To celebrate the coming into force today (or yesterday if you are reading the email update) of a whole new housing legislative scheme in Wales, and thus a whole new jurisdiction of which I know little, we have a guest post from Eleri Griffiths, a barrister or bargyfreithwraig at One Pump Court, who has – mercifully – told us what is happening.
Renting Homes (Wales) Act 2016: A new dawn for renting in Wales.
The Renting Homes (Wales) Act 2016 has now (finally) come into force. It only took a mere 7 years to get from Royal Assent to implementation (1 December 2022). In that time it was amended a few times before it even got going, but the new regime for renting homes in Wales is now, at last, here.
To call it an overhaul of residential letting in Wales is an understatement. Almost all aspects of Welsh landlord and tenant law are affected in some way or another, and it’s fair to say that this is the Welsh Government really stretching its legislative muscles (although an unceremonious U-turn on asylum seekers accommodation suggest it may have been told off for over-stretching at times). A bit chaotically, policy adjustments were still happening in early November, so there’s a chance that yet more things will have changed before you get to the end of this post.
With this in mind, it’s impossible to set out all of the changes here, but below is a summary of some of the main changes and highlights to keep an eye on.
1. “Occupation contracts” – the new kid on the block.
From 1 December 2022, “occupation contracts” will govern the relationships between landlords and occupiers, and, except in limited cases, the former schemes for assured, secure and other tenancy regimes will end in Wales. Landlords will have to provide a “written statement of contract” to the contract holder within specified time limits and will face potentially serious consequences if they don’t get that right. It could prevent them recovering possession later, or land them facing a claim for damages from the contract-holder (which can be offset against a rent arrears claim). Given that this rule applies to all occupation contracts, things could get very interesting, very quickly if landlord’s don’t pay attention from the start. Existing agreements will “convert” to occupation contracts, and in some respects are treated differently to ones starting after 1 December 2022. This preserves some rights which both landlords and occupiers had before.
The main benefit for all involved however is that if a party to the contract wants to know their rights and responsibilities, they should only need look to the contract, rather than having to go navigate the plethora of housing statutes and case law. This can only be a good thing, especially given the serious prevalence of legal advice deserts in Wales.
There remains some difference in treatment for private landlords and social landlords, though the distinction between local authority and housing association landlords is largely gone – they are all now “community landlords” and treated the same. Community landlords will usually have to give secure contracts and private landlords will usually give standard ones.
2. All change for possession notices and grounds.
The grounds for possession under earlier Acts are (in most cases) replaced by new grounds:
- breach of contract or estate management grounds. These are always discretionary grounds, subject to a 1 month notice (except for ASB) and a finding that it is reasonable to make the order, or
- in some standard contract cases: serious rent arrears grounds (similar to Ground 8 of the Housing Act 1988, 14 days notice) and by services of a (no fault) landlord notice (similar to Section 21, see below).
Aside from scenarios where the contract-holder has themselves served notice ending the agreement, these are the only mandatory grounds.
As the mandatory grounds are not available to secure contracts created after 1 December 2022, a landlord will only have the discretionary grounds to rely on. The days of social landlords using mandatory possession grounds will therefore, hopefully come to an end. Where a landlord relies on an estate management ground, the Court will also always have to be satisfied that there is suitable alternative accommodation as well as the reasonableness of making the order).
Section 21 is replaced by a similar “Section 173” regime. However, it will only apply where a term allowing the landlord to use this has been specifically included into the contract, rather than by statutory right. The notice requirements differ slightly if the contract falls within a specific category (usually those given by community landlords), but for the most part will have to be 6 months duration, served only after the first 4 months of the contract and used within 2 months of the date given for the occupier to leave. There are also limits on how many times a landlord can withdraw and re-serve these notices. Initially only 2 months’ notice would be needed for converted contracts, but the Welsh Government has now changed this to 6 months, but effective only after 1 June 2023. This makes little sense for preventing evictions over winter.
3. Joint contracts – easier in, easier out.
Adding and removing occupiers just got a whole lot easier in Wales.
