Legal changes you should know about
Thu 14 Jan 2021
From the proposed amendments to the Renting Homes (Wales) Act 2016 to the impact that Brexit will have on the PRS, we cover the hot topics and what we’re expecting to see across the year. If we manage your property for you, then this is just for your information, but if you manage your own, you may need to take action.
Eviction rules. In Wales, legislation came into force on 11th January that would suspend evictions from social and private rented accommodation up until the 31 March.
The Welsh government had already agreed to suspend evictions between 11 December and 11 January. The new measures will protect people from being evicted from their homes during that period apart from in cases of anti-social behaviour or domestic violence.
- Under the current temporary legislation, in Wales, you will now have to give a tenant 6 months’ notice to leave if you’re serving a Section 21, although less notice is required for a Section 8. Since September the eviction ban has allowed evictions to go ahead in exceptional circumstances, such as when tenants are behaving anti-socially or were sitting on extreme levels of rent arrears. These arrears were previously defined as equivalent to nine month’s rent, but debt accrued since the first lockdown in March was not allowed to be included. On 8th January legislation changed to reduce this so that arrears were equivalent to six month’s rent and most crucially, now include debt accrued during the pandemic.
Renting Homes Wales (Act) 2016. The purpose of the Renting Homes (Wales) Act 2016 is to replace various complex pieces of legislation with one clear framework. This will in turn offer transparency to tenants and simplify the letting process. The types of tenancies people have, i.e. secure tenancies, demoted tenancies, introductory tenancies, assured shorthold tenancies will be re-named ‘Occupation Contracts’ and there will be two types. Secure contracts which are modelled on current secure tenancies in social housing and standard contracts which are modelled on assured shorthold tenancies, mainly used in the private rental sector.
The changes to the Act with the introduction of the Bill
The changes will increase security of occupation for those on standard contracts, so mainly those tenants who are living in properties in the Private Rental Sector. It will affect social housing tenants who are on a starter tenancy, demoted tenancy or are in supported housing.
The Bill proposes that:
- The minimum notice period for tenants to vacate their property under a section 173 notice (allows a landlord to seek possession without a breach of contract such as rent arrears or Anti-Social Behaviour) goes from 2 months to 6 months.
- The 2016 Act proposed that you were not able to issue a section 173 notice until a tenant had been living in the property for at least four months. This Bill proposes that this be extended to 6 months. This would give a new tenant at least 12 months of living in their home.
- There are exemptions to the 6-month minimum notice period. In the cases of prohibited conduct (ASB), a secure contract can be demoted to a prohibited standard contract which can be terminated on 2 months’ notice.
- Currently, a notice can be issued within a fixed term to end the contract at the end of that term. A fixed term standard contract will now automatically fall into a periodic standard contract and a landlord would have to issue a section 173 to end the contract
- The new approach to joint contracts will enable contract holders to be added or removed without the need to end the contract for all as is currently the case. This new approach will help avoid the risk of homelessness and will also help victims of domestic abuse, by enabling the perpetrator to be targeted for eviction.
These rights will be enhanced, enabling both a priority and a reserve successor to succeed to the occupation contract. This will potentially enable two successions to the contract to take place, for example a spouse followed by a child. In addition, a new succession right for carers will be created which will provide extra security for the 370,000 plus unpaid carers in Wales.
Fitness for Human Habitation
Landlords must ensure that any dwelling is fit for human habitation – FFHH -, and this will include, functioning smoke alarms, carbon monoxide detectors and the current gas safety checks, as well as mandatory electric safety checks. The mandatory electrical check is due to be introduced in the spring of 2022. Currently in England, as of 1st April 2021, all Private Rental Sector properties will be subject to a full inspection of the electrical installations every five years. If you currently manage your own property we would suggest that you book an electrical check as soon as possible, as there will undoubtedly be a huge demand next year and good electricians are likely to have an extensive waiting list.
The Act protects a contract holder from the practice of retaliatory eviction which is when a landlord responds to a request for a repair by issuing an eviction notice. A landlord will no longer be automatically entitled to possession where the Court is satisfied that the possession notice was served in response to a tenants request in respect of disrepair or FFHH.
A proposed new abandonment procedure will mean that landlords will be able to take back possession of their property without the need for a court order, after serving a 4 week notice to satisfy themselves that the property is abandoned.
Tenancy Saver LoanThe Tenancy Saver Loan was launched last year across Wales for the Private Rented Sector. With the current pandemic still impacting jobs across the country, the loan has been set up to provide an affordable way for tenants who are struggling financially, due to the public health emergency, to cover rent arrears (or future months’ rent).
With just 1% APR interest and the option to repay the loan over a period of up to five years, this should prove to be affordable for all tenants. The loan would be paid directly to the Landlord or Agent. You can find all the FAQs you will need here.