Renting Homes (Wales) Act 2016

18th February 2022

The Renting Homes (Wales) Act 2016 will be coming into effect from the 15th July 2022. The anticipated change on tenancy legislation in Wales sees major changes to the property lettings industry for landlords, tenants and managing agents.

The key changes are:

• All Assured Shorthold Tenancies (ASTs) within the Private Rented Sector (PRS) are to be replaced by ‘Occupation contracts’ which will standardise tenancy agreements across the board.
• Tenancies in Wales will now hold their own set of laws and will need to be dealt with differently to tenancies in England.
• Landlords will have increased responsibility to ensure their properties are fit for human habitation.
• Eviction Notices and grounds for eviction will be changing from Section 21 to several different types of notices depending on the tenancy type.

Douglas Haig, Managing Director for The Seraph Group and Non-executive Director for the NRLA who represents over 90,000 landlords in the industry initially comments on the new bill

This bill has been a long time in the making and has already had a number of amendments made before it even came into place.  It can’t be underestimated how much this will change the operational landscape for renting properties in Wales and we strongly advise landlords and agents to take the time to understand how these changes relate to them.”

Occupation Contracts

Under the new Renting Homes (Wales) Act 2016, all ASTs within the Private Rented Sector (PRS) are to be replaced with occupation contracts. Occupation contracts will come into effect on the 15th of July. Any new contracts signed before the 15th of July will be automatically converted to Occupation Contracts with ASTs no longer existing in Wales. Landlords will have a maximum of six months to issue a written statement of the converted occupation contract to their contract-holders.

These new occupation contracts will have standardised terms that are split into four sections;

• Key matters, which summarises the tenancy; such as the names of the parties and property address.
• Fundamental terms which include the repossession procedures and the landlords repair obligations.
• Supplementary terms that deal with the day to day of an occupation contract i.e if a property is left unoccupied for an extended period the landlord must be informed
• Additional terms covers any other agreed upon matters, such as pets, which are in line with the Consumer Rights Act 2015.

All landlords are now required to provide a copy of the occupation contract to the tenants, who will be known as ‘contract-holders’. The written statement can be issued in hardcopy or, if the contract-holder agrees, electronically.  This must be done within 14 days of the contract signing. Failure to do so might result in penalties being issued to the landlord. These changes will not apply to holiday lets, tenancies longer than 21 years, nil rent tenancies, and company lets. 

How joint contracts end has also changed in Wales. Under the current system when a tenancy ends, it ends for all parties. As a result, in instances where a family breaks up all tenants may have to leave the property. However, under the new system if only one tenant chooses to give notice then they are only one removed from the contract. Additionally, tenants can be added to the contract mid term without the need for an amendment of contract. 

Fit for Human Habitation

Another aspect of the Renting Homes (Wales) Act 2016 is the implementation of a fitness for human habitation requirement. From July 15th 2022 landlords will now be responsible to ensure that their properties meet this requirement with a grace period until the 15th of July 2023. The duties required to meet the fit for human habitation criteria are;

• Have mains-wired interlinked smoke detectors on each floor
• Have carbon monoxide detectors in every room with gas, oil, or solid fuels
• Have had a satisfactory electrical installation condition report (EICR), with a copy given to the contract-holder within 7 days of the report or tenancy

Generally, the landlord is required to keep the property in a state fit for human habitation based on key hazard factors such as gas safety, domestic hygiene considerations and electrical safety.

Change in Eviction Notices

The largest change in the Renting Homes (Wales) Act 2016 is how evictions will work once it comes into effect. Here is a brief overview of what these changes are;

• Section 21 style notice periods (known as no fault evictions) are increased from two month to six months. It is also no longer possible to issue a notice in the first six months of a contract. This means contract-holders will have a minimum 12 months of security in their tenancy. 
• A possession notice cannot be given if a court deems that the eviction is ‘retaliatory’ (where a landlord serves notice on a tenant because they asked for repairs or complained about housing conditions)
• An energy performance certificate, a gas safety certificate and an EICR are now required to serve a possession notice. 

We have covered the significant changes to evictions in more detail here.

This Act represents the biggest change to housing law in Wales for decades. The Act will make it simpler and easier to rent a home in Wales, replacing various, complex pieces of existing legislation and case law with one clear legal framework. When in place, contract-holders in Wales will have greater security of tenure than in any other part of the UK.”

Julie James, Climate Change Minister and former Housing Minister

Summary

Overall the changes happening to how renting works in Wales are significant, affecting many areas of the industry. All previous ASTs are being converted to new occupation contacts which now have standardised terms that can be used. Rented properties must meet new fit for habitation requirements for a tenancy to be valid. If you are a landlord and want to talk to a professional property manager about how these changes will affect you, please feel free to get in touch with us here.

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