The Welsh Government have released a white paper Renting Homes A better way for Wales which describes proposals for new legislation that they intend to implement.

Current arrangements

According to the white paper:

Many of the problems are due to inconsistencies in the underpinning law and some of the practices that exist around the law. By removing unnecessary differences between tenancy types, we aim to create a more effective and joined-up rented housing sector. This is especially important as the number of households renting continues to grow.

The white paper lists the many different types of tenancy including secure, demoted, introductory, assured and assured shorthold tenancies and then goes onto list the many alternative types of tenancy for example long leases, mobile homes, holiday lettings, rents over £100k per annum etc.

According to the white paper,

the legal framework underpinning tenancies is extremely complicated. This causes problems for tenants and for landlords. Legal opinion and action is often needed to resolve problems, with significant associated costs. Those whom the law is designed to protect – tenants and landlords – are not always able to benefit from that protection, while those whose behaviour is sought to be regulated are not influenced by what they cannot understand. Many disputes over rental contracts arise out of ignorance of the law. Significant time and money is spent drawing up contracts or resolving problems.

It should be noted that almost all the examples of the alternative tenancies mentioned could not be changed because as the paper points out – “not all would fall within the scope of our proposals as they are not residential or are covered by other statutory schemes[1]

What’s being proposed?

In summary, the white paper is making proposals based on the legal framework developed by the Law Commission [2], which has two types of contract. According to the white paper, these proposals

… will not fundamentally alter the balance of rights and responsibilities of tenants and landlords from those that currently exist. They are designed to create a simpler, more logical and clearer legal framework to replace the complexity of current law. Our goal is a fair, simple, and effective legal basis for renting a home, making it understandable to both landlords and people who rent their home now or in the future.

The core proposals affecting landlords

The white paper provides a number of proposals outlined below:

Removing confusion over the lease/licence distinction.

Current law has been proven to present difficulties to landlords. Frequently, some have believed that they were giving a licence to occupy accommodation whereas, because the nature of the occupation fulfilled certain conditions, the courts have deemed it was in fact a lease that applied, with far greater tenancy rights resulting. Our proposals will remove this common area of misunderstanding for landlords.

Reduced costs through reduced complexity.

The simpler, more transparent legal framework we propose will, over time, reduce costs to landlords. We believe these reductions will result from two things. First, by avoiding the cost of drawing up bespoke rental contracts and seeking legal advice to confirm compliance of those contracts with current law. Second, greater clarity of rights and responsibilities should reduce the incidence of disputes that incur legal costs. Including all important information in the model contract will enable landlords to understand and follow the correct procedures and reduce the risk of legal challenge.

Dealing with abandonment.

Unfortunately, on occasions, tenants abandon their home without notice, leaving the landlord in a very difficult situation. At present, landlords have to go to court to regain possession of the property. Our proposals will make it easier for the landlord to regain possession while at the same time balancing the interests of the tenant. The landlord will be able to secure the premises and give four weeks’ notice of their intention to end the tenancy without having to seek a court order to do so.

Enabling landlords to remove a departed joint tenant from the tenancy.

Landlords will be able to remove a joint tenant from the tenancy if they believe the individual no longer lives there. Again, as with abandonment, it would be subject to four weeks’ notice, but it should provide a sensible solution to some of the problems illustrated above.

Providing landlords with certainty regarding contract terms.

Our proposals provide for the setting out of certain contractual terms within the proposed Bill. This means that, providing landlords adhere to those terms, they will be in compliance with the law and will not be subject to challenge under the Unfair Terms in Consumer Contracts Regulations 1999. Previously, such challenges have caused significant confusion and uncertainty so we believe landlords will welcome the clarity our proposals will bring.

Requiring landlords to issue written contracts.

While most landlords issue written contracts, not all do. We believe that having clarity on the rights and responsibilities of both tenants and landlords is key to successful renting. Landlords will therefore be required to issue a written contract within two weeks of the start of occupation. The statutory model contracts we will provide will assist greatly with this. Failure to comply could lead to the landlord being required to compensate the tenant. The amount of compensation is a payment equivalent to each day’s rent, starting from the date of occupation until the date the written contract is provided (subject to a maximum equivalent to two months’ rent).

