Wales update: what landlords need to know this week
Now that the deadline has passed to issue the written statements for the converted contracts, landlords in Wales may have hoped that they could have a little bit of a breather for a few months.
Unfortunately, that’s not the case just yet.
The Welsh Government has released a consultation exploring rent controls in Wales which landlords should respond to. In addition, if your contract-holders moved in before 1 December 2022 you may have to issue an update to their current contract terms by Tuesday 13th June.
Renting Homes (Wales) Updates
Under the Renting Homes (Wales) Act, whenever the terms of a contract are changed, the landlord has to inform the contract-holder of the changes in writing within 14 days. This can be done by providing an updated written statement, or via a statement of variation setting out the changes. Failure to do so can mean the contract-holder can seek penalties.
This requirement is usually going to be triggered when you and the contract-holder agree to vary the terms. However, because many of the terms of an occupation contract are defined by law, it can also happen when the Welsh Government changes one of the terms via legislation (a variation by enactment).
One of these variations by enactment happened on June 1st when the Renting Homes (Wales) Act 2016 (Amendment of Schedule 12) Regulations 2023 came into force.
These regulations made a number of clarifications on when a written statement must be served for a converted contract and any ‘substitute’ contracts which replace the original converted contract.
What you need to do next
Where your contract-holders moved in before 1 December 2022, the Welsh Government has published guidance on what you need to do now. In brief though -
- You should have issued the written statement of your original converted contract by May 31st 2023. If you haven't done so already you must do this as soon as possible. If you are serving the written statement late, the NRLA has updated its converted contract templates with the latest changes so you will not need to serve an additional statement of variation.
- If you are still on the original converted contract and no contract-holders have changed, then the Welsh Government thinks you don’t have to provide anything further. However, you can issue a statement of variation for safety.
- If one of the contract-holders changed between 1st December and May 31st you need to give the replacement contract-holder a written statement by June 13th. You should also send a statement of variation to the other contract-holders in the house explaining the term that has changed. A sample statement of variation is available here for people who used the NRLA templates or followed the Welsh Government guidance.
- If your original converted contract has ended, for example by a renewal or the fixed term ending, you will have a substitute contract. You need to give your contract-holders a written statement of this substitute contract and a copy of the RHW2 form to the contract-holders by June 13th.
- If you issued a written statement for that replacement contract between December 1st and May 31st you don’t have to give the written statement again. You will have to provide a statement of variation by June 13 though. If you renewed using the NRLA contract you can get the statement of variation here. Alternatively contact the supplier of your contract for a statement of variation.
Please note that you do not have to do anything if your contract-holders moved in on or after December 1st 2022.
Finally, if you enter into a substitute contract after May 31st you must provide the written statement within 14 days of the start of the contract. Similarly, if a contract-holder changes after this date, you must provide them with a written statement within 14 days of that change.
Given this, and the expiry of shorter notice periods, this means that if you are renewing a converted contract after May 31st you can use a standard template such as the NRLA one without needing to make any amendments. Given the ongoing concerns about correctly converting a contract, landlords may want to renew unless they are currently going through the eviction process.
Rent controls in consideration in Wales
The Welsh Government is seeking your opinion on potential forms of rent control and adequate housing in Wales. The consultation closes on September 15th.
The consultation sets out a number of potential options for rent controls including following Scotland's example.
This is a green paper which means the government is not committed to introducing rent controls, only to exploring them. With that in mind we would strongly recommend landlords respond to this consultation directly with their opinions on how it would impact on their future investment choices before it becomes concrete policy.
In addition, as this is not policy yet, if it does some come in, it is likely to be years away so landlords have plenty of time to consider their options.
The NRLA will be responding to this consultation as well and we will be arguing that rent controls would be a disaster for the supply of homes in Wales. Particularly given landlords are still struggling with the implementation of Renting Homes (Wales). We are keen to hear from landlords and agents who want to provide case studies to add to our consultation response.
If you do wish to respond to the consultation, you can do so here.
