Blog - 8th December 2022

Blog - 8th December 2022

In this blog I consider how housing in Wales is being transformed by the implementation of the Renting Homes (Wales) Act. No longer are there tenants and licensees in Wales. Instead there are ‘contract holders’ with enhanced rights.

This month has seen the biggest change to housing law in Wales for decades with the implementation on 1st December 2022 of the Renting Homes (Wales) Act 2016. This will change the way all landlords in Wales rent their properties, improving how rented homes in Wales are rented, managed, and lived in.

The Welsh Parliament in Cardiff

All social and private tenants will see some changes in the way their contracts are provided, in the way their homes are maintained and in how they communicate with their landlords.

All social and private landlords, including those who rent their properties through management companies or agents, will need to comply with the new law and make the necessary updates to their properties and paperwork.

Under the new law, tenants and licensees are now known as 'contract-holders'. Tenancy agreements have been replaced with 'occupation contracts'. The new law will make renting easier and provide greater security. For contract-holders this will mean:

• Receiving a written contract setting out their rights and responsibilities
• An increase in the ‘no fault’ notice period from two to six months and greater protection from eviction
• Improved succession rights that set out who has a right to continue to live in a dwelling, for example after the current tenant dies
• More flexible arrangements for joint contract-holders, making it easier to add or remove others to an occupation contract

For landlords this will mean:

• A simpler system, with two types of contract: ‘Secure’ for the social rented sector and ‘Standard’ for the private rented sector.
• Ensuring homes are fit for human habitation (FFHH). This will include, electrical safety testing and ensuring working smoke alarms and carbon monoxide detectors are fitted.
• Abandoned properties can be re-possessed without needing a court order.

There are four types of terms that can feature in occupation contracts:

• Key matters: The names of the parties and address of the property. These must be inserted in every contract.
• Fundamental Terms: Cover the most important aspects of the contract, including the possession procedures and the landlord’s obligations regarding repair.
• Supplementary Terms: Deal with the more practical, day to day matters applying to the occupation contract, for example, the requirement for a contract-holder to notify the landlord if the property is going to be empty for four weeks or more.
• Additional Terms: Addresses any other specifically agreed matters, for example a term which relates to the keeping of pets. Any additional terms must be fair, as required by the Consumer Rights Act 2015.

Landlords must issue a ‘written statement’ of the occupation contract to all contract-holders (this will replace the current tenancy or licence agreement). The written statement must contain all the terms of the contract.

For new rentals after the implementation date, the written statement must be issued within fourteen days of occupation under the contract. Existing tenancy agreements will ‘convert’ to the relevant occupation contract on the day of implementation, and landlords have a maximum of six months to issue a written statement of the converted occupation contract to their contract-holders. The written statement can be issued in hardcopy or, if the contract-holder agrees, electronically. 

Where the contract-holder has breached the occupation contract the minimum notice period that must be given is one month. This notice period can be shorter where it relates to a breach of the anti-social behaviour or the serious rent arrears terms. Where a ‘no fault’ notice is issued, the minimum notice period that must be given is six months. A landlord will not be able to give such a notice until six months after the contract starts. A landlord will not be able to give such a notice unless they have complied with certain obligations, including registration and licensing with Rent Smart Wales and deposit protection rules. Landlord break clauses will only be able to be incorporated into a fixed term occupation contract if the contract has a fixed term of two years or more. A landlord will not be able to exercise a break clause within the first eighteen months of occupation.

Landlords must ensure properties are fit for human habitation (FFHH). This will include, for instance, electrical safety testing and ensuring working smoke alarms and carbon monoxide detectors are fitted. In addition, rent will not be payable for any period during which the dwelling is not fit for human habitation. Landlords must keep 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. If a landlord issued a ‘no fault’ possession notice in response to a request for repair (commonly known as retaliatory eviction), the court can refuse to make a possession order and it will not be possible to issue a further ‘no fault’ notice until six months later.

A joint contract-holder will be able to leave a contract without ending the contract entirely. New joint contract-holders can be added without having to end the current contract and start another one.

Enhanced succession rights will enable both a ‘priority’ and ‘reserve’ successor to succeed to the occupation contract. This allows two successions to the contract to take place, for example a spouse followed by another family member. In addition, a new succession right for carers is created.

Landlords are able to repossess an abandoned property without needing a court order, after serving a four week warning notice and carrying out investigations to satisfy themselves that the property is abandoned.

Valleys to Coasts Housing Association Offices in Bridgend

If a landlord provides supported accommodation (sometimes referred to as ‘supported living’) they will not have to issue an occupation contract for the first six months of occupancy. To be classified as supported accommodation, support services in the form of advice, training, guidance or counselling must be provided. Support services include:

• Support in controlling or overcoming addiction
• Support in finding employment or alternative accommodation
• Supporting someone who finds it difficult to live independently because of age, illness, disability or any other reason.

After six months, the person(s) will become entitled to a ‘supported standard contract’. The supported standard contract will operate in a similar way to the standard contract. However the landlord may include terms in the contract relating to the ability:

• To relocate the contract-holder within the building; and
• For the landlord to temporarily exclude the contract-holder from the dwelling for up to 48 hours, a maximum of three times in six months

If you are interested in the financing of social housing in Wales, you would be interested in my webinar ‘Introduction to Welsh Housing Association Finance’. For further information or to make a booking, please click here.