Ensuring no serious health and safety hazards are present.

All landlords will be required, as a condition of the rental contract, to ensure that there are no Category 1 health and safety hazards in the property, as defined under the Housing Health and Safety Rating System. This complements the current duty that local authorities to take action when they identify properties with a Category 1 hazard. Examples of Category 1 hazards include excess cold, damp and mould growth, carbon monoxide and fire risks.

Anti-social behaviour

It is proposed that both the ‘standard contract’ and ‘secure contract’ would contain a ‘prohibited conduct clause’ [3]

This clause prohibits the tenant from using or threatening to use violence against a person lawfully living in the premises, or do anything which creates a risk of significant harm to such a person. In addition, the tenant may not use or threaten to use the premises, or any common parts that they are entitled to use under the contract, for criminal purposes.

Renting by young people

The Renting Homes proposals would treat 16 and 17 year olds in exactly the same way as those 18 and above, and treating each tenant on an individual basis.

Comment

Overall, we have no major objections to most of the proposals. Indeed, we are fully behind the proposals to abolish the current rule which prevents the court from ordering possession within the first six months of the tenancy under ‘no fault’ procedures and improving the current problems with abandonment.

Obviously we will need to see in more detail the proposed clauses contained within the standard contract but in principle, we have no objection to this as long as the contract is fair for all parties. To the best of our knowledge, landlords won’t be forced to use the wording contained in the standard contract but if they do so, all the terms will be regarded as ‘fair’ for the purposes of the the Unfair Terms in Consumer Contracts Regulations 1999. As long as any contract used contains terms that are not contrary to those regulations, then it seems even under these proposals that will be fine. From recollection, the first draft of a standard contract looked ok so that may work out fine in any event.

The paper claims that costs will be reduced “… by avoiding the cost of drawing up bespoke rental contracts and seeking legal advice to confirm compliance of those contracts with current law …” but it is submitted this is not really very accurate in the modern day of the internet. A quick search in Google, give away a bit of personal data and your email and hey presto tenancy agreements are available. Any landlords association will always be able to guide landlords towards the appropriate tenancy needed and as the paper itself admits, “not all would fall within … our proposals as they are not residential or are covered by other statutory schemes” so in reality the position wouldn’t change that significantly.

As for the other proposals I fear they may find more problems than they anticipate.

For example, the proposals claim to make it easier to rent to 16 or 17 year olds which we have no objection to in principle but presumably they would need to amend or revoke section 1(6) Law of Property Act 1925 which prohibits an infant from holding an estate in land. I doubt the Welsh Government has powers to amend or revoke this part of the Act but even if they did, I’m not entirely sure how the other complex legal matters could be dealt with. [4]

Also, the proposals will require a written contract. Again, in theory this would be nice but there aren’t many landlords who will let a property without a written tenancy through choice. There was probably some situation that occurred leading to the verbal tenancy arising (such as a joint tenant moving out of a property without consent originally but then accepted by the landlord over time).

Again we have no objection to the principle of allowing one joint tenant to give notice and vacate a property without bringing the entire tenancy to an end but we will need to see how this will work in detail. We will need to see whether the landlord will have power to refuse because in most cases the one that leaves will be the good tenant who manages the finances and looks after the place. In these cases, landlords wouldn’t want the single tenant to remain on their own.

I think the most worrying part of the proposals is that it will be an offence to let a property with a category 1 hazard. Again the idea is nice but in the real world it’s simply unworkable in our view. Frankly, you could take the best house available and the local authority will find a category 1 hazard! After-all, most local authorities still hold the belief that most “average” houses in England and Wales actually has the category 1 hazard of excess cold (because that’s what the statutory guidance states [5]). Of course, the guidance is only referring to houses without any heating or insulation. [6]It’s worth remembering that the statutory guidance states:

… for these statistics it has been assumed that no cold-related deaths occur in dwellings which achieve 18°C hall temperature when the external temperature falls to 5°C.