First, new procedures facilitate some occupiers leaving without prejudicing the others. This makes things a lot easier when occupiers have fallen out and only some want to stay or, critically, in cases of domestic abuse. Secondly, one contract-holder will no longer be able to end the agreement for everyone else without their consent, a notice seeking to do so will only bind themselves, which is again a relief for abuse victims worried about their contract being ended by their abuser serving a notice to quit. Thirdly, whilst landlords will still have some control over people being added or removed from the contract, they will have to act reasonably (whether in withholding consent or imposing conditions), and unreasonable actions can be directly challenged in Court. All of this seems a far more civilised way of dealing with changes during a contract’s lifetime which, with the best will in the world, is always a risk for occupiers.
4. Abandonment
The process of excluding an absent contract-holder is significantly easier whether against a sole or joint contract-holder. A landlord can do so without any Court order and one joint-contract holder can exclude another by an application to the Court. There will always be a mandatory investigation period and opportunity to challenge the outcome, but new strict deadlines to do so will make it very dangerous for occupiers to leave their homes for lengthy periods.
5. Playing catchup on fitness for human habitation & retaliatory eviction
By taking so long to implement this Act, Wales unfortunately managed to get itself left behind when new fitness for human habitation and retaliatory evictions protections were introduced in England in recent years. It’s really unfortunate that it’s taken so long after then to catch up. The recent case of Awaab Ishak shows us why effective law on housing conditions is so important. At last equivalent provisions on both fitness and retaliatory eviction in now in place in Wales. A term on fitness for human habitation will be a fundamental part of all occupation contracts. Housing conditions will be enforceable in a similar way as in England except in a few key respects:
a. where mandatory safety rules regarding smoke or CO alarms and premises are not met, premises will be deemed unfit for human habitation without an occupier needing to prove anything else.
b. where the contract says so, rent will simply not be payable at all where the property is unfit for human habitation. Such a term will be included in new model contracts so will bite unless actively removed.
c. the Court will be able to determine whether an eviction is retaliatory without the need for there to have been any action taken by the local environment health department.
Unlike in England. This makes the defence to a “no-fault” claim far more accessible and effective than it’s English counterpart.
6. Succession rights – survivorship (and sense) restored
These are considerable enhanced in many cases. Most notably, survivorship falls outside of the succession rules, which has previously created real difficulties when children have been unable to succeed a tenancy after the death of both parents. There will also in many cases be two opportunities to succeed a contract following the death of sole contract-holders – first from a spouse, civil partner or similar relation, if there is one, and then to other close family members. As independent living has become a more distant dream for many young workers still living at home (whether by rising rents or inability to buy), this has to be a welcome development in creating secure long-term living conditions for families in the rental sector.
Conclusion
Historically, there has been little case law emerging from Wales on its diverging housing law – virtually no reported higher court litigation followed the Housing (Wales) Act 2014 (other than the notable Jarvis v Evans – see NL’s report here). It’s not yet clear of course whether this will be the case under the new Act, which opens entire new avenues of litigation (e.g. compensation for failing to provide the written statement), whilst closing others (e.g. many if not most mandatory grounds possession claims). However, given that this Act will affect the overwhelming majorities of residential lettings in Wales from now on, and there are, as always, considerably more knots to straighten out than the previous Act, test cases are more likely to emerge this time around. Swift clarification from senior Courts will be all the better.
This is a useful synopsis. However, the final paragraph in point 2 says that for the most part, a Section 173 notice must have a 6 month duration and can only be served after the first 4 months of the contract.
I believe this conflates the law as it applies to new Occupation Contracts granted from 01/12/2022 with that which applies to Converted Contracts (specifically those which were ASTs prior to 01/12/2022).
My understanding is that for new Occupation Contracts, the minimum notice duration is 6 months and can only be served after 6 months of occupation, whereas for Converted Contracts the minimum notice duration is 2 months and can only be served after 4 months of occupation, at least until 01/06/2023 after which the same periods apply as to new contracts (6 months duration and 6 months from occupation).
In both cases the ‘shelf life’ of the notice is 2 months.
