Are landlords ready for the Renting Homes (Wales) Act?

Online lettings platform lettingaproperty.com has reported an increase in landlords in Wales seeking support to comply with legislative changes resulting from the Renting Homes (Wales) Act 2016. The Act comes into force on 1st December 2022. It aims to improve the rental process by replacing various complex pieces of legislation with one clear framework.

Landlords in both the private and social sectors will have new procedures to follow once the Act comes into force. These relate to everything from issuing contracts and serving notice, to property safety and maintenance.

Jonathan Daines, Founder and CEO, lettingaproperty.com, said: “Landlords in Wales are understandably concerned about the new Act and what it means for them. Many self-managing landlords are reaching out for support as they seek to navigate the multitude of changes. While the Act itself is positive news for the future of the rental sector, the need to ensure compliance is concerning existing landlords.”

One of the key changes will be that Assured Shorthold Tenancies (ASTs) will no longer be used in Wales after 1st December 2022. Instead, there will be standard occupation contracts between landlords and contract-holders (tenants). Tenants must also be given a written statement of the contract within 14 days of the occupation date.

On 1st December, all existing ASTs in Wales will ‘convert’ to a standard occupation contract. Landlords and lettings agents have until 1st June 2023 to issue a new written statement for converted contracts.

The Welsh government have acknowledged that it’s unfair to simply disregard any AST clauses that go against the new Act, so a conversion process has been published to help landlords and agents reformat their existing agreements without disregarding all clauses. Any clause that goes against the fundamental terms of the new model contract cannot be brought over, but many others can, provided they comply with the Act.

The new model makes it easier to add additional tenants to a contract – or to remove them – new contract isn’t required, just a written statement of the contract by the landlord or agent. This makes it easier for all parties should the tenants’ circumstances change. If a person is leaving, they simply need to inform the landlord/agent, and the other tenants, with the correct notice period.

In property safety terms, the repair obligations of the Landlord and Tenant Act 1985 have now been replaced with Part 4 of the Renting (Homes) Wales Act 2016. This clarifies that landlords are responsible for the safety and repair of the property. Tenants still have a general duty to care for their home. Landlords can also add supplementary terms relating to the specific care of the property, such as not making any alterations without the landlord’s permission.

New safety requirements for properties in Wales include having an electrical inspection and EICR every five years, ensuring there are working mains-powered interlinked smoke alarms on every floor, and ensuring there is a carbon monoxide alarm in every room with a gas appliance

The final significant change relates to notice periods. The minimum notice period for any breach of contract is one month. However, it can be shorter in the case of rent arrears or anti-social behaviour. The Act also aims to make abandonment repossession claims easier, by removing the need for a court order.

‘No fault’ notices can’t be issued within the first six months of the contract. They must also be issued with a minimum notice period of six months. This measure has been introduced to “guarantee people a minimum twelve-month occupancy from the start of their contract, unless they have breached their contract,” according to Rent Smart Wales. Furthermore, break clauses can only added to fixed-term contracts of two years or more and cannot be used in the first 18 months of occupation.

Also significant in relation to notices is that landlords won’t be able to issue them if they haven’t complied with their legal obligations. This means that landlords who haven’t met safety obligations, provided written agreements or registered with Rent Smart Wales will not be able to issue notices.