Today, 1 December 2022, the long-awaited Renting Homes (Wales) Act 2016 and the Renting Homes (Amendment) (Wales) Act 2021 came into force. These Acts have brought with them a sea change in the approach to residential housing law in Wales. The changes apply to the vast majority of tenancies, including those in existence prior to 1 December 2022. The Government has stated that it is not intended to apply to those tenancies which commenced prior to 15 January 1989. This piece considers the key changes for landlords to consider.
Purpose of the legislation
Following emergency changes brought in during the Covid-19 pandemic, Wales has long held a desire to increase tenant protections and security of tenure, whilst clarifying what is expected from all parties within the rental sector. This is a desire we are seeing replicated, although in differing ways, across the UK nations. However, Wales' new approach has done away with some of the most fundamental aspects of previous residential housing law as we knew it. Many of the changes are intended to be occupant-friendly and increase security and certainty for residential tenants.
Key changes
Terminology - Gone are the days of tenants, who will now be known as "contract holders", with tenancy agreements becoming "occupational contracts". Landlords remain, but will be specifically designated as either "community landlords" (usually where they operate within the social rental sector) or "private landlords" (simply anyone who is not designated a community landlord).
Written statements - This is the most urgent change that you should be aware of. The Acts require that whilst an occupational contract is still capable of being entered into orally, you must provide the contract holder with a written statement of all the terms of the agreement within 14 days. This applies from 1 December 2022. For pre-existing tenancies, a written statement must be provided within 6 months (by 31 May 2023) in order to avoid consequences for failure to comply. These could range from financial consequences (such as compensation or withholding of rent) to invalidating any future notices you may intend to serve.
Repairs and condition – You must ensure that your properties are fit for human habitation. There is now a general fitness obligation against all occupational contracts. Key aspects to ensure you have in order are:
1. Electrical safety testing - you must carry this out every 5 years.
2. Smoke detectors - you must have hardwired smoke detectors in your properties, on every storey.
3. Carbon monoxide detectors - these need not be hardwired but must be provided.
4. Structure and exterior - must be maintained to a compliant standard.
Where you are a landlord of a pre-existing tenancy, you have a grace period of 12 months to ensure that you are meeting the above obligations, in other words, by 30 November 2023.
Joint tenancies - Under the new Acts, you and your contract holders are no longer required to create a new occupational contract to add or subtract contract holders living in your property. This allows you greater powers to remove individuals who have carried out anti-social behaviour or other non-permitted activities within your property without removing other joint-contract holders. This also means that your contract holders can give notice to leave their tenancy without invalidating the occupational contract for the other joint-contract holders in residence.
Termination by section 21 notices - The old section 21 notice procedure has been replaced. In summary, you can no longer issue a no fault notice during the first 6 months of an occupational contract, and you must provide 6 months' notice, rather than the previous 2 months under the old regime. You also can only provide such notice if the contract is for a term greater than two years. This greatly limits your rights in comparison to the previous process and you should seek advice where you intend to serve such a notice.
Rent variations - In order to provide notice for rent variation, you must now give 2 months' notice, and can only do so 12 months after any previous change to rent took place.
Succession rights - Succession rights have been written into the Acts to allow for "priority" (spouse, partner or cohabitee) and "reserve" successors (non-priority family member who had previously lived with contract holder) where a contract holder dies during their tenancy. A new succession right for unpaid carers of contract holders has also been provided for in the Acts, subject to meeting certain criteria.
Abandonment - A court order will no longer be required in order for you to repossess your abandoned property where it can be shown that a four week warning notice has been provided, and you have carried out satisfactory investigations that the property has indeed been left abandoned.
Final thoughts
The changes brought in by the Acts are extensive and have been regularly changed and updated even in the immediate days prior to introduction. They have immediately introduced a wide variety of changes across the breadth of residential housing law. As such, you should seek legal advice to ensure you are complying with the new regulations. Our expert team including Kevin Kennedy and Maddie Dunn can advise you in this fast changing area.
Written by Eleanor Parsons and Maddie Dunn.