What’s been the impact of the changes under the Renting Homes (Wales) Act?
Tue 13 Jun 2023
On 1st December last year, lettings legislation in Wales underwent a huge change when the Renting Homes (Wales) Act came into force.
What were the main Renting Homes (Wales) Act changes?
· New standard ‘occupation contract’ for the Private Rental Sector. The Assured Shorthold Tenancy (AST) has been replaced by an ‘occupation contract’ and ‘tenants’ have become ‘contract-holders’. All existing tenancies converted to this new occupation contract on the day the law came into force. Landlords must issue a written statement of the occupation contract to new contract holders within 14 days of occupation – and for those tenancies that converted on 1st December 2022, landlords had a six-month window to issue a written statement of the ‘converted contract’.
· Landlords must give a minimum of six months’ notice to end the tenancy if there hasn’t been a breach. They also can’t give notice within the first six months. Contract holders can give four weeks’ notice after any fixed term has expired.
· Fitness for habitation rules are now effectively the same as in England. Landlords must keep homes safe and in a good state of repair and the new rules include mandatory five-yearly electrical tests and fitting working smoke alarms and carbon monoxide detectors. Tenants are protected against ‘retaliatory evictions’ so, as in England, if a no-fault possession notice is issued in response to a tenant’s request for repairs, the court can refuse to make a possession order and the tenant can’t be evicted under a no fault notice for six months.
Details of all the changes can be found on the Welsh Government website.
What have been the key issues with the Renting Homes (Wales) Act so far?
As with any major change to legislation there are often teething troubles at the start. There was a legal problem with the deadline for issuing written statements for converted contracts, as the initial six-month end date of 31st May 2023 technically stood as the legal deadline for any subsequent renewals of converted contracts! However, this has now been fixed so that, as with new occupation contracts, landlords have 14 days to provide a written statement for renewals of converted contracts.
Another problem was the Government’s failure to provide the correct paperwork for gaining possession in time for the changes. The accelerated possession order application form had not been updated since 2017 and the Possession Claim Online service, which should be available when serving notice for rent arrears, was not available. Both these issues now appear to have been resolved.
But a particularly noticeable shift has been the huge jump in the number of possession claims between Q1 2022 and Q1 2023 - up by 235% in Wales, versus just 16% in England. The Ministry of Justice has suggested this is likely due to Welsh landlords exiting the market because of the Renting Homes Act – but are the changes really cause for selling up?
Most landlords should be experiencing relatively little change
The ‘heavy lifting’ for the majority of private landlords, who already maintained their properties in good condition and went over and above the legal health and safety requirements, was switching tenancies over to converted contracts – and that’s now out of the way.
As regards to the extended notice period for ‘no fault’ evictions, the reality is that the vast majority of landlords wouldn’t evict a contract holder unless they had breached their contract. And while the new eviction rules protect contract holders who haven’t done anything wrong, they also support landlords where there has been a breach, requiring just one month’s notice in most cases, reducing to 14 days for serious rent arrears. For anti-social behaviour, landlords may even be able to issue a notice and commence court proceedings on the same day.
To make sure you’re fully compliant with the new regulations, it’s advisable to work with a professional managing agent, such as Moginie James. Our teams are trained and supported via ARLA Propertymark and can ensure that your property is always legally let. So, if you have any questions about the new rules or would like to talk to us about our service, just get in touch - you can find contact details for all our branches on our website.