The Renting Homes (Wales) Act 2016 (henceforth referred to as the “Act”), comes into force on 1st December 2022, so we have prepared a short guide containing the information you need to know below.
All landlords will have to provide their tenants/contract-holders with written statements setting out the terms of the tenancy/occupation-contract and including those new points required by the Act. This needs to be served by 31st May 2023.
Howells Can Assist You in Drafting this Document
If you have decided that you no longer wish to be a landlord and your tenant is not in breach of the tenancy terms, you will need to act urgently if you wish to evict them. A Section 21 notice, which must be served to bring a tenancy to an end where the tenant is not at fault, cannot be served after 30th November 2022. In addition, if you are minded to serve a Section 21 notice you will need to ensure that you comply with the obligations necessary to allow such a notice to be served.
We at Howells can help you draft the Section 21 notice and advise you as to the requirements necessary to ensure that it is effective.
Howells' Guide to Changes to the Way Landlords and Agents Rent Property in Wales
The Renting Homes (Wales) Act 2016 (“the Act”) comes into force on December 1st 2022, and brings with it many changes with which all landlords in Wales need to be familiar. In this document we set out some of the changes that will affect you and, where applicable, where you can find additional assistance.
This fact sheet relates to assured shorthold tenancies only, as these are the type of tenancy used in the vast majority of private lettings. Please note that the Act only applies to Wales, the rules in England remain unaffected.
Tenancy Agreements / Occupation Contracts
Current Law
When granting an assured shorthold tenancy, a landlord needs to ensure that the following are in place:
- The landlord must be registered with Rent Smart Wales.
- If self-managing the landlord will need to be licensed with Rent Smart Wales.
- If using a managing agent will need to ensure the agent is licensed with Rent Smart Wales.
- The Landlord will need to obtain an Energy Performance Certificate and provide a copy to the tenant. This needs to be updated every 10 years.
- If the property contains gas appliances, a gas safety certificate needs to be obtained and a copy also needs to be provided to the tenant. This needs to be updated every year.
- If any deposit is taken it must be held in a recognised tenancy deposit scheme and the appropriate notice confirming this must be provided to the tenant.
New Law
All of the requirements necessary for an assured shorthold tenancy and listed above continue to apply. In addition, if there are electrical appliances these should be tested with documentary confirmation provided to the tenant. This should be renewed every five years unless the requirements of the previous Electrical Installation Condition Report indicate a shorter inspecting and testing interval.
Changes
- An assured shorthold tenancy is now referred to as a standard occupation contract
- A tenant is now referred to as a contract-holder (and we will refer to tenants as contract holder’s for the remainder of this document)
- Occupation contracts must be in writing. A written statement setting out the terms of the occupation contract must be provided to the contract-holder within 14 days of the start of the occupation contract.
- If an assured shorthold tenancy has been granted before 1st December 2022 a written statement of its terms still needs to be provided to the contract holder by 31st May 2023. A pro-former of the written statement that should be provided in these circumstances is available on the Welsh Government website https://business.senedd.wales/mgIssueHistoryHome.aspx?IId=38600.
Failure to provide a written contact leaves the landlord vulnerable for a claim of compensation by the contract-holder. The amount of compensation payable will be a minimum of two months’ rent and thereafter an equivalent of one month’s rent for every month no written contract is provided.
Note that written statements can be in hard or electronic copy.
Obligations on the Landlord when the Occupation Contract Continues
The property must be fit for human habitation. This will include electrical safety testing and the provision of working fire and carbon monoxide alarms. These are in addition to the existing requirements on a landlord to ensure that the property has adequate heating hot water and avoidance of damp, etc.
Ending a Tenancy
A Section 21 notice (‘no fault’ eviction notice) will now be referred to as a Section 173 notice. The notice period will have to be at least six months (as has been the case since the coronavirus pandemic started) as opposed to the previous two months. The notice cannot be given within the first six months of the occupation contract. This means that unless the contract-holder is in breach of the terms of their tenancy they cannot be removed for a year.
If the landlord fails to act on a Section 173 notice, they cannot issue another one for six months.
Additional Matters
The Act also includes sundry new rules with which landlords and occupation contract-holders should be familiar.
1. Protection from Retaliatory Eviction
If an occupation contract-holder claims at court that a Section 173 notice has been served because the contract-holder has complained about the poor state of repair of the property, the landlord will be required to satisfy the court that this is not the case if a possession order is made.
2. Break Clauses
If a tenancy is granted for a period of two years or more, a landlord can insist upon a break clause being included within it, however notice cannot be given under such a break clause until 18 months of the fixed term contract has passed and only then on the basis that six months’ notice is given.
3. Joint Contracts
If there is more than one occupation contract-holder, one of them can be removed without a new occupation contract being granted. Similarly, a new occupation contract holder can be added. This is to make it easier for abusive partners to be removed from properties.
4. Enhanced Succession Rights
Two people can now succeed to an occupation contract. For example, whereas a wife could already succeed to her husband’s contract should he die, the Act ensures that, whilst this remains the case, should the wife subsequently die as well, she can be followed by another family member such as a child. The right to succeed has also been extended to carers.
5. Abandonment
Landlords will be able to repossess an abandoned property without needing to request a court order. This is provided a four week warning notice is served and the landlord undertakes investigation to satisfy themselves that the landlord is abandoned.
Matters Landlords Should Consider Prior to 1st December 2022.
- Make sure you have prepared a written statement before 31st May 2023. The manner in which the Act has been drafted suggests it is probably safer to delay providing this statement until the Act has come into force on 1st December 2022
- Ensure that all the requisite requirements for granting a tenancy set out in the first two paragraphs of this fact sheet have been complied with and are up to date.
- Ensure that you are registered with Rent Smart Wales and are licensed as well, if applicable.
Points to Consider as a Tenant/Occupation Contract-holder
If you believe that your landlord may seek to evict you because of complaints you have raised regarding your home’s state of repair, ensure that your complaints are made in writing, and you have retained these so you can refer to these in any future court proceedings.
Other Types of Eviction proceedings
This fact sheet refers to no fault evictions only. Although the Act does provide more protection to contract-holders, it should be noted that this protection only applies if contract-holders adhere to the terms of their occupation contracts.
The rights of the landlord to take eviction proceedings against contract-holders for non-payment of rent and other breaches of occupation contracts remain unaltered and the Act is therefore not a charter to enable contract-holders to act as they wish. Be that as it may, when considering letting a property, landlords should bear in mind that contract-holders have the right to remain there for a year and that short term lets may no longer be advisable.
The Act also widens the difference in landlord and tenant law between England and Wales. If you wish to instruct a solicitor or managing agent in connection with Welsh properties it is consequently advisable that you ensure that are either based in Wales or have sufficient knowledge of the Welsh regulations.
Find Help with Howells
At Howells, we can help you understand this new law as well as any others. Furthermore, our experts in landlord and tenant law are up to date on all the latest news, and can provide the legal help you need within the industry.
