Is your Agent delivering a safe and professional service

The aim of the Rent Smart Wales AuditWhen will an Agent be audited?What is the audit process?How is the audit conducted; and who is the audit conducted by?How is the audit graded?Common FailingsWhat happens if the Agent does not engage in the Audit process?What can happen as the result of an Agent Audit?

The aim of the Rent Smart Wales Audit

Any Agent holding a licence with Rent Smart Wales is required to comply with a set of conditions that protect the interest of both landlords and tenants and raise standards in the Private Rented Sector.

To ensure that these conditions are met audits are undertaken. These audits test the Agent’s compliance with their licence condition, the Code of Practice and legislative requirements. At the end of the audit, the agent is provided with an action plan to improve processes and procedures where required.

The audit process has been designed to assist Agents to improve. In the first instance agents undertake a self-assessment of their own compliance with the regulations that they are governed by before the formal audit appraisal is undertaken.

Audits are conducted through a questionnaire, which is typically sent out to the Agent by e-mail. The questionnaire also requires the Agent to provide Rent Smart Wales with a number of specific documents to help the Agent evidence the answers they have given.

At the end of the audit, the Agent will be graded as one of the following. Click each grade for more information.

  1. Urgent Action Needed
  1. Action Needed
  1. Satisfactory
  1. Best Practice
  1. The Agent does not have the following business safeguards in place:

    • Client Money Protection,
    • Professional Indemnity Insurance, and/or
    • Membership to a Government Approved Redress Scheme.

    This includes the protection not being supplied, being out of date, being in the incorrect legal entity name (i.e: not in the name of the licensee). More information on the business safeguards can be found here:

    Agent Business Safeguards - Provider Details
    Business Safeguards for Agent Licence Conditions

  2. The Agent does not have valid Gas Safety Certificates for the Sample Properties requested including: not supplying, not being satisfactory and not being in date.
  3. The Agent does not use GasSafe registered gas engineers.
  4. The Agent does not have electrical certificates in respect of the Houses in Multiple Occupation properties they manage.
  5. The Agent has failed to adhere to Improvement/Prohibition Orders.
  1. The Agent does not display fees on their website
  2. The Agent does not have Energy Performance Certificate indicators on their property advertisements in Offices, website and/or any other online marketing presence
  3. The Agent does not refund Holding deposits in line with the Renting Homes (Fees etc.) (Wales) Act 2019
  4. The Agent specifies unfair clauses within the tenancy agreement
  5. The Agent does not comply with mandatory and additional licensing schemes for Houses in Multiple Occupation
  1. The Agent does not have an equalities policy in place.
  2. The Agent does not have a process in place to inform Rent Smart Wales of unregistered landlords within 12 weeks.
  3. The Agent does not ensure that new staff are trained within 3 months of commencing letting and managing activities
  4. The Agent’s property adverts are not correct or clear and/or is misleading about the properties
  5. The Agent does not provide evidence to support agent/client losses as a result of a tenancy

Information about Best Practice

When will an Agent be audited?

A licensed Agent is audited at least once during their 5-year licence period. Dependent on the results of their audit, review audits may be required within the same licence period.

Will the Agent be notified of an upcoming audit?

Yes, the Agent receives a notification by e-mail of an impending audit giving at least 7 days warning, at this time the Agent is expected to ensure that the following are up-to-date on their Rent Smart Wales Agent account:

  • Managed Properties List,
  • Business Safeguards (Client Money Protection; Professional Indemnity Insurance; Membership of a Government Approved Redress scheme; or membership of an approved professional body),
  • Connected users (all employees who undertake letting and management activities should be linked, and those who are no longer employees should have been removed),
  • Outstanding Property Invites accepted or declined.
  • Correspondence details on agent account.

Here is a guide on updating an Agent Account.

What is the audit process?

The audit is completed and assessed in seven stages:

1. Notification of Impending Audit

An audit is scheduled for the forthcoming months, time for the Agent to get their Rent Smart Wales account in order.

2. Pre-Audit Questionnaire

The Agents opportunity to self-assess their compliance, to demonstrate and evidence compliance and submit the required documentation.

