The Renting Homes (Wales) Act 2016, described as bringing about ‘the biggest change to Welsh housing law for decades’, is set to come into force on 1 December 2022. The Act is set to fundamentally change how landlords operate in Wales and is intended to make it simpler and easier to rent a home. Read this blog to find out more about what this means for landlords and tenants alike.
What changes are expected?
The Renting Homes (Wales) Act 2016 is introducing multiple changes in Wales, which include:
Changes to tenancies
Most current tenancies and licenses (including assured shorthold, assured and secure tenancies) will be replaced by a:
- secure occupation contract (replacing secure tenancies issued by local authorities and assured tenancies issued by Registered Social Landlords), or
- standard occupation contract (replacing current tenancies used in the private rented sector, ie by private landlords)
Under the Act, tenants will be known as ‘contract holders’.
Changes to landlords
There will only be two groups of landlords:
- community landlords (council and housing associations), and
- private landlords (any landlord who is not a community landlord).
Community landlords will generally provide secure occupation contracts while private landlords will generally provide standard occupation contracts.
Changes to tenancy terms
New standard terms will be introduced under the Act. These standard terms must be included in every occupation contract.
Further, landlords will have to issue contract holders with a ‘written statement’ within 14 days of moving in. The written statement must clearly set out the respective rights and responsibilities of the landlord and the contract holder. Failure to provide such a written statement (in the required time frame) or the provision of an incomplete or incorrect statement can result in penalties.
In other words, the written statement sets out and confirms the terms of the contract. The written statement must contain all necessary contractual terms, including:
- key matters (eg names of the parties and address of the property)
- fundamental terms (ie terms covering the most important aspects of the contract, including the possession procedures and the landlord’s obligations regarding repair)
- supplementary terms (which deal with the more practical, day to day matters applying to the contract, eg the requirement to notify the landlord if the property is going to be unoccupied for four weeks or more)
- additional terms (which addresses any other specifically agreed matters, eg a term which relates to the keeping of pets)
- terms explaining the meaning and importance of the contract
While the contracts can always be issued in hardcopy they can now only be issued electronically if the contract holder agrees.
Changes to ending tenancies
Under the Act, the rules on landlords ending a contract are changing, with the main changes including:
- the notice period required from a landlord under ‘no fault’ grounds (currently commonly known as a ‘Section 21 notice’) will be 6 months (the new notice will be a ‘section 173 notice’)
- the landlord not being able to give a no fault eviction notice until 6 months after the start of the contract
- the landlord not being able to give a no fault eviction notice unless they have complied with certain requirements (eg registration, health and safety provisions, licensing and deposit protection rules)
- if the landlord has served a no fault eviction notice but has not acted upon it, they cannot issue a new notice until 6 months after the expiry of the previous notice
- if a tenant does not leave at the end of a contract’s fixed term (and the landlord does not take steps to evict them), the contract will usually become a periodic standard contract and the landlord will have to serve a 6-month section 173 notice to end the contract
- landlord break clauses (ie clauses allowing the landlord to end a tenancy before the end of the fixed term) will only be allowed to be incorporated into a contract if the contract is for more than 2 years. Further, landlords will not be able to rely on a break clause within the first 18 months of the tenancy
Repairs and conditions of rented properties
The Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 set out 29 matters and circumstances which must be considered when determining whether a property is fit for human habitation. These 29 matters and circumstances include, but are not limited to:
- damp and mould growth (including house dust mites and mould or fungal growth)
- the cold (ie when temperatures fall below the minimum satisfactory levels for relatively long periods)
- asbestos fibres and Manufactured Mineral Fibres (MFF, which include rockwool and glass fibre blankets)
- crowding and space
Landlords must also maintain the structure and exterior of the property in repair and keep installations for the supply of water, gas or electricity, for sanitation, for space heating, and hot water in repair and proper working order.
Contract holders will be protected from ‘retaliatory’ or ‘revenge’ evictions. These occur when a landlord tries to evict a contract holder who has asked for repairs or complained about the condition of their home.
