Renting Homes Wales Act 2016: Information landlords need to know

12th December 2022

The Renting Homes Wales Act 2016 was passed by the Welsh government in 2016.

The law became effective on December 1, 2022. It makes a number of tenancy legislation modifications that will affect both the social and private rental markets.

The law seeks to:

• simplify and ease the process of renting a house in Wales for both landlords and tenants.
• provides greater security and clarity to renters and landlords
• enhances the condition of rental properties in Wales.

Welsh landlords who own rental properties must be informed of all the changes and update their properties, contract holders and documentation under the new Renting Homes Wales Act regulations.

Occupation contracts

According to the Act, licensees and tenants are referred to as “contract-holders.” An “occupation contract” will be issued to contract holders (which replaces tenancy and licence arrangements).

Occupational contracts come in two different forms:

A secure contract: for the use of social  landlords, 

A standard contract: This is the typical standard contract for the private rented sector (PRS), while it may also be used in certain situations by local governments and RSLs (such as a “Supported standard contract” within supported housing).

Four different terms must be included in an occupation contract: 

Key matters: The names of the parties and address of the property.  Every contract must include these.

Fundamental Terms: Include the possession procedures and the landlord’s responsibility for repairs. They also cover the most crucial elements of the contract.

Supplementary Conditions: Cover more practical, day-to-day issues relating to the tenancy agreement, such as the need for the tenant to notify the landlord if the property will be vacant for four weeks or longer.

Additional Terms: explains any other issues that have been particularly agreed upon, such as a clause relating to the care of pets. According to the 2015 Consumer Rights Act, any added conditions must be reasonable.

You must provide each contract holder with a “written statement” of the occupation contract. All of the contract’s terms must be included in the written statement.

What is a written statement?

Undoubtedly, one of the most important provisions of the Renting Homes Wales Act laws is written statements. The written statement must include your contract’s terms as well as any clarifications the landlord is required to provide. The terms outline both the tenants and the landlord’s rights and obligations.

A landlord is required to provide a written statement of the contract to the contract holder(s) in cases where the tenancy is an occupation contract, including converted tenancies. The consequences for not submitting the statement are severe. Tenant is entitled to reimbursement of one day’s rent every day of non-compliance for up to two months, plus interest, if written statement is not provided (section 35). The contract’s holder may deduct the cost of each day’s rent from the total amount due (section 88). There are other provisions for an incorrect or imprecise statement. Furthermore, until a written statement has been provided, the landlord cannot serve a possession notice.

The written statement must be given for any new leases signed after the implementation date within 14 days of occupancy as required under the contract. Landlords have a maximum of six months to give their contract-holders a written statement of the converted occupation contract. The written statement may be delivered to the contract holder in print or, with their consent, electronically.

Ending joint occupation contracts

These new agreements of the Renting Homes Wales Act do function differently, most notably in how they are terminated in the case of joint tenancies and one individual decides to leave.

Currently, when a tenancy is terminated, the agreement between all parties is also terminated. Therefore, it may be necessary for all tenants to vacate if you have a joint tenancy agreement.

With the new process, if one tenant decides to leave in a joint tenancy, only they are released from the lease, and the other tenants can continue to occupy the space under the same conditions. In a similar manner, renters can be added to the contract in the middle of it without a deed of assignment. Just be mindful that the remaining contract holders would need to cover the whole rent for the property if one contract holder leaves, which could increase your rent.

What is changing about notice requirements and “no fault” evictions?

Under the new legislation, a Section 173 notice will replace Section 21 possession notice. This raises the minimum amount of time that landlords must provide renters under a periodic contract before evicting them to six months in cases of “no fault” eviction. 

If you have an existing tenancy and you have converted the contract, in regards to a section 173, you will only be obliged to provide two months’ notice for tenancies beginning before December 1, 2022 but only with those tenancies that are ending before 31st May 2023.

A Section 173 notice cannot be served during a fixed-term standard contract and can only be served once after six months for periodic standard contracts.

Therefore, a periodic contract holder will be entitled to occupy the property for a minimum of one year, unless they violate the terms of the contract.

Safety Requirements

According to the new laws, landlords must now ensure that a privately rented property is “fit for human habitation.” Landlords should make sure, according to the regulations outlined in the Renting Homes Regulations 2022 that: 

• Every floor has at least one operational smoke alarm connected to the building’s main power supply.
• There is a functioning carbon monoxide alarm in every room with a gas appliance, an oil-fired appliance, or a solid fuel burning device.
• The contract holder is given a valid Gas Safety Certificate, Electrical Inspection Condition Report (EICR), written confirmation of any works following an EICR and Energy Performance Certificate.

Landlords and renting agents should keep in mind that if a contract holder feels that a property does not comply with the new fitness for human habitation rules, they may be entitled to withhold rent based on a number of key hazards.

Restrictions with notice

A number of new rules will limit the use of possession notices unless the landlord has completed specific requirements.

Additionally, landlords will not be able to issue a notice of possession if they:

• Haven’t issued written statement and if issued late requires 6 months 
• Haven’t given Landlord (or agent) contact details in prescribed form 
• Failed to provide EPC (initially only) 
• Haven’t protected the deposit 
• Take a prohibited payment 
• Not installed smoke alarm and CO alarm Haven’t provided a gas and/or electrical safety WITH confirmation of works 
• If you are not registered/licensed with RSW 
• Have no HMO licence (where required)

Additionally, a notice might not be issued if the property lacks appropriate smoke and CO alarms.

Possession may also be withheld if the courts determine that a notice was given in an effort to avoid the landlord’s duty to make repairs or keep the property in a condition that is fit for human occupancy.

Abandonment

After giving a four-week warning notice and conducting your own inquiries to confirm the property is abandoned, you can take back possession of an abandoned property without a court order.

Finally

With so much changing in Wales, landlords may find complexities within the Act, especially if converting a contract and ensuring compliance on both documentation and property standards. We are here to help and guide you through the whole process. Please contact Seraph by email at info@seraph.pm  or call at 02921 671444. 

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