Renting Homes (Wales) Act 2016 - An overhaul of landlord and tenant law in Wales

The Renting Homes (Wales) Act 2016 fundamentally changes housing law in Wales and was bought into force on 1st December 2022. The legislation changes how landlords in Wales will have to operate and is intended to simplify how properties are rented. The Act changes the game for almost all landlord and tenant law and took 7 years to come into force, but as of December, it is finally here.

Landlords

There are two types of landlords recognised under the Act: (1) community landlords and (2) private landlords. Those that are community landlords will primarily be made up of local authorities and registered social landlords. All other landlords will fit into the private landlord category.

Occupation Contracts

Under the Act, tenants and licensees are called 'contract-holders' and going forward they will have an 'occupation contract' replacing tenancy and licence agreements. The two forms of an occupation contract are (1) a secure contract and (2) a standard contract. If you are a community landlord, then you should use a secure contract and for the private rented sector they should use the default standard contract. There are four types of terms that can be incorporated into these occupation contracts, as follows:

1. Key matters: Including the names of the parties, address of the property, the date of occupation, the amount of rent and when it is payable. These terms must be inserted into every contract.

2. Fundamental Terms: Covering the basic operation of the contract, including possession procedures and the landlord's obligations regarding repair. Some fundamental terms cannot be amended or left out. Others can be excluded or amended by agreement, provided it benefits the contract-holder.

3. Supplementary Terms: Dealing 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. These terms can be excluded or amended by agreement.

4. Additional Terms: Addressing 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.

The main benefit of occupation contracts is that it will be easier for parties to the contract to know their rights and responsibilities. They should only need to look to their contract and not attempt to steer their way through convoluted housing statutes and case law.

The Written Statement

All landlords must issue a 'written statement' of their occupation contact to all contact-holders, replacing their current written tenancy or licence agreement. For new rentals after 1st December 2022, the written statement must be issued within 14 days of occupation under the contract. Existing tenancies will automatically convert to the relevant occupation contract on 1st December 2022, but the landlord must issue a written statement within the 6 months thereafter. This gives rise the risk of litigation as compensation may be payable for failure to provide the written statement.

Terminating Occupation Contracts

When there has been a breach of occupation contract, or the landlord seeks possession under an estate management ground, there must be a minimum of one month notice period given. However, if the contract-holder's breach relates to anti-social behaviour, or serious rent arrears under some standard contracts, then the notice period may be shorter.

The court will only make a possession order based on breach of contract if it considers it reasonable to do so. If the landlord has relied on estate management grounds, there is additional requirement for the landlord to have made suitable alternative accommodation available to the contract-holder.

Other Notable Changes

• Joint Contracts- a joint contract-holder can leave a contract without ending the contract for everyone. Further, a new joint contract-holder can be added to an existing contract, without the need to end it and start a new one. This makes it easier to add and remove occupiers.

• Abandonment- a landlord can repossess an abandoned property without a court order.

• Enhanced Succession Rights - survivorship is not within the succession rules and two successions to the contract can take place.

• Supported Accommodation - if you provide supported accommodation, you do not need to issue an occupation contract for the first six months of occupancy.

• Fitness for Human Habitation - a term on fitness is a fundamental term of all occupation contracts and, where the contract expressly says so, rent can be withheld during periods when the property is not fit.

This is only a snapshot of the new legislative framework for landlord and tenant law in Wales. Landlords will need to quickly adapt to this new world of Welsh housing and although it has been in the making for more than 7 years, we wonder whether you are ready?

If you have any need for assistance in navigating the provisions of the Act, please do not hesitate to contact our Housing & Regeneration Litigation Team.