The Renting Homes (Wales) Act 2016: What Landlords Need to Know
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by Robert Jones, Founder of Property Investments UK
With two decades in UK property, Rob has been investing in buy-to-let since 2005, and uses property data to develop tools for property market analysis.
The new Renting Homes (Wales) Act is now in force. Here’s what the new Act is about and what landlords with properties in Wales need to know about the new rules.
Quick Links
- What is The Renting Homes (Wales) Act 2016?
- New Types of Landlord
- New Types of Tenancy
- New Terms in Occupation Contracts
- Rules Around Ending Contracts and Evictions Have Changed
- The Landlord’s Responsibility for Repairs is Made Clearer
- Joint Contract Holders May be Added or Removed
- Contract Holders Gain Enhanced Succession Rights
- New Right to Repossess Abandoned Property
- Inventories are Required
- New Rules on Rent Increases (Rent Variations)
- Sub-Letting Allowed if Permitted by the Contract
- New Laws on Smoke Alarms
- New Laws on Carbon Monoxide Alarms
- New Laws on Electrical Safety
- What Landlords Must Do Now
- Model Occupation Contracts
- No Changes to Rent Smart Wales
- No Changes to Tenancy Deposit Schemes
What is The Renting Homes (Wales) Act 2016?
Although it was passed as a law over six years ago The Renting Homes (Wales) Act 2016 came into force in December 2022. The Act makes major changes to the law on letting property in Wales. Prior to the Act tenancy law in Wales was similar to that in England but this is no longer the case.
The Renting Homes (Wales) Act 2016 is intended to simplify tenancy law in Wales and offer greater security to tenants. It brings several different pieces of landlord law under one new framework.
The key points of The Renting Homes (Wales ) Act 2016 are that it introduces new categories of landlords, new types of tenancy agreements, new rules on letting property and places new responsibilities on landlords.
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New Types of Landlord
There are two new types of landlords under the Act.
- Community landlords, which are mainly local authorities and housing associations.
- Private landlords, which are all other landlords.
New Types of Tenancy
Tenancies and licences in Wales are now known as occupation contracts and tenants and licence holders are now known as contract-holders.
There are now two types of occupation contracts:
- Secure contracts are for use by community landlords. These replace the secure tenancies previously used.
- Standard contracts are for use by the private rented sector. These replace the assured shorthold tenancies or ASTs previously used.
Under the new law, a fixed-term standard contract can be agreed upon for any length of time. However, should a contract-holder remain in occupation at the end of a fixed term, the contract automatically becomes a periodic standard contract.
New Terms in Occupation Contracts
The Renting Homes (Wales) Act 2016 has introduced four different categories of terms that should or may be included in occupation contracts:
- Key matters: These are the names of the parties and the address of the property. These must be included in every contract.
- Fundamental terms: These cover the most important aspects of the contract, such as possession procedures and the landlord’s obligations regarding repairs. Some of these can be omitted if it benefits the contract holder.
- Supplementary terms: These deal with 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 do not have to be included in the contract.
- Additional terms: Any other specifically agreed matters. For example, allowing pets. These terms must be fair according to the Consumer Rights Act 2015. These are optional.
Rules Around Ending Contracts and Evictions Have Changed
A landlord must give a contract-holder one month’s notice if they want to evict them because they breach the contract. This can be less in the case of serious rent arrears or anti-social behaviour. If the contract-holder is two months or more in arrears only 14 days notice need be given.
If the landlord wishes to evict a contract-holder on a ‘no fault’ basis six month’s notice must be given. This cannot be given until the contract has run for at least six months however.
The Section 173 Landlord’s Notice replaces the previous Section 21 Notice for no fault evictions – but they are not exactly the same.
Break clauses can only be used with contracts of two years or more.
A landlord will not be able to use the no fault eviction method if they have not complied with certain obligations, including registration and licensing with Rent Smart Wales and the deposit protection rules.
Contract-holders are required to give landlords at least four week’s notice if they want to leave (except if the contract is of a fixed term contract).
The Landlord’s Responsibility for Repairs is Made Clearer
Landlords must ensure that their property is fit for human habitation or FFHH as it is known in accordance with these standards: Fitness of homes for human habitation: guidance for landlords.
These standards cover areas such as upkeep of the structure of the property, keeping utilities and amenities in good order, electrical safety testing and ensuring working smoke alarms and carbon monoxide detectors are fitted.
Rent is not payable for any period during which a property is not fit for human habitation.
Landlords are prohibited from carrying out so-called revenge evictions because contract holders request repairs.
Joint Contract Holders May be Added or Removed
New joint contract holders can be added and existing ones can leave without having to start a new contract.
Contract Holders Gain Enhanced Succession Rights
These rights enable both a priority and a reserve successor to take over the occupation contract if necessary. It allows two successions to the contract, such as a spouse and another family member. Also, a new succession right for carers has been created.
New Right to Repossess Abandoned Property
A landlord may repossess an abandoned property after four weeks without the need to obtain a court order.
Inventories are Required
The new Renting Homes legislation includes a supplementary provision requiring an inventory to be provided.
New Rules on Rent Increases (Rent Variations)
A landlord is required to give two months’ notice of a rent increase (known as a rent variation). Rent variations may be issued annually.
Sub-Letting Allowed if Permitted by the Contract
Contract-holders may only sub-let their property if it is permitted in the contract.
New Laws on Smoke Alarms
The law on smoke alarms has changed with the new Act. It specifies the type and location of smoke alarms that must be provided, and that they must be in proper working order. Landlords must comply with the new rules by 1 December 2023 for existing contracts and for new contracts now.
The new requirements are set out in the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022.
New Laws on Carbon Monoxide Alarms
The law on carbon monoxide alarms has changed. It specifies the type and location of alarms that must be provided, and that they must be in proper working order. Landlords must comply with the new rules now.
The new requirements are set out in the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022.
New Laws on Electrical Safety
The law on electrical safety has changed. It specifies that electrical condition reports must be obtained and provided to the contract holder and renewed at least every five years. Landlords have until 1 December 2023 to comply with the new rules for existing contracts and for new contracts now.
The new requirements are set out in the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022.
What Landlords Must Do Now
As a result of The Renting Homes (Wales) Act 2016 all existing tenancies in Wales converted automatically to the relevant new occupation contracts on 1 December 2022. If an existing tenancy was a fixed-term assured shorthold tenancy it became a fixed-term standard occupation contract. If it was a periodic assured shorthold tenancy it became a periodic standard occupation contract.
Landlords have six months from 1 December to issue a written statement outlining the new occupation contract to their existing tenants, now known as contract-holders.
New tenancies from the above date are occupation contracts from inception. Landlords must issue a written statement within 14 days.
Community landlords providing supported accommodation (supported living) do not have to issue an occupation contract for the first six months of occupation.
Written statements can be issued on paper or electronically. There is no legal requirement for contract holders to sign their occupation contracts for them to be valid.
Model Occupation Contracts
The Welsh Government has issued some model contracts, sample written statements and guidance on how to convert existing tenancies into occupation contracts. Landlords can make use of these if they wish, although it is not mandatory.
These can be found at: Renting Homes: housing law is changing | GOV.WALES
No Changes to Rent Smart Wales
There are no changes to the Rent Smart Wales requirements, where landlords and rental properties in Wales must be registered and have a licence. There will be an additional training module for new and re-registering landlords covering the new rules, however.
No Changes to Tenancy Deposit Schemes
There are no changes to the requirement to use a tenancy deposit scheme, nor how these schemes operate.