18 November 2014
Article by Jonathan Baxter, National Assembly for Wales Research Service
Wales will see its second major piece of housing legislation in 2015, and it’s a Bill that will affect the hundreds of thousands of people who live in a rented home – that’s about a third of the population. The Welsh Government wants to take landlord and tenant law in a different direction from England, adopting a more consumer focused approach that brings clarity to the law and ends confusion for both landlords and tenants.
Why are so many people renting their homes anyway? The lettings market is diverse and caters for all types of tenant, many of whom have made a positive choice to rent a home. Some of us will have moved to be near short-term work or to study without intending to put down roots. Others, perhaps not able to raise a deposit for a mortgage, will bide our time in a rented flat while we save. Many will simply rent because it’s convenient to our individual circumstances. Whatever our reasons for renting, whether through choice or necessity, whether we rent from our local council, a housing association or from a private landlord, we should all take a keen interest in the Renting Homes Bill.
The Bill is the culmination of a project that began over a decade ago when the Law Commission was tasked by the UK government with reviewing the law in England and Wales as it affected renting homes. Its 200 page final report, Rented Homes, was published in 2006 along with a draft Bill of over 240 sections (and 8 schedules). This lengthy document, much bigger than this year’s Housing Act, proposed to overhaul the existing law. Despite the weightiness, and generally accepted thoroughness, of the Law Commission’s work, the UK government decided (some years after it was published) not implement its recommendations. However, the Commission’s efforts have not been wasted. Although rejected in England the Commission’s work has been enthusiastically accepted by the Welsh Government, and the Renting Homes Bill will now take this project forward.
In 2013 the Law Commission published an update of its original proposals at the request of the Welsh Government. Shortly afterwards the Renting Homes White Paper, which sets out a vision for improving the arrangements for renting a home in Wales, was published by the Welsh Government. The White Paper made a number of proposals, based on the Law Commission’s work. This includes replacing most existing tenancies and licences with one of two new types of contract:
- A ‘secure contract’, based on the local authority secure tenancy, which will be used mainly for long term housing by councils and housing associations. Currently, councils and housing associations have to issue different types of tenancy so not all tenants in social housing have the same rights; and
- A ‘standard contract’, which will be similar to the current assured shorthold tenancy used mainly in the private rented sector, but without the current six-month restriction on a landlord being able to recover possession – a change which is intended to encourage short-term lets.
The new contracts should be much easier to read and understand than current ones although, ironically, they may well be longer simply because they will make crystal clear what rights and obligations both the occupier and landlord each have.
At the moment many social landlords, lawyers and letting agents will draft their own contracts. Many private landlords will buy a ready-made contract or not use a written contract at all (which isn’t illegal). This will change under Renting Homes – occupiers will have a right to a written contract and landlords will be able to use official model contracts that meet the requirements of the legislation. The Welsh Government has already consulted on the structure and layout of the documentation relating to these contracts, including an easy read version and a ‘Key Matters’ document that will set out important details such as the rent and names of all parties.
Renting Homes isn’t just about making the paperwork more accessible – it’s much more important than that. We expect it to address many of the issues that cause friction and dispute between landlords and tenants on a daily basis – issues like these:
- Anti-social behaviour: Dealing with anti-social behaviour and domestic abuse will be tackled through a standard ‘prohibited conduct’ clause in contracts;
- Grounds for possession: The grounds on which a landlord can recover possession will be reduced and simplified while still allowing landlords to deal with breaches of contract, such as non-payment of rent;
- Abandonment: Dealing with abandoned properties will become easier for landlords. Landlords currently either face taking lengthy and costly possession proceedings or risking accusations of unlawful eviction when they think in good faith that a tenant has disappeared;
- Joint tenancies: It will be easier for landlords to remove a departed joint tenant from an occupation contract, or indeed add a new one;
- Supported housing: there will be specific provision for providers of supported housing so they can manage their homes effectively and safely;
- Minors: Difficulties that the current law creates for landlords wishing to let to 16 and 17 year olds will be addressed; and
- Standards: Requiring properties to meet a basic standard of health and safety will be a standard term in all contracts.
All these changes promise to modernise and simplify an area of law that has become complex and, often to the layperson, impenetrable. We await the Bill in the New Year to find out the detail of the proposals.
I’ll be writing more blog posts about Renting Homes as it progresses through the National Assembly’s scrutiny process.