The provisions refer to Fitness for Human Habitation (s91 of the 2016 Act) and the matters are given in the Renting Homes (Fitness for Human Habitation) (Wales) Act 2022. There are 29 matters based on the 29 Hazards listed in the Housing Health and Safety Rating System (see the Operating Guidance – https://www.gov.uk/government/publications/hhsrs-operating-guidance-housing-act-2004-guidance-about-inspections-and-assessment-of-hazards-given-under-section-9
There are several points to note –
First, there is no explanation of how to assess the matters given in the 2022 Act and no reference to either the 2004 Housing Act that brought in the HHSRS (the Housing Health and Safety Rating System (Wales) Regs 2006) nor the HHSRS Operating Guidance. The assessment of an HHSRS Hazard is generally made by a local authority Environmental Health Officer/Practitioner (EHO or EHP) and any challenge is before the Residential Property Tribunal. Under the 2016 Act challenges would go to the County Court.
Second, the 2004 Housing Act refers to Category 1 and Category 2 Hazards – if a Hazard is judged Category 1 the local authority is under a duty to take enforcement action to require remedial action or prohibit occupation; if a Category 2 Hazard then there is a power to act. This raises a question – is a dwelling “unfit” under the 2022 Act if there is a Category 2 Hazard, or only if there is a Category 1 Hazard? And, anyway, how is a Hazard (matter) to be assessed.
Third, as local authority EHO/P’s are generally seen as experts in assessing an HHSRS Hazard for the purposes of the 2004 Act, would the best advice to a tenant be to contact the local authority for an inspection by an EHO/P. If that inspection establishes that an HHSRS Hazard exists, this should justify the tenant claiming the dwelling is “unfit” until the appropriate action has been met?
Fourth, the Welsh Office Guidance for landlords on the 29 Fitness matters fails to give the reasons the matters are considered important – the health and/or safety outcomes from exposure to the matters, and only sets out preventative measures. TheGuidance for Landlords given for the HHSRS does give the health/safety outcome. This means the Welsh Officer Guidance gives no reason why the 29 matters are important, and so gives no reasons for consideration if a case landed in Court. (The Welsh Guidance is at –
https://gov.wales/fitness-homes-human-habitation-guidance-landlords-html
and the HHSRS Guidance at –
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/9425/150940.pdf
It is a question for the court whether the property “is so far defective in one or more of those matters that it is not reasonably suitable for occupation in that condition.”
There is no reference to the 2004 Act in LTA 1985 deliberately (I wrote it, so I’ve got an idea). Firstly, to ‘future proof’ against future changes to the prescribed hazards (Wales went a different route). Secondly, precisely to avoid HHSRS calculations having to be done.
There is no difficulty in the courts assessing unfitness. They’ve been doing it for years in Section 1 Defective Premises Act 1972 cases. If an EHO had inspected and found Cat 1 or quite possibly Cat 2 hazards – with regard to the current occupiers – then this would clearly support a claim for unfitness, but it is not necessary. These are civil claims, not regulatory matters.
Category 1 requiring enforcement? If you consider a Hazard Awareness Notice to be enforcement. Personally, I struggle to see that it is.
Thank you, very thorough article and, particularly, the responses.
It’s fascinating that the practical effect of the new régime in Wales: less houses up for residential lets, at higher rent levels, and greater diversification away therefrom into holidays lets, Abnb, etc.looks set reduce supply when more is needed.
The Welsh Government’s new funding support scheme for local authorities seems to reach for the landlords’ properties needing very little money spent. It would be unsurprisinhg if a significant proportion of poorer-quality Welsh housing stock (c.6%?) looks set to fall out ouf of circulation altogether in the coming year or two as the Act bites.
Having witnessed the simplicity, cheapness and surge in supply brought about by the introduction of the HA 1988, my apprehension is that the present approach will encourage stasis.
Basically, having already removed several rungs off the housing ladder, we are now setting about knocking the first few rungs of the rental ladder too.
(On a more cheerful note, I’ve never heard anyone use ‘bargyfreithwraig’ in this part of West Wales – we’d jusy say ‘bargyfreithwr’ regaredless odf gender, same for Solicitors. I’d never noticed that before!)