A summary of the Renting Homes Wales Act 2016 (“The Act”)
The Act, which substantially changed the renting system in Wales, came into force on 1st December 2022. This article aims to summarise the key elements of a complex piece of legislation that has undoubtedly left a number of landlords and estate agents confused.
To start with, let’s look at the new terms:
A tenancy agreement is now referred to as an ‘occupation contract’ and tenants are now known as ‘contract- holders’. There are two types of landlords; i) community landlords (i.e. local authorities, registered social landlord and other authority), and ii) private landlords.
What is an occupation contract?
Tenancies which are not occupation contracts unless notice is given by the landlord
- Holiday lets
- Accommodation shared with the landlord
- Accommodation in a care institution
Tenancies which can never be occupation contracts
- Tenancies for a fixed term of more than 21 years (whether or not terminable before the end of the term by forfeiture or the exercise of a tenant’s break clause)
- Business tenancies
- Agricultural tenancies/farm business tenancies
- A protected or statutory tenancy (Rent Act tenancies)
Occupation Contract Terms – A landlord must issue the contract-holder with a written statement of contract within 14 days of the occupation date. A written statement of contract must include:
- The names of the parties
- Key matters (the amount of rent or other consideration, the property address, the occupation date and the rental periods)
- Further key matters in respect of standard contracts: whether the contract is periodic or fixed term, the term for which it is made (if fixed) and any periods during which the tenant is not entitled to occupy the dwelling as a home
- The fundamental terms (see below)
- The supplementary terms (see below)
- Additional terms (not fundamental or supplementary terms but must be compatible with key matters, fundamental terms and supplemental terms)
- Explanatory information about matters prescribed by the Welsh ministers
**It is also a requirement that the landlord provides the contract-holder with an address where they may send documents intended for the landlord. The contract-holder must also be notified of any change of landlord or any change of the landlord’s address. Note that this is a fundamental provision which may be modified or omitted but only if agreed between the parties and if the modification or omission improves the position of the contract-holder **
The terms of the occupation contract are split into fundamental and supplementary terms. We look at these in more detail below.
| Fundamental Terms | Supplementary Terms |
|---|---|
| Must be included in all occupation contracts | provides for supplementary provisions, set out in regulations made by the Welsh Ministers, to be incorporated into occupation contracts. |
| Provides essential rights and obligations of the landlord and contract-holder | They contain supplementary provisions which are incorporated into the various kinds of occupation contract (except for supported standard contracts) |
| Certain of these fundamental provisions can be left out or modified by agreement between the landlord and the contract-holder, but only if the effect is to the advantage of the contract-holder | They deal predominantly with practical matters such as agreeing an inventory or keeping the property secure, although they do also set out some more significant provisions |
| They can be left out or modified by agreement between the landlord and the contract-holder to the advantage of either the contract–holder or the landlord (but not so as to be incompatible with a fundamental term) |
Failure to supply a written statement within 14 days of the occupation date:
- Contract- holder may apply to the court for declaration of terms
- Landlord may not be able to give s.173 or s.186 notice (see possession notices)
- Landlord must pay contract-holder compensation equivalent to a maximum of 2 months’ rent (with interest payable if longer than 2 months)
** Failure to provide a contract-holder with an address for the landlord attracts similar penalties; the landlord will not be able to give a s.173 or s.186 notice (see possession notices) or under a break clause at a time when the contract-holder has not been given an address for the landlord (or notified of a new address) and the landlord may be liable to pay compensation **
Additional requirements
EPC: minimum EPC rating of ‘E’. Copy of the EPC must be given to contract-holder failing which, Landlord may not give notice under ss 173 or 186 of the Act or under a landlord’s break clause (see possession notices)
Fitness for Human Habitation and Repair:
- Landlords must keep in repair structure and exterior of the dwelling and keep in repair and proper working order service installations in the dwelling
- Landlords must ensure working (wired) smoke and carbon monoxide alarms (in rooms with gas, oil or solid fuel burning appliances) are installed
- Landlords must provide contract-holder with a valid gas safety certificate
- Landlords must ensure that a valid EICR is given to contract-holder within 14 days of inspection
- Failure to comply with above means dwelling is deemed to be unfit for human habitation
Converted Contracts
The Act is retrospective, and any tenancy or licence that existed before 1st December 2022 will become a converted contract. The type of converted contract (I.e. whether the converted occupation contract is standard or secure) depends on who the landlord is and the type of tenancy agreement it was before 1st December 2022.
| Transitional provisions for converted contracts | |
|---|---|
| Written statement of contract | Must be provided to the tenant/contract-holder within 6 months (i.e. by 1st June 2023) |
| Landlord’s address | Must be provided to the tenant/contract-holder within 6 months (i.e. by 1st June 2023) |
| Fitness for human habitation | Landlord has 12 months to provide smoke alarms and an EICR (i.e. by 1st December 2023). Carbon monoxide detectors must be provided immediately |
| Deposits | Deposit transitional provisions mean compliant landlords will remain compliant |
Possession Notices (previously section 8 and section 21 Notices)
| New Notice | Prescribed form | Notice period | Shelf life |
|---|---|---|---|
| Section 157 Notice (Breach of contract by contract-holder)- previously section 8, grounds 12 and 14 notice | Form RHW23 | 1 month Anti-social behaviour- 0 notice period | 6 months |
| Section 173 Notice (Landlord’s notice)- previously section 21 notice | Form RHW16 | 6 months | 2 months Limitations: – Cannot be served in the first 6 months – If no possession claim is made, Landlord cannot serve a new s.173 notice for 6 months. – Landlord can withdraw s173 Notice and may serve a new one within 28 days. After that, no new one can be served for 6 months |
| Sections 181 / 187 Notice (serious rent arrears)- previously section 8, ground 8 Notice. | Form RHW20 | 14 days | 6 months |
There are other means of terminating an occupational contract either by the landlord or contract-holder. Please refer to the Act for more grounds for possession/termination and the type of notice required.
By Teni Tella
Disclaimer: The content of any article posted on this website is for general information only and shall not be deemed to be, or constitute legal advice on any general or specific matter.”