“If this goes on I shall be in the workhouse,” writes Mog Edwards to Myfanwy Price, in the love letter intended only for her, but steamed open and read by Willy Nilly the postman in Llareggub, Dylan Thomas’s fictional Welsh village in Under Milk Wood.
While Welsh workhouses are thankfully in the past, substandard accommodation and poor tenancy protection are not. But that is set to change in Wales, following the grant of Royal Assent to the Renting Homes (Wales) Act 2016 (“the 2016 Act”). Familiar with it? You should be, even if you have no connection with the principality; for where Wales leads in this respect, we may reasonably expect legislative action elsewhere in due course.
Welsh powers
The UK parliament remains sovereign in relation to all UK law and can still legislate, in theory and in fact, in all areas relating to Wales. By convention, however, it does not legislate for matters which have been devolved to the National Assembly for Wales or Welsh Ministers without first obtaining the consent of the Assembly. One such matter is housing, which was devolved by the Government of Wales Act 2006. Since 5 May 2011, the Assembly has been able to consider Assembly bills in this area.
And it has indeed been busy in the area of housing and regeneration, passing, in relation to dwellings in Wales, the Housing (Wales) Act 2014 (which, among other things, requires local authorities to ensure that their housing stock meets a specified standard by 2020; imposes more extensive duties on local authorities to take steps to prevent and relieve homelessness; and requires all landlords in the private rented sector to be registered and suitably trained as “fit and proper”); the Mobile Homes (Wales) Act 2013 (designed to help improve regulation of the industry); and now the 2016 Act.
Renting Welsh homes
In his Access to Justice – Final Report published in July 1996, Lord Woolf said that the time had come for “root and branch reform of housing law”. Spurred on by this, the Law Commission set out proposals for reform in its 2006 Renting Homes: Final Report. Save in minor respects, the UK government has not implemented the proposals, but the Welsh Assembly has. The 2016 Act makes important changes to the residential letting landscape.
The Law Commission had identified a number of problems in this sector (numbering over one million people in Wales alone), arising from the multitude of licence and tenancy contracts in existence: oral, protected, statutory, assured, assured shorthold, introductory and demoted, depending on whether the landlord is private, local authority or housing association.
With some exceptions (absolute exceptions such as Rent Act tenancies, agricultural tenancies, long tenancies, night shelter accommodation; and qualified exceptions that the landlord may elect to put on the new basis, such as holiday lets, care home accommodation, barracks accommodation, temporary contracts provided as a temporary expedient in relation to a trespasser; and accommodation shared with the landlord), the 2016 Act replaces all existing licence and tenancy models with one single legal framework for renting a home: the occupation contract. There are to be two types of these: the secure contract, which will be similar to the current local authority secure tenancy; and the standard contract, which will be similar to the current assured shorthold tenancy, and which may be periodic (week-to-week or month-to-month) or fixed-term.
With some exceptions, local authorities and housing associations will only be able to grant secure contracts, which, as the name suggests, will convey substantial security of tenure. Private landlords may grant standard contracts, with reduced security – although they may also grant secure contracts, if so inclined. The distinction between licences and tenancies will become academic, and all occupation contracts (save for limited exceptions) will have to be in writing.
Once fully in force, the 2016 Act will require landlords to issue a written statement of the occupation contract which clearly sets out the rights and responsibilities of landlords and contract-holders. To help landlords comply with this requirement, the Welsh Assembly will provide free model contracts.
The detail
Each occupation contract will comprise four elements:
(i) key matters (property, effective date of the contract, the amount of rent; and the rental period);
(ii) fundamental terms (the primary rights and responsibilities under the contract, some of which may be left out or changed by agreement, but only where this benefits the contract-holder);
(iii) supplementary terms (further rights and responsibilities to be detailed in regulations to be made by the Welsh ministers, such as the obligation to pay council tax and utility bills, which may be negotiated between the parties); and
(iv) additional terms, to cover individual matters of detail, to be agreed between the parties.
The advantages of the new system are evident: tenants will benefit from the requirement that their occupation contracts must be in writing; landlords will benefit from other features of the 2016 Act, such as an entitlement to repossess an abandoned property without needing a court order, enabling the property to be re-let more quickly. Landlords may also thank their lucky stars that the Assembly resisted the calls for rent controls. Both parties are likely to profit from the greater simplicity and consistency that will accompany the requirement that the occupation contract terms will be drawn either from the 2016 Act or from regulations made pursuant to it.
To be sure, the many exceptions that have been crafted for specific circumstances will retain some of the complexity of the current regime. For those in the mainstream, however – landlords, contract-holders, administrators, lawyers and the courts – the change is likely to be welcome. And the Welsh may congratulate themselves for their rare bit of leading where, one day, their bigger neighbour is likely to follow.
Guy Fetherstonhaugh QC is a barrister at Falcon Chambers
