Housing is devolved in Wales and the National Assembly continues to legislate to modernise housing law, diverging further away from England.
In January 2016, The Renting Homes (Wales) Act 2016 received royal assent although has not yet come into force. The Act sets to overhaul the private rented sector in Wales in order to simplify the letting process and provide more transparency and flexibility. The Act will introduce ‘occupation contracts’ which will apply not only to future occupation contracts but also to all existing assured and assured shorthold tenancies and assured agricultural occupancies. Rent Act 1977 and Rent (Agriculture) Act 1976 will remain unaffected.
Under current legislation, the vast majority of tenancy agreements come within the Housing Act 1988. Under section 21 of the 1988 Act, landlords are able to regain possession of their property at the end of the fixed term giving two months’ notice. The Renting Homes (Wales) Act 2016 retains the landlord’s ability to serve a two months’ notice on a contract-holder under section 173.
Wales recognises the importance for a landlord to regain possession of their property without having to cite a reason but want to balance this with giving tenants a longer secure initial term and a longer period to find an alternative property. The Renting Homes (Amendment) (Wales) Bill was introduced into the Welsh Assembly on 10 February 2020 to help achieve this.
The Renting Homes (Amendment) (Wales) Bill
The Renting Homes (Amendment) (Wales) Bill proposes to increase the notice period under section 173 from two months to six months and proposes to increase the period before the landlord can issue a section 173 notice from four months to six months, providing the contract holder with twelve months security of tenure.
Where a breach of contract has occurred, a section 157 notice can be served stating the relevant possession ground pursuant to one month’s notice (or two weeks’ notice for serious rent arrears) which can be challenged in court. This is similar to the existing section 8 notice under the Housing Act 1988.
The Bill places a six-month restriction on issuing a section 173 notice following the expiry of a previous notice to prevent landlords issuing notices preemptively.
A break clause can only be included within an occupation contract with a fixed term of 24 months or more and cannot be activated until month 18, pursuant to a minimum of six months’ notice.
There is concern that the legislation will not allow employers who accommodate employees sufficient flexibility.
The Equality, Local Government and Communities Committee has launched a public consultation which closes on 12 March. In addition to the consultation, the Committee has also launched a survey on the Bill.
Please note that the Bill is focused only on the security of tenure for tenants. It is recognised that there are other problems with the 2016 Act which will need to be addressed before implementation but that will not be through this piece of legislation.
The CLA will submit a response and would like to understand the views of our members. If you are a residential landlord with property in Wales, we would welcome your thoughts on the below:
- Do you agree with the principle of giving tenants 12 months security (6 months fixed term and a 6-month notice served after fixed term)?
- Do you see any unintended consequences of offering a longer notice period?
- Do you have any further comments on either the 2016 Act or 2020 Bill?
Please contact me by email at email@example.com.