3. Additional Information Request

Following an assessment of the completed Pre-Audit Questionnaire and associated documentation; this will provide the Agent with another opportunity to demonstrate compliance where the Agent Auditor needs clarification on working practices or further evidence.

4. Appraisal

Following the return of any requested additional information, the information and documentation will undergo an appraisal by the Agent Auditor to test compliance, after which the Auditor will create a final report and action plan.

5. Final Report and action plan

Containing the grade awarded, sent out by post; or a Password Protected e-mail.

6. Post Audit Action Plan

The Action Plan provides the Agent with a set of actions that they need to complete to ensure compliance with their licence conditions, the Code of Practice and legislative requirements. The Agent will need to complete and return the Action Plan, providing any further requested evidence; or making required changes to their processes.

7. Action Plan review

The Action plan will be reviewed by the Agent Auditor who must be able to evidence compliance with anything outstanding.

How is the audit conducted; and who is the audit conducted by?

The audit is conducted through a questionnaire (Pre-Audit Questionnaire), which is sent out to the agent typically via e-mail. The questionnaire is made up of five sections:

  • Licence Conditions;
  • Before Letting;
  • Setting up a Tenancy;
  • During a Tenancy, and
  • Ending a Tenancy.

A copy of the Pre-Audit Questionnaire which also details the 20 documents required can be found here.

As well as the Pre-Audit Questionnaire, the Agent will receive a list of sample properties that have been randomly selected from their Managed Properties list, for which they may be required to provide evidence of any or all the following:

  • Gas Safety Record
  • Gas Appliance Inspections
  • Energy Performance Certificates

Once all of the information has been returned, a thorough review of all the information is conducted by our Agent Auditors .In some circumstances, Welsh Local Authorities officers will sometimes undertake audits on Rent Smart Wales’ behalf.

How is the audit graded?

The audit grade is calculated dependent on the number of questions answered unsatisfactorily or the Agent failing to show compliance with starred (important) questions as set out below.

Audit Section Compliance
Audit GradingDescriptionAudit Response
1 - Urgent Action Needed
Major Areas of Concern (Regulatory)
Warrants enforcement action. Legislation not followed. Legal requirements continually not being met, licence revocation considered.More than 75% of questions answered unsatisfactorily
Any 3*** question answered unsatisfactorily
2 - Action Needed
Areas of Concern (Cautionary)
May warrant enforcement action. Partially compliant with legislation. Not all legal requirements are met.More than 50% but less than 75% of questions answered unsatisfactorily
Any 2** question answered unsatisfactorily
3 - Satisfactory
Non-Critical Areas of Concern
Complies with all legislation. All legal requirements are met with some best practice and striving to improve.More than 25% but less than 50% of questions answered unsatisfactorily
Any 1* question answered unsatisfactorily
4 - Best Practice
Achieving Best Practice and Legal Compliance
No significant areas of concern. All legal requirements are met as well as majority of best practice requirements.Less than 25% of questions answered unsatisfactorily.

Urgent Action Needed Grade

If an agent is graded as ‘Urgent Action Needed’, then the final report and action plan is sent out with Rent Smart Wales’ proposal to revoke the Agent’s licence. The Agent then has 21 days to provide any representations, which will be considered when a decision regarding the revocation is made.

Representations by the Agent are to be made through the Agent’s completion and submission of the Agent Audit Action Plan to Rent Smart Wales.

Rent Smart Wales reserves the right to propose to revoke any agent licence regardless of the Audit grade where there is a risk to the tenant, landlord, agent or a breach of licence conditions.

What happens if the Agent does not engage in the Audit process?

Where an Agent is not engaging with the Audit process, Rent Smart Wales has the power to issue legal notices under Section 37 of the Housing (Wales) Act 2014. This requires the recipient to provide documents within a specified time.

Failure to comply with this request is an offence under Section 38 of the Housing (Wales) Act 2014.

What can happen as the result of an Agent Audit?

An audit grade and certificate is issued. The Agent can display this certificate and publicise their grade but there is no legal requirement to do so at this time.