Assessing the impact of the Renting Homes (Wales) Act 2016
William Golightly reflects on the Renting Homes (Wales) Act 2016, one year on from its commencement.
Blwyddyn Newydd Dda, annwyl ddarllenydd! (Happy New Year, dear reader!) The Renting Homes (Wales) Act 2016 (“the Act”) came into effect on 1 December 2022, the Christmas present all housing practitioners who work in Wales were delighted to receive after many years of delay. Where are we one year on?
Firstly, it is worth reflecting on the significant scale of the changes brought in by the Act. In its current form, the Act runs to 248 pages, 263 sections and a further 16 schedules. For comparison, the Renters (Reform) Bill (currently at its bill committee stage and introducing changes only in England) runs to a much more modest 89 pages, 69 paragraphs and 4 schedules. Not just in quantitatively but qualitatively, the Act has brought huge changes in Wales. The terminology has changed along with the substance: the vast majority of existing tenancies have been converted to “occupation contracts”, held by “contract-holders” rather than “tenants”. Occupation contracts are broadly categorised as “standard contracts” (for most private landlords) and “secure contracts” (for most social landlords). The terms of their occupation are divided into “fundamental terms” (which are key terms automatically incorporated into occupation contracts by the Act itself), “supplementary terms” (regulations created by Welsh Ministers automatically incorporated into occupation contracts) and “additional terms” (express terms other than fundamental and supplementary terms which go to matters “key” to the contract).
There will still be tenancies beyond the scope of the Act, including occupancies where no rent, or equivalent consideration, is paid, but the vast majority of existing and future tenancies will now fall within its ambit and it is the retrospectivity of the Act which has made its changes so wide-ranging and immediate.
Secondly, termination provisions have considerably evolved in favour of contract holders. The provisions have become much more tenant friendly: for most contract-holders of standard contracts, a landlord’s “no fault” possession notice can only be given after the first six months of the tenancy (so far so similar to the section 21 Housing Act 1988 procedure in England) but the notice period is six months long (so much more generous than section 21). In practice that means that the minimum length of a fixed-period standard contract in Wales is now 12 months rather than 8 months. Further, there are numerous hurdles a landlord must comply with before a notice can be served: not just compliance with gas safety certificates, EPC, deposit requirements and prohibited payment (as was previously the case in Wales and currently remains so in England), but the landlord must provide a written statement of terms as well as a statement of information about the landlord; install working smoke and carbon monoxide alarms and supply an electrical condition report.
Thirdly, there are clearly growing pains in the Act which may likely lead to amendment or a sea-change in practitioner approach. Some of the largest institutional landlords in Wales are universities, who for obvious reasons of flexibility traditionally provided licences to students, but must now provide occupation contracts. If students remain in occupation following the expiry of the fixed-term occupation contract, they will convert to periodic contract holders, which have more exacting requirements for recovering possession. Equally, what happens to a student is moved room, and what happens if they enter into serious rent arrears? These were all considerations which drafters of additional terms will have to be conscious about and are not directly confronted by the Act.
Finally, on a constitution level, the Act is itself indicative of the impact of devolution in Wales: simply put, Wales is a more tenant-friendly place to rent property than England. But on a more practical level for housing practitioners, Wales is not a place where unwary landlords (and their lawyers!) can dabble without a strong working knowledge of the new regime. This is most typified by cases where landlords have not provided written statements (which they had until 1 June 2023 to do) to their contract holders. The failure to do so exposes them to numerous sanctions, including (in practical terms), a bar on recovering possession by the no fault route for 12 months and the payment of compensation to the contract holder.
William Golightly is a barrister at Gatehouse Chambers.
