent as an annual percentage rate, or APR, on the overall amount outstanding, seven days after the rent was due. This will prevent a landlord or agent from issuing unduly high charges for late payment of rent, which can create a cycle of debt and undermine the ability of the contract holder to sustain the tenancy. 

In relation to the cost of changing, adding or removing a lock and the replacement of a key or other security device, the regulations will ensure that landlords do not have to cover the cost of these when the contract holder is at fault and that contract holders are only charged the actual cost. I intend to monitor the impact of these regulations along with the Act in general; this will assist in determining whether limits needs to be placed on other default payments in the future. Diolch.

The Deputy Presiding Officer (Ann Jones) took the Chair.

Thank you. I have no speakers. Therefore, the proposal is to agree the motion. Does any Member object? No. Therefore, the motion is agreed in accordance with Standing Order 12.36. 

Motion agreed in accordance with Standing Order 12.36.