Social Housing Speed-read: Delay to Welsh Housing Law Reform
1st June, 2022
The introduction of the new housing legislation in Wales has been delayed from 15 July 2022 to 1 December 2022.
The Renting Homes (Wales) Act 2016 has been described as “the biggest change to housing law for decades” and is due to replace much of the Housing Act 1988.
In this article we look at the pending changes and the effect for social housing landlords.
Occupier’s Status:
Welsh Registered Social Landlords will become “Community Landlords” while a tenancy shall be known as an ‘Occupation Contract” and the tenant a ‘Contract Holder’. Assured tenancies, assured shorthold tenancies and some licenses shall be replaced with the aforementioned contracts.
There is no “opting in” and once implemented, existing tenancies will automatically transfer into occupation contracts and will be governed by the new legislation
Occupation Contracts:
Once in force, there will be two types of occupational contracts.
Community landlords will be granting primarily ‘Secure Contracts’ which shall replace the Assured Tenancies, though there are occasions where they will grant ‘Standard Contracts’ replacing Assured Shortholds. This shall be the situation for introductory tenancies and perhaps supported tenancies.
The terms of the occupational contract will be decided between both parties and statute. It will become a statutory requirement to incorporate ‘key matters’, ‘fundamental terms’ and ‘supplementary terms’ with the option for ‘additional terms’. Landlords must subsequently provide a written contract to contract-holders within a particular time period. If not provided with the contract, contract-holders can apply to the court to set the terms. Failure to provide the contract can result in landlords paying compensation to the contract-holders.
The pending legislation also provides specifics around the obtaining of landlords consent (including strict timeframes and meeting a test of reasonableness) with failures to adhere to deadlines resulting in implied consent. A contract holder also has the right under the proposed legislation to challenge the reasonableness of refusal of consent via an application to court. and a judgement ordering consent or reconsideration.
The Act is also due to enact a new review mechanism under the Renting Homes (Review of Decisions) (Wales) Regulations 2022) which provides for both an internal review and an external review at the county court using the principles of Judicial Review.
Succession:
Once implemented, the Act will extend succession with both ‘priority’ and ‘reserve successors’. If upon the death of the contract-holder there is a qualified successor, they will succeed the contract. If there are two priority successors the landlord shall choose the successor or, in the event that there are no priority successors and two reserve successors, the landlord shall choose which reserve successor succeeds. There may be a following succession from a priority succession though no further for a reserve succession.
Disrepair:
Landlord’s repairing obligations are also due to be extended under the Act. As well as specific requirements mirroring the Section 11 obligations, landlords must also meet the Renting Homes Wales (Fitness for Human Habitation) (Wales) Regulations 2022 and the 29 matters and circumstances therein. It remains that there are limitations on the duty to repair such as notice and access, and now being able to repair at a reasonable expense and making good damage after inevitable accident.
Breach of Tenancy
In the event that a contract-holder believes that their landlord has breached their occupation contract, there is a statutory right to withhold rent. Whilst we believe this is to be applied largely to matters of disrepair, there is scope for this to be applied more generally to the right to quiet enjoyment. In these situations, the community landlord is able to apply to the court and ask for a declaration stating whether the money is being lawfully withheld by the contract holder.
A claim by a landlord for breach of tenancy against a contract holder will be governed by section 157 of the proposed Act which will also include the implementation of a new suite of notices and court forms.
Security of Tenure:
Once implemented, it remains that community landlords can only obtain possession by way of a possession order after serving the occupation-holder notice of seeking possession. Similarly, where terminating a secure contract the notice must specify what ground the landlord intends to rely on. These will be known as Section 205 grounds.
As before with discretionary ground for possession the landlord is required to prove reasonableness to the court and helpfully, a list of considerations and circumstances which the court will take into account will be found within Schedule 10 of the Act.
In addition to the above, when terminating a standard contract the community landlord will be able to use a ‘Landlord’s Notice, a similar procedure to the Section 21 procedure with similar requirements but allowing for six months’ notice must now be given.
Anti-Social Behaviour Crime and Policing Act 2014
At the time of drafting this article, the new Act does not interfere with the ASBCPA and the availability of ASB injunctions will remain in place.
Will these changes be implemented in England?
We simply do not know but the changes are very interesting. There has for some time been discussion surrounding tenant’s rights, including the potential abolition of the Section 21 Notice and the Charter for Social Housing Residents 2020 so we will have to watch and wait to see if England does follow Wales.
How should landlords prepare?
Though the legislation has been postponed until 1 December 2022, it would still be prudent to draft compliant occupation contracts and respective policies ahead of time and review the new legislation carefully.
For those existing tenancy agreements which shall be converting once the Act is implemented, landlords have up to six months to provide contract-holders with written statements. For new contracts entered into once the Act has been enacted, landlords have 14 days from the date of occupation to issue a contract. Failure to comply with this guidance can result in penalties stated above.
Melanie Dirom, Director, has been practicing Housing law in Wales for over 10 years and is assisting the firms Welsh housing clients (public and private) to navigate the new landscape. Please do feel free to contact Melanie to discuss any requirements the pending change in legislation may bring.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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