The Renting Homes Act In Wales
Around one third of the population of Wales currently live in rented accommodation. The recently implemented Renting Homes (fees etc.) (Wales) Act 2019 and the Renting Homes (Wales) Act 2016 demonstrate that housing is a key priority for the Welsh Ministers. The aim of both acts is to provide a clear legal framework applying to all rented housing in Wales.
ALL TENANCIES TO BECOME STANDARD OCCUPATION CONTRACTS
When the Renting Homes (Wales) Act 2016 (“the Act”) comes into force, assured shorthold tenancies will be replaced by standard occupation contracts. It is envisaged that this will take the form of a written statement setting out the rights and responsibilities of both parties. The aim is to simplify and clarify contractual arrangements. In addition, there will also be new secure contracts modelled on the current secure tenancies issued by local authorities. The Welsh Government has stated that they will be providing model forms of both occupation contracts to assist landlords when the Act comes into force. They will apply to new tenancies from the first day that the Act comes into force and also to existing tenancy agreements, which will be converted into occupation contracts under the Act.
NOTICE TO EVICT A TENANT
A landlord can evict a tenant during an assured shorthold tenancy by sending the tenant a Section 21 Notice under the Housing Act 1988. Under the current law, a landlord must always give their tenant at least 2 months notice to leave the property, provided that the tenant has been in occupation for at least 4 months when the notice is given to them. Therefore, the shortest time that a tenant can be in occupation of a property under a current assured shorthold tenancy is 6 months.
Sections 173 and 186 of the Act will act in the same way as Section 21 of the Housing Act 1988, but will change the amount of notice that a Landlord must give to a tenant in Wales. The notice period will increase to be at least 6 months rather than the current 2 month period when the Act comes into force. A notice will still only be capable of being sent after the tenant has been in occupation of the property for at least 4 months, thus increasing the shortest time that a tenant can be in occupation of a property to 10 months.
LANDLORD AND LETTING AGENT FEES
In its consultation stages the Renting Homes (Fees etc.) (Wales) Bill published in January 2019 stated, “Unregulated fees being charged to tenants by letting agents and others have been highlighted as the main barrier to many people accessing the market and good quality rented housing.”
The most significant change under the Renting Homes (fees etc.) (Wales) Act 2019 (“the 2019 Act”), is that landlords and letting agents will not be able to charge fees to set up or renew a standard occupation contract except those payments permitted by the 2019 Act e.g. for rent, security and holding deposits etc.
The 2019 Act will make it an offence to require any payment of fees as part of granting, renewing or continuing a standard occupation contract. Holding deposits will also be restricted to one week’s rent, with provisions that will require prompt repayment.
The 2019 Act received Royal Assent on the 15th May 2019 and came into force on 1 September 2019.
The implementation of the Renting Homes (Wales) Act 2016 has been repeatedly delayed and it is still uncertain as to when the Act will come into force. It is predicted that the earliest the Act would be likely to come into force will be at the start of 2020.
Whilst the dates may be uncertain, one thing is clear, landlords in the private sector across Wales will need to prepare for a significant change to their obligations and practices in the near future.
If you require advice or further information on the above, please do not hesitate to contact our Real Estate Team.