The Renting Homes (Wales) Act came into force today, marking one of the biggest shake-ups of Welsh housing law.
The Act has changed rental contracts, evictions and notice periods, and has introduced fitness for human habitation rules.
Kerry Barber, head of compliance at Goodlord, said: “This is really significant legislation and the implications for landlords and their agents are myriad. The main purpose of the act is to simplify how landlords rent properties and make being a tenant in Wales more ‘straightforward’.
“This means landlords in Wales will be facing changes to tenancy agreements and contracts, new legal obligations, and new safety requirements. In addition, Section 21 possession notices are being replaced with Section 173 notices.
“There’s a lot to get to grips with. Those who haven’t prepared for the changes must move quickly to ensure their house is in order and they don’t fall foul of the new regulations.”
Contract changes
The Act has replaced Assured Shorthold, Starter and Secure tenancies.
Tenants will become Contract Holders with tenancy agreements known as Occupation Contracts, while Assured Shorthold Tenancies and other fixed-term contracts or licences will become Standard Contracts (used by the private landlords). Secure or Assured tenancies will become Secure Contracts (used by social landlords).
Landlords must provide a written statement to the Contract Holder setting out the terms of the Occupation Contract within 14 days of the occupation date. Existing tenancy agreements will convert today, and landlords will have up to six months (by 1 June 2023) to issue the converted contract.
All Occupation contracts standard terms incorporated into them; ‘supplementary’ terms, which will be incorporated into contracts but can be excluded or amended by agreement; and ‘additional’ terms, which the parties are free to agree provided that they do not create any ‘incompatibility’ with the fundamental and supplementary terms.
Evictions
Section 21 possession notices are being replaced with Section 173 notices.
For new Standard Contracts landlords must give six months’ notice to ask a tenant to leave the property, and notice can only be given six months after the start of the contract.
There are exceptions. Namely where the tenant has breached one of the fundamental terms of the contract, such as serious rent arrears or anti-social behaviour.
For existing tenancies, landlords will have to adhere to the new six month notice periods from June 2023.
It’s written into contracts that anti-social behaviour in the property or locality are not tolerated.
Landlords won’t be able to evict on a retaliatory basis if a tenant complains about its condition.
Indeed, if a property is deemed unfit for human habitation at court then landlords will be prevented from serving a valid no-fault eviction notice for a period of six months.
Fitness for Human Habitation
The Act is introducing fitness for human habitation in Wales, which is based on 29 hazards under the Housing Health and Safety Rating System (HHSRS).
It includes keeping the exterior such as drains and gutters in repair as well as all services like gas, electricity, and water.
The property must also have a battery powered Carbon Monoxide alarm in every room that has a solid fuel burning appliance; a hard wired fire and smoke alarms installed at the property; as well as an Electronic Installation Condition Report (EICR) of the fixed wiring at the property at least every five years.
The hard-wired smoke detectors and electrical safety testing won’t apply until 1 December 2023.
Joint Contract Holders
If a new tenant leaves or arrives they can be added as a joint contract-holder under the same Occupation Agreement under permission of the landlord. They become jointly liable to the obligations set out in the contract from the day they become a joint Contract Holder.
A joint Contract Holder can leave the tenancy without ending the Occupation Contract. The joint Contract Holder will no longer have any rights or obligations to the tenancy once they leave, apart from issues accrued while they were a Contract Holder.
A hit to landlord confidence
Tim Thomas, policy and campaigns officer for Propertymark, said: “Letting agents and their landlords showed great flexibility [during] the pandemic in their support of extended notice periods, but again we have a government pursuing permanent changes [that] were supposed to be temporary measures.
“The Welsh government says extending notice periods is necessary to bring down the rising cost to taxpayers of temporary accommodation. What it fails to understand is the knock-on effect this strengthening of tenants’ rights will have on the confidence of landlords.
“Landlords have become important housing providers, but they need to know they can regain possession of their property when they need to. The best way to support tenants is to focus on policies that can increase the supply of housing rather than those that will constrain it.”
