Today marks 365 days since the Renting Homes (Wales) Act came into force after years of deliberation and consultation by the Welsh Government. Aisling Beevers and Clare Good from our property litigation team look at some of the main issues that the Act has caused.
The process for a Landlord to regain possession faces increased scrutiny and regulation under the Act.
As a result, the length of time it takes a Landlord to regain possession has increased. At our last check, local courts were working in 10 – 14 working day arrears just to issue the claim. Hearings were then listed 6 to 8 weeks after that. During this time, the Landlord had no options available to them in terms of removing the tenant. This means that a landlord could be left with a tenant who is in serious rental arrears, or committing Anti-Social Behaviour for over 2 months, with little other action they can take.
The introduction of the Act subjected universities to extensive housing legislation for the first time, including obliging university landlords to provide student accommodation under an occupation contract rather than a licence.
Whilst the Welsh Government has provided a number of model contracts, these simply do not work for a university setting. Our article here goes into these issues in more detail. The Act does not cover common scenarios – such as tenants moving to a different room, termly rent, student wardens, and agreements with third parties to use the accommodation over the summer.
We have assisted universities in amending the Occupation Contracts to assist in these scenarios. However, not all universities will have done this, and in any event without guidance, it is unclear how far the courts will allow landlords to include additional terms that go beyond the Act.
Since the introduction of the Act, there has been increased coverage for tenants to pursue disrepair claims against their Landlords, especially in the social housing and education sectors. In some instances, claims are being initiated before Landlords are even notified of the issues because disrepair firms have enticed the tenants with flyers telling them they will obtain damages settlements. Those firms often rack up huge costs and try and pass them on to the landlords, even where there was no notice.
The introduction of the Act means that Landlords under occupation contracts are now obliged by section 92 of the Act, as opposed to their previous obligations under section 11 of the Landlord and Tenant Act 1985.
This brought Wales in line with England, as Section 92 of the Act requires Landlords to ensure that the dwelling meets the criteria for ‘Fitness for Human Habitation’. The Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 outlined 29 standards to consider when assessing the fitness of a dwelling. Landlords must now ensure they are familiar with their new obligations under the Act to ensure they are not in breach of covenants under the Act and occupation contracts. In certain circumstances, a breach can prevent a landlord from obtaining possession where it otherwise would be entitled to.
Short-term letting has become more complicated – as Landlords seek to ensure that they are not caught by the Act accidentally.
Following the increase in remote/hybrid working, we have seen an increase in the popularity in properties that offer short-term living and/or work spaces. Whilst the idea is becoming popular, business owners should be aware that depending on the length of the stay, customers could acquire rights as tenants and may need to be governed by an occupation contract. This, in turn, places Landlords at a higher risk given the longer notice periods (a tenant could have the right to stay for at least 12 months) and the process to recover possession if necessary.
Whilst the introduction of the Act has increased protection for tenants in Wales, we have seen an increase in Landlords requiring legal advice to ensure they comply with regulations under the Act.
Anyone who has had to grapple with the Act (both landlord and tenant), will know that there are many gaps and areas that require further guidance. We are yet to see any claims make it out of the County Courts, so judicial guidance could be some way off. However, we have been working with our clients over the last year to amend the model Occupation Contract, as far as possible, to fill some of the gaps, and tweak them to suit the niche scenarios the Act is not geared up to deal with. If you rushed out your Occupation Contracts to comply with the Act, then there may be ways that we can assist you in reviewing and re-drafting those, to make them as easy to navigate as possible, and cover you in case you do have any issues with your tenants.