Under the Act, if a landlord responds to a request for repair by issuing a possession notice, a landlord will no longer be automatically entitled to possession if the courts are satisfied that the landlord issued the notice to avoid carrying out the repair. If a landlord’s application is refused on the grounds that it was a retaliatory eviction, they will not be able to serve a new no fault eviction notice until 6 months later.
For more information, read Retaliatory eviction.
Under the Act, contract holders can be added or removed from contracts without the need to end the contract and start another. This means that a joint contract holder will be able to move out without the contract ending for the remaining joint contract holders and that new joint contract holders can be added without having to end the current contract.
It is expected that this will make managing joint contracts easier and help victims of domestic violence by enabling the perpetrator to be targeted for eviction.
The Act will provide enhanced succession rights, making it easier for certain people (including some carers) to take over a person’s contract after their death (this is known as ‘succession).
Under these enhanced succession rights both priority and reserve successors can take over the contract of a deceased individual.
A priority successor is the spouse (or civil partner) of the contract holder, someone who lived together with the contract holder as if they were spouses (or civil partners) or someone who occupied the property as their only or main home at the time of the contract holder’s death.
A reserve successor is someone who is a family member of the contract holder, who occupied the property as their only or main home at the time of the contract holder’s death and they meet the basic residence condition (ie throughout the 12 months before the contract holder’s death they either occupied the property or lived with the contract holder).
A reserve successor can also be someone who:
- at any time in the 12 months before the contract holder’s death was a carer in relation to the contract-holder or a member of the contract holder’s family (who, at the time the care was provided, lived with the contract holder)
- occupied the property as their only or main home at the time of the contract holder’s death, and
- meets the carer residence conditions, which entails:
- meeting the basic residence condition (ie throughout the 12 months before the contract holder’s death they either occupied the property or lived with the contract holder), and
- there being no other property which the carer is entitled to occupy as a home at the time of the contract holder’s death
The Act introduces a new process for landlords to regain possession of a property that has been abandoned (ie if a contract holder leaves the property before the contract has ended, usually without letting the landlord know).
Landlords will be able to repossess an abandoned property without a court order, provided they have served a four-week warning notice and carried out investigations to satisfy themselves that the property is in fact abandoned.
What does this mean for landlords?
The Renting Homes (Wales) Act 2016 drastically changes renting in Wales for landlords and landlords will need to make sure they comply with all the necessary changes. This will involve:
- updating tenancy agreements to comply with the new secure and standard occupation contracts
- complying with the requirements on key terms to be included in the new contracts
- being aware of the new no fault eviction notices (and the notice period they entail)
- ensuring their rented property is fit for human habitation and that they maintain the property in good repair
- making sure not to evict contract holders who complain about the state of repair in their property
- understanding the new laws on joint contract holders
- honouring any succession rights is a contract holder dies
- understanding the new procedure for recovering abandoned property
For more information, read the Welsh government’s guidance.
What does this mean for contract holders (ie tenants)?
As with landlords, the Renting Homes (Wales) Act 2016 drastically changes renting in Wales for tenants (who are now known as ‘contract holders’). They should be aware of the changes and their rights under the law, which include:
- tenancy agreements becoming either secure or standard occupation contracts, which must include certain key terms and must be provided in a specified time frame
- greater security attached to renting (eg the no fault eviction process changing, entitling them to at least 6 months’ notice which can only be served at certain points during the tenancy)
- having a home that is fit for human habitation and in a good state of repair
- being protected from eviction by the landlords if they complain about the state of their property and ask for repairs to be carried out
- being able to remain in the property if they are joint contract holders and not all joint contract holders wish to move out (or, conversely, being able to move out of a property if none of the other contract holders wishes to leave) without the need for a new contract
- greater succession rights allowing certain people (eg a contract holder’s spouse) to remain in the property after the contract holder’s death
For more information, read the Welsh government’s guidance.
Remember to Ask a lawyer if you have any questions or concerns.