In a rather quiet way the Welsh Government has now legislated to do away with 35 years of convoluted tenancy labels, procedures and terms by passing the Renting Homes (Wales) Act 2016 (“RHWA”). The Act is an admirable attempt to codify in simple language hitherto various aspects of landlord and tenant law. There is now statutory resolution to many complex issues which have generated much litigation for decades such as whether acceptance of rent from a trespasser implies a tenancy or licence. The RHWA received Royal Assent on 16 January 2016 but it is not yet in force. When the provisions come into force in Wales with very few exceptions there will henceforth be effectively only two types of residential tenancy available in the rental sector. The distinction between a residential tenancy and a “licence” will be a matter of semantics. This simpler approach was recommended by a Law Commission some 15 years ago but was not acted upon. The new Act dovetails very nicely with Part 1 of the Housing (Wales) Act 2014 which requires private landlords and their properties to be registered. This is a very welcome change affecting a million or so renters in Wales.
I highlight the new legislation:
Renting Homes (Wales) Act 2016
- Passed on 18 January 2016 but not yet in force.
- New concept of “occupation contract”. Tenants are “contract-holders”.
- There will be only two types of “occupation contract”
-Secure Contract – like the old secure tenancies
-Standard Contract – akin to the Assured Shorthold Tenancy in the private sector.
- Most existing current tenancies will fall into one of the “occupation contracts”.
- All landlords and properties now to be registered with few exemptions (see Housing (Wales) Act 2014.
- Landlord must issue written contracts which must have fundamental terms, supplementary terms, key matters and additional terms. Free model written contracts will be available. Contract-holder can be compensated for landlord failure to give written terms.
- Six month minimum term.
- Possession Claims to be issued within 6 months of notice.
- New term/duty that properties to be fit for human habitation in addition to the familiar “section 11” repair duties.
- No automatic termination of joint occupation contract (joint tenancy) by one contract-holder (tenant) serving notice to quit – The rule in Hammersmith v Monk is abolished.
- Landlord can exclude one joint contract-holder alone leaving occupation contract still intact.
- Succession rights for “carers”.
- Landlords can repossess “abandoned” properties on notice but with no court process.
- Trespassers become contract-holders with landlords if there is knowing or deemed acceptance of rent for a period of two months without taking action to evict.
Housing and Planning Bill
At the time of writing this controversial Bill described by the press as a “drunken festival of deregulation” is making its ways through to the Committee Stage of the House of Lords. The clauses of key import include the following:
- Local authorities are to promote the supply of “starter homes” which is a new dwelling which is only available for purchase by qualifying first-time buyers and which is made available at price which is at least 20% less than the market value
- The maximum price that a starter home may be sold to a first-time buyer: the price cap is £250,000 outside Greater London and £450,000 in Greater London.
- Provisions for the banning of rogue landlords and letting agents with a duty for local authorities to maintain a database of “rogues”.
- Local authority duties in relation to Rent repayment Orders.
- Duty on local authority to consider selling vacant high value local authority dwellings.
- Duty on registered social landlords to charge higher rents to high income social tenants.
- The need for local authorities to assess and review accommodation needs under Housing Act 2004 in their local area is now broadened to “all people residing or resorting to their district”.
- Further provision for the fitness to hold an HMO licence is made as is the power to fine such persons as an alternative to prosecution.
Samuel Waritay is a door tenant of Magdalen Chambers and is a landlord and tenant specialist. He is the author of the Housing section of Local Government Precedents and Procedures (Sweet & Maxwell).