There have been many changes to the Regulations around the private rental sector over the last few years, but none as far reaching as the new regulations which are due to come into effect in Wales on the 1st December 2022 with the introduction of the Renting Homes (Wales) Act 2016. Here we will take a more in depth look at the changes that are being introduced.
New Terminology
Some of the biggest changes being introduced centre around changes to terminology:
Tenants and licensees will be called contract holders
Tenancy agreements will become occupation contracts, the most common being called a standard occupation contract (or secure occupation contract for social rented sector)
Properties will be referred to as dwellings
Main Legal Changes
Contracts
An “occupation contract” must contain a written statement of the key facts of the tenancy which are covered under the following terms:
- 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.
This written statement of the key facts must be given to the contract holder within 14 days of the start of the occupation contract. Any existing tenancy agreements must be converted to the new occupation contract within 6 months of the new contracts being introduced. The Welsh Government provide advice on how to do this on their website.
Joint Contracts
A joint contract holder will be able to leave the contract without ending the contract entirely and new joint contract holders can also be added without ending the contract and starting a new one
Fit For Human Habitation
Under the new Act, a landlord must ensure that the dwelling being occupied is fit for human habitation, under the Renting Homes (fitness for Human Habitation) (Wales) Act 2022, which includes electrical safety testing and the installation of hardwired and interlinked smoke alarms and carbon monoxide detectors, where required in rooms which have solid fuel combustion appliances. Carbon monoxide detectors are required in all dwellings from the 1st December 2022. For new contracts hardwired smoke alarms and electrical condition reports will also be required from the 15th July 2022. For existing tenancies, these will be required by the 15th July 2023.
Ending the Occupation Contract
For fault evictions, where the contract holder has breached the terms of the contract, the landlord must give one month’s notice, unless the breach is for serious rent arrears or serious anti-social behaviour.
For non-fault evictions, the landlord cannot apply for repossession until 6 months after the start of the contract and then must give 6 months’ notice. This means that the effective minimum term of any contract is 12 months. A landlord will not be able to serve notice unless they have registered with Rent Smart Wales and have complied with the relevant deposit protection rules. If a landlord issues a “no fault” possession notice in response to a request for repair, the court can refuse to grant the possession order and no further no fault notices can be issues until at least 6 months later.
A landlord can only use break clauses in a fixed term contract if that contract is for 2 years or more and, even then, the clause cannot be invoked for the first 18 months
Rights of Succession
The new Act allows for contract succession to priority or reserve successors on the death of the sole contract holder. In this instance a spouse or partner has the right to take over the contract as a priority successor if they lived in the property as their sole residence at the time of the contract holder’s passing. A family member or a carer is classed as a reserve successor if they lived in the property in the 12 months leading up to the contract holder’s passing and meet either the family member or carer criteria. The priority successor takes precedence and upon their passing, the reserve successor takes over the contract. The right of succession comes to an end once the reserve successor passes or leaves the property.
Abandonment
If a landlord believes that the property has been abandoned, they can regain possession after 4 weeks without a court order as long as they have given a warning notice and carried out all reasonable investigations to ensure that the dwelling has been abandoned. A contract holder does have recourse, however and they have 6 months from the time the initial notice was given by the landlord to apply to the courts to overturn the notice if they can prove that the landlord either did not serve notice or failed to make the right enquiries; that the dwelling was not abandoned and that there was a good reason why they did not reply to the landlord or that the landlord did not have reasonable grounds to believe that the dwelling had been abandoned.
The new Act will introduce significant changes to the way properties are rented in Wales and compliance with the new laws is not optional. Any landlord renting a property in Wales should make sure that they fully understand the new rules and ensure that they are ready to comply with them when they are fully implemented on the 1st December 2022.
