Renting Homes implications and next steps
Simon White
Housing Policy Division
Welsh Government
rentinghomes@wales.gsi.gov.uk
www.wales.gov.uk/rentinghomes
What I’m going to cover :
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Overview
Research informing the current picture
Key findings
Examples of practical problems
Calls for reform
Renting Homes White Paper
Two contracts for renting a home
How will tenants and landlords be affected
Fundamental, supplementary and additional terms
Implementation
Overview:
• The Welsh Government's Renting Homes White Paper
consultation ended on 16th August, we proposed better
arrangements for renting a home in Wales.
• The Welsh Government aims to achieve: ‘a flexible, efficient
and responsive housing system that helps people to meet
their housing needs’
• Based on a simpler legal framework developed by the Law
Commission, our proposals suggest introducing two contract
types.
• We need to better understand what tenants want from their
tenancy agreement and would appreciate your feedback on
the contract developed by the Law Commission.
Research informing the
current picture:
• In 2012, Consumer Focus Wales asked tenants and
landlords about making changes to arrangements for renting
a home.
• While the research focused on renting from private
landlords, many of the findings are also relevant to people
who rent from local authorities or housing associations.
• The research captured the views of a wide range of tenants,
letting agents and private landlords. It also considered other
research that has been undertaken on this subject.
Research informing the
current picture:
The tenants included:
(i)
(ii)
(iii)
(iv)
People on low income or who were unemployed
Lone parents
Older people
People from black and ethnic minority groups, and
refugees
(v) High income earners
(vi) Students
(vii) Families with children
(viii) Young professionals
Key Findings
• Tenants often don’t understand their rental contract.
• Tenants felt they did not have sufficient time to read the
contract before signing, often because it was too long or
difficult to understand.
• Tenants often have clauses included in their tenancy
agreements that are unfair.
• The research found either tenants’ contracts were too
basic or too long (up to 100 pages).
Examples of practical problems
with current tenancy law:
• Difficulties in establishing what tenancy exists between a
tenant and their landlord
• Tenancy agreements are difficult to understand - lack of
clarity on rights and responsibilities leads to disputes
• Confusion surrounding licences and tenancies
• Abandonment & absent joint tenants
• Domestic abuse and relationship breakdown under joint
tenancies
• Renting by 16 and 17 year olds
Calls for reform:
• There have been strong legal arguments for housing law
reform (Lord Chief Justice Woolf – Access to Justice; Lord
Justice Jackson – Review of Civil Litigation Costs). They
emphasise the immense complexity of current housing laws.
• Nick Madge, Circuit Judge said: “Housing law has become
an impenetrable forest. […] There are few paths through the
forest, known only to the most skilful lawyers
Reform elsewhere in the UK:
• Scotland and Northern Ireland - require all tenancies to be
underpinned by a written tenancy agreement
So what’s proposed for Wales…
Renting Homes White Paper:
• Based on Law Commission’s 2006 ‘Renting Homes’ report
• Single legal framework for social and private renting
• Clarity on rights and responsibilities through written contracts
– with model contracts in plain language freely available to all
• A clearer legal framework will reduce disputes and potential
litigation.
• Based on two model contracts
Two contracts for renting a home:
Secure Contract:
• high level of security protected by law
• replaces Secure and Assured Tenancies
• can also be issued by private landlords (~ 1 in 10 of
current private rentals are Assured)
Standard Contract:
• low level of security protected by law
• greater security can be agreed through fixed terms (as at
present)
• replaces