And continues …

A healthy indoor temperature is around 21°C, although cold is not generally perceived until the temperature drops below 18°C. A small risk of adverse health effects begins once the temperature falls below 19°C. Serious health risks occur below 16°C with a substantially increased risk of respiratory and cardiovascular conditions. Below 10°C the risk of hypothermia becomes appreciable, especially for the elderly. [7]

We’ve even had a local authority require an individual boiler in every single shared room in a shared house because of the words “… Such systems should be operated to ensure that occupants are not exposed to cold indoor temperatures and should be provided with controls to allow the occupants to regulate the temperature within their dwelling.”! (The local authority backed down before we reached the tribunal!)

Only today one of our members has had a notice served by a local authority seeking that the gas central heating which has “ceased due to the gas being turned off” be reinstated. In fact, there has been no gas at this property since purchase in 1996!

The problem with the HHSRS is that it is massively complex and very few local authorities or people for that matter understand the extremely complicated calculations involved in determining the category of a hazard.

I doubt that proposal will see the legislative stage if I’m honest but who knows!

What is the timetable for the proposals?

20 May 2013 – Publication of White Paper on Renting Homes

May to August 2013 – Public consultation on proposals

16 August 2013 – Consultation period ends

Autumn 2013 – Analysis of responses

Winter 2013 – Summary of consultation responses published

2014 – Further development of proposals and engagement with stakeholders

2015 – Renting Homes Bill introduced into the National Assembly for Wales*

2015 – Scrutiny of the Bill by the National Assembly* [8]

*precise timings subject to the Assembly’s timetable

Responding to the consultation

At the back of the white paper, there is a useful form for responding which must be done by 16 August 2013 or see the main webpage containing the links to the papers

Summary

To summarise, except the minor points raised above, there is nothing drastically wrong with the proposals and in the most they would be a good thing. However, it seems to me that in reality, nothing much will change. Instead of an assured shorthold tenancy we would have a standard contract.

If I’m honest, I think one of the opening statements in the paper provides a clue as to the real reasoning behind these proposals:

The National Assembly’s ability to make primary legislation, which was extended as a result of the referendum in 2011, gives the Welsh Government the opportunity to do even more to help people to meet their housing needs.

It is respectfully submitted this is more about the ability to make a change and showing the world that they can rather than any true fundamental sweeping changes to the legislation.

I accept what we currently have isn’t perfect but I don’t think the Welsh Government have really outlined the main problems like for example the fact that it easily takes 3 to 4 months to evict a tenant who is not paying rent! Nothing in the proposals makes any changes to these types of ‘real’ problems.

In addition, the paper suggests that currently there is unnecessary anxiety for people renting homes because “people living next door to one another in very similar situations [have] quite different terms in their rental contracts”, and “many people see big differences between renting their home from a local authority, a housing association or a private landlord”. [9] I don’t recall any tenant coming to me in an anxious manner because of the terms of his neighbours tenancy or because he is anxious about moving from local authority to housing association to private rented sector.

I just feel that the problems being described aren’t as real or as big as suggested in the paper, nor do I feel the changes will make huge differences to the current position. At least with the proposals concerning licensing and accreditation of landlords and agents, a real problem was identified and a bold solution suggested (whether you agree with it or not, nobody can disagree that the changes proposed are significant). With this white paper it just feels like a lot of work for little gain.


  1. See paragraph 3.10 of the white paper
  2. Renting Homes in Wales – Report by the Law Commission
  3. See para 6.18 of the white paper
  4. See for example this article by the nearlylegal blog
  5. See the table in section 2 – hazard profiles of the statutory guidance, page 59
  6. See the commentary in particular para 29.1.3 onwards in Thompson (for the Irene Thompson Trust) v Newcastle under Lyme Borough Council BIR/41UE/HIN/2008/0006 15 October 2008
  7. Paragraph 2.04 − 2.05.
  8. Appendix 1 white paper
  9. Paragraph 2.4

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