Wales Prohibited Payments: What Landlords Can and Cannot Charge

The Permitted Payments List

The Renting Homes (Fees, Discrimination etc.) (Wales) Act 2019 works by exception — anything not on the permitted list is prohibited. Schedule 1 of the Act lists the only payments a landlord or letting agent in Wales can require from a contract-holder or prospective contract-holder:

• Rent — the periodic payment under the occupation contract
• Security deposit — money held as security against the contract-holder's obligations (no statutory cap in Wales, but must be protected in an authorised scheme within 30 days)
• Holding deposit — a reservation payment before the contract is signed, capped at one week's rent
• Default payments — charges for specific contract-holder defaults, only where the contract provides for them (for example, replacement keys at reasonable cost, or interest on late rent at no more than 3% above the Bank of England base rate)
• Council tax and utilities — where the contract-holder is responsible under the contract terms

That is the full list.

What Counts as Prohibited

Any payment demanded by a landlord or letting agent that does not appear in Schedule 1 is a prohibited payment. Common examples:

• Administration or setup fees — for drawing up contracts, processing applications, or registering the contract-holder
• Referencing or credit check fees — charged to the prospective contract-holder
• Viewing fees — for arranging or attending a property viewing
• Inventory fees — for preparing the check-in or check-out report
• Renewal or extension fees — for issuing a new fixed-term contract
• Professional cleaning fees — mandatory clauses requiring professional end-of-tenancy cleaning are unenforceable

The law classifies payments by their underlying purpose, not the label the landlord assigns. Calling a prohibited fee a "damage waiver" or "property access charge" does not make it lawful.

Enforcement

Demanding or accepting a prohibited payment is a summary criminal offence under Section 2 of the 2019 Act. Local housing authorities are the enforcement bodies. They can issue a £1,000 fixed penalty notice or prosecute through the magistrates' court.

Beyond the fine, a prohibited payment has a second consequence: it blocks Section 173 possession notices. Under Section 177 of the Renting Homes (Wales) Act 2016, a landlord who has received an unlawful prohibited payment that has not been refunded cannot serve a valid no-fault notice.

The Holding Deposit Trap

Holding deposits sit on the permitted list but with strict conditions. The cap is one week's rent, calculated against the rent that will apply under the prospective occupation contract. Taking £50 more than one week's rent converts the excess into a prohibited payment, exposing the landlord to enforcement action and the Section 173 block.

The 15-calendar-day period is the deadline for agreement. If the contract is made or the deadline passes without a contract due to landlord default or no fault of the applicant, the holding deposit must be refunded within seven calendar days of that event unless the contract-holder consents to applying it toward the first rent payment or security deposit. If the landlord retains it under a statutory ground, a written explanation must be given within seven calendar days or the right to retain it is lost.

Practical Compliance

For deposit-related payments, the safe sequence is:

1. Holding deposit (if used): no more than one week's rent
2. Security deposit: any agreed amount, protected within 30 days
3. No other payments: no admin fees, no inventory charges, no checkout fees

If a letting agent attempts to pass a prohibited fee through to the contract-holder, the payment can still be prohibited under the Act, which applies to landlords and letting agents.

The Wales deposit protection guide includes the full permitted payments checklist and a holding deposit agreement template.

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