NOTICE TO ALL WELSH LANDLORDS – ACT NOW
The Renting Homes (Wales) Act 2016 (‘the Act’) comes into force on 15 July 2022, and introduces a radical change to both existing and new residential Tenancies and Licence Agreements covering properties in Wales.
Under the provisions of the Act, residential Tenancies and Licence Agreements will be replaced by ‘Occupation Contracts’ and tenants will be referred to as ‘contract-holders’ as opposed to tenants. Whilst all existing residential Tenancies and Licence Agreements will automatically convert to Occupation Contracts on the 15th July 2022, landlords will be required to issue a written statement to occupation contract-holders (tenants) confirming the details of the Occupation Contract which will replace their current Tenancy/ Licence Agreement; the written statement must contain all newly required criteria as set out in the Act and must be issued within six months of the 15th July 2022 (i.e. by 15th January 2023). Failure to adhere to this timescale may result in the landlord receiving a monetary fine.
For new Tenancies and Licence Agreements granted on or after the 15th July 2023, a landlord must issue the above mentioned written Statement within two weeks of the contract-holder’s (tenant) occupation of the property.
IMPORTANT: The above will affect all existing and new landlords. If you are a landlord you must act and ensure that you comply with the above processes. In order to ease you through the changes, we will be offering fixed priced packages to help landlords to ensure that they are compliant with the new law.
“No Fault” Evictions
A distinctive change introduced by the Act will be the Notice period applicable to ‘no fault’ notices/evictions. Under the current law, if your property is rented under an Assured Shorthold Tenancy, a landlord is able to serve a “no fault” Notice to Quit with a minimum two month notice period. From the 15th July 2022, the notice period will increase from two months to six months. In addition to the increased notice period, a landlord will not be able to serve such notice on a contract-holder (tenant) at least until six months has elapsed since the beginning of the Occupation Contract. Therefore, a contract-holder (tenant), on the grant of Occupation Contract, will have the right to stay at the property for a minimum of 12 months (as long as they do not breach the terms of the Occupation Contract).
Where a contract-holder has breached the terms of the Occupation Contract (e.g. non payment of rent), the landlord will be able to serve a possession notice on the basis of that breach which has a notice period of one month.
Any Landlord thinking about terminating an existing Tenancy agreement must act now if they wish to do so before the new law comes into force. Landlords must bear in mind that there are still significant requirements for them to comply with now before serving a notice to quit, and you should not leave thinking about this until the last minute!
Fitness for Human Habitation Requirements
The new Act will place further obligations on Landlords to ensure that a property is “fit for human habitation” prior to an Occupation Contract being entered into. A contract-holder will not not be liable to pay any rent whilst the property is deemed not to be fit for human habitation, and the landlord will be unable to issue a notice to quit, or exercise a break clause if they are not in compliance with the requirements of the Act.
The Act also introduces new requirements relating to smoke alarms, carbon monoxide alarms, and electrical safety which were not previously required.
Rent Smart Wales Requirements
There will be no changes to the Rent Smart Wales registration and licencing requirement which continue to apply.
We will be offering fixed price packages to assist Landlords with the upcoming changes. If you are looking for further guidance, please contact Demi Davies on 01558 558983 or telephone your usual Agri Advisor contact.