Renting Homes (Wales) Act - How will it Impact Landlords?

A revolutionary housing law aiming to change the paradigm of the private rental sector came into force in Wales on December 1, 2022. The Renting Homes (Wales) Act 2016 will significantly enhance the parameters of renting, managing, and living in rental homes in Wales. The newly enacted law provides a unified legal framework that will replace case law and current legislation to simplify and streamline the renting process for tenants and landlords. The act applies to the social and private rented sectors and aims to reform how tenants and landlords rent and let homes. The changes will impact the way landlords maintain properties in addition to creating and executing contracts.

Implications for landlords

The law will replace the tenancy agreement with occupation contracts from December 1, 2022. Landlords will have 14 days to provide an occupation contract to tenants if the contract date is on or after December 1, 2022. There can be legal consequences, including the inability to serve notice, if the landlord cannot provide an occupation contract. The revised No-Fault notice will replace Section 21. Landlords will have to allow six months for tenants to move out per the No-Fault notice. They cannot issue a notice requiring tenants to move out until six months from the start of the occupation contract. Therefore by implication tenants will get the security of 12 months from the beginning of a tenancy.

The landlord must that their property is fit for human habitation. The law includes 29 parameters determining the property's fitness, such as:

Routine electrical safety testing

Installation of smoke and CO alarms.

Maintaining gas, electricity, and water supply in working condition

Keep the property's structure and exterior in proper condition

The changes aim to provide safer homes and protect tenants from eviction. The law also provides that Landlords can repossess abandoned properties with better clarity of their legal rights. There will be enhanced transparency about succession rights if the existing tenant (contract holder) dies. Joint tenants can leave the property without ending the current contract or creating a new one.

Extension of notice periods

There was a consultation in September to find out the opinions of landlords about notice period extensions. Over 90 percent of landlords and letting agents opposed the move to extend the notice period to six months for existing tenancies. The government ignored the sentiments of most landlords. It claimed that the benefits to individuals and society are more meaningful than the negative impact of extending the notice period for landlords.

Impact on the confidence of landlords

Landlords have a crucial role as housing providers, and the government should have a sympathetic approach to them instead of strengthening tenants' rights.

The reinforcement of tenants' rights will negatively impact landlord confidence despite their flexible attitude toward tenants during the pandemic crisis. The notice period extension was meant to be a temporary change, but the government is desperate to make it permanent. There is an urgent need to implement policies to improve the housing supply. However, it is widely expected that the Renting Homes Act will cause a drop in private rental properties, as many landlords will exit the private renting sector.

The rental reforms may abolish section 21 notices as the government wants to move ahead with the move. There is a possibility that the central government will introduce similar changes across the UK. Scotland has already replaced Assured Shorthold Tenancies with Private Residential Tenancy, which is identical to the Renting Homes Act as it ensures more protection for tenants.