Advance warning on changes in landlord and tenant law in Wales

June 22, 2021

If you are a landlord in Wales, you probably know that Welsh law is diverging from English law.

We have already had the Housing Wales Act 2014 which introduced registration and licensing.  However, there are two more acts passed but not yet in force, which will cause even more upheaval:

As you can see, it is taking so long to get this legislation ready that there is already an amendment act before the primary legislation has com into force!

It’s not known exactly when these new laws will come into force and things have been delayed by the coronavirus, but it is believed now that it may be late 2022 or 2023.  But here is a bit of advance warning for you!

Background to the new legislation

The private renting sector regulations for Welsh landlord has long been a difficult area to understand, due to its convoluted nature as a ‘mixed bag’ between existing English law and regulations created by the Welsh assembly.

These new acts aim to simplify the law, rather than having the law mixed between England & Wales, the hope from the Welsh assembly is that this will create a single legal framework that is understood by all.

Those who remember the Law Commission’s report of 2006 which was never implemented by the English Government may be interested to know that their recommendations have been used in part in this new Welsh system.

With that being said, here are the most important changes that will occur when these two acts come into force.

No-fault Notice Period

One significant change that landlords should be aware of is the change of the minimum notice period for no-fault evictions (section 173 evictions) from two months to six months. On top of this, landlords will be unable to evict a sitting tenant on the basis of ‘no fault’ during the first six months of the tenancy.

This effectively means that tenants will receive the security of twelve months immunity from no-fault evictions from the start of the tenancy.

It should be noted that this change will only apply to standard contracts, rather than secure contracts. Standard contracts & secure contracts will be brought in with the 2016 Renting Homes Act. Most private tenancies will be standard contracts.

With that being said, landlords will still be able to seek to repossess their property if a tenant is in breach of a contract under a short notice (as well as section 8 evictions with mandatory & discretionary grounds).

The act also removes a landlord’s ability to serve a section 173 (no-fault) notice until after six months of any previous section 173 notice.  Meaning landlords will not be able to constantly serve 173 notices ‘just in case’.

Standard & Secure Contracts

The act will revolutionise the different tenancy types that landlords and tenants will be able to enter into.

So assured and assured shorthold tenancies and the rights that they afford landlords and tenants will no longer apply in Wales. To replace them there are two separate types of tenancy – Secure and Standard Contracts.

However, note that protected tenancies under the Rent Act 1977 will remain.

Standard Contracts: Standard contracts can be either periodic or fixed term. The rights afforded to the landlord and tenant are similar to that of an Assured Shorthold Tenancy with the landlord able to remove the tenant with or without cause so long as they gave the proper notice.

However, at the end of a fixed-term standard contract, the occupier will automatically be granted a new periodic standard contract if they remain in occupation on similar terms and conditions to the previous fixed-term contract.  

Secure Contracts: these are strictly periodic tenancies and will be similar to secure contracts currently.  The agreement itself will be based on the local authority secure tenancy agreement.

This is the default type that most social landlords (in the act they are described as ‘community landlords’) will have and are similar to the current secure tenancies. In secure contracts, the landlord cannot remove a tenant based on a ‘no-fault eviction’.

Prescribed Information & Model Tenancies

The Act requires prescribed information to be given to the tenant regarding the tenancy, similar to the current rules on tenancy deposits. This written statement will also contain in a clear manner the rights and responsibilities of both the landlord & the tenant.

The Welsh government are creating model forms of tenancy agreements for landlords to use.

It will not be mandatory to use the model form of contract, but any changes or deviations must be clear and transparent. In addition to this, within any contract, there are fundamental and supplementary terms that must remain within the tenancy agreement (these are key terms as well as rights of both parties).

Fitness for Human Habitation

Another significant change will be the introduction of the Fitness for Human Habitation regulations.

Currently, a lot of regulations (such as the Smoke & Carbon Monoxide alarm regulations) are only applicable in England. However, this new law will create new regulations for fitness for human habitation within Wales.

This will include, for instance, functioning smoke alarms, carbon monoxide detectors and electrical and gas safety certificates to be in place for each dwelling let (there is no legal requirement to do so at the moment).

In addition, rent will not be payable for any period during which the dwelling is not fit for human habitation under these regulations.  While the regulations have not been made yet, they are expected to mirror similar property condition laws in England.

In addition to this, landlords will not be able to evict a contract holder just because they have complained about the condition of the property (commonly known as a ‘retaliatory eviction’). If a landlord applies to court for a possession order but it is refused on the grounds that it was a retaliatory eviction, the landlord cannot give a further ‘no fault’ notice until 6 months later.

Significant Contractual Changes

In addition to this there are also a variety of changes to the way that contracts will work:

  • Break Clauses: The Act will prevent landlords from including break clauses in fixed-term contracts of less than 24 months and will prevent the activation of a break clause within the first 18 months of any fixed term contract.
  • Joint Contracts: The new approach to joint & several contracts will be changed. Currently, landlords will have to create a new tenancy when one tenant leaves or changes. The new approach will enable tenants to be removed or added without the need to create a new tenancy, so long as all parties consent in writing (the landlords right to refuse consent is subject to reasonableness rules which are set out in one of the schedules).
  • Abandonment: There will be a new procedure and process that landlords will go through in order to obtain possession of a property that has been abandoned.
  • Succession: Similar to abandonment, the Renting Homes Act will create a new procedure to make it easier for people to take up a person’s tenancy in the event of their death.

Conclusion

When these new acts come into force they will cause a seismic shift in the law in Wales, giving Wales an independent framework for the private rented sector.

While some of these changes mirror current English regulation, some changes will be completely new for landlords.

Note that the rules are still being reviewed and the final version may differ from this article.  Even so, if you manage rented property in Wales you may want to prepare yourself by reading up on the government guidance.

This is a guidance booklet on the 2016 Renting Homes (Wales) bill: https://gov.wales/sites/default/files/publications/2020-02/renting-homes-act-guidance_0.pdf

There is currently no government guidance on the 2021 Renting Homes Amendment bill but there is explanatory notes which can be found here: https://www.legislation.gov.uk/asc/2021/3/pdfs/ascen_20210003_en.pdf

When the new rules do finally come into force we will be providing extensive guidance on Landlord Law for our Welsh members.

Not a Landlord Law member?  Find out more here.
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