Last year, the Welsh Government announced its intention to reform possession law in Wales. It has decided to press forward with its proposals – which it consulted on last summer – in the form of the Renting Homes (Amendment) Bill. The proposals are:
- Extend the minimum notice period required under a Section 173 notice – this will replace Section 21 once the Act is commenced – from two months to six months.
- Restrict the issue of a S173 notice until six months after the date of issue of a contract (as opposed to four months as currently set out in the Act).
- Restrict the issuing of a S173 notice for six months after the expiry of a previous notice.
- Remove a landlord’s ability issue a notice, during a fixed term standard contract, to end the contract at the expiry of the fixed term (under S186).
- Restrict the use and ability to include break clauses in contracts of a certain duration.
The Bill will amend the Renting Homes (Wales) Act 2016 before it is commenced. When the Bill passes, the amended 2016 Act will come into force before the 2021 Welsh Parliament election on 1 April 2021 as the Welsh Government intends.
At what stage is the Bill at now?
The Bill has been laid by the Minister for Housing and Local Government, Julie James MS. The Bill is currently being scrutinised by the Senedd's Equality, Local Government, and Communities (ELGC) Comittee, to which the NRLA has already presented written and oral evidence. The Committee has been told to report back to the Senedd by 2 October 2020. The Senedd should also complete Stage 2 of the legislative process by 4 December 2020.
What can landlords do?
While the NRLA will continue to make the case policymakers as to why these issues are significant and why our proposals will go a long way to ameliorating these, you can write to your Members of the Senedd (Welsh Parliament) (MSs) to give your view and encourage them to support us. You will have five MSs you can write to – four regional and one constituency.
At the top of the page, you can find a template letter you can send. You can add to this reflect your own circumstances or to help with your own letter. You can also contact the NRLA Wales team via email@example.com if you have any comments or views to share.
Issues Identified by NRLA Wales
NRLA Wales has identified the following issues with the legislation as it stands:
- This Bill further represents neglect of the reasonable arguments of conscientious, compliant, and responsible private rented sector (PRS) landlords. Not only are the effects of the proposals more far-reaching then suggested in the consultation, they completely ignore the overwhelming opposition to the proposals and explanations of the issues. It is telling that 70%-90% of respondents opposed them.
- Landlords will leave the market altogether if they have less confidence in the system and ability to protect their investment. This, in turn, leads to less private rented housing, rent increases in the PRS, and more pressure on social housing waiting lists. It would also make landlords more selective about to whom they rent as they need guaranteed rental income.
- Landlords will be forced to go through the courts to take possession from anti-social tenants or those in serious arrears, while they can currently evict bad tenants in two months with no need to spend substantial sums of their money on legal fees.
- The proposals make it nearly impossible for landlords to operate in the student and young professional lettings market as the necessary annual cycle needed to function is disrupted.
- One proposal in particular means that in a worst-case scenario, where a landlord has made a slight error on the notice form (rendering it invalid), they could have to wait two years for a repossession claim to go through. This is particularly important as the 2016 Act does little to tackle anti-social behaviour.
The NRLA (then as the RLA) put our concerns to the Senedd’s ELGC Committee in March 2020 in the form of written and oral evidence. The team has also had conversations with Welsh Government officials to put its views forward.
The NRLA has put forward solutions that ensure an equitable balance is reached so that landlords can still have the necessary safeguards and flexibility necessary for them to conduct their business, all without compromising on the Welsh Government’s objective of providing 12-months’ security of tenure for tenants and a six-month notice to vacate the property. Those proposals are:
- Allow for a six-month S173 notice to be served after four months but not to take effect until immediately after the six-month moratorium ends, giving tenants more notice but the landlord flexibility to preserve the annual business cycle and reducing the chance of administrative errors.
- Allow for a S173 notice to be given within the initial period of a fixed term standard contract, but amending the minimum contract length to 12 months but allowing a six-month tenant-only break if landlord and tenant agree at the outset of the contract, allowing tenants to still have six-month tenancy agreements if both sides are happy with this.
- Ensure a legal challenge to a S173 notice by a tenant would need to be raised within 28 days of service.
- Allowing for a S173 to be withdrawn after longer than 14 days – 28 days should be sufficient.
- A properly resourced Housing Court to cope with the influx of possession cases.
- Add more mandatory grounds for eviction, including one for anti-social behaviour, to the new grounds system and give more prominence to a persistent pattern of arrears in the rent arears grounds.
- Address the issue for armed forces personnel who could be left homeless as they cannot reclaim their own property in time after receiving notice to leave service accommodation.
The Welsh Government released a summary of consultation responses in January 2020 that showed widespread opposition to the reforms, with landlords providing the vast majority of replies.
- 88% disagreed with extending minimum notice period to six months.
- 78% opposed extending the period to serve notice to six months into the tenancy.
- 73% disagreed with restricting re-issuing a notice for six months after the previous one’s expiry.
- 80% opposed removing a landlord’s ability to give notice to end a fixed-term contract.
The Renting Homes (Amendment) (Wales) Bill - here
The Bill's Explanatory Memorandum - here
The Bill's legislative progress - here
Justice System Impact Assessment - here
Equality, Local Government, and Communities Committee Report - TBA
Calum DaviesWelsh Policy & Public Affairs Officer.
Calum Davies is the Policy & Public Affairs Officer for NRLA Wales. After working in communications and research for a political party in the Welsh Parliament, Calum moved to the NRLA to promote the work of the Association to members, politicians, and stakeholders in Wales.
He ensures they are aware of landlord interests when they legislate and regulate in the PRS, helps run the Cardiff Landlord Forum, and develops policy and organises events for NRLA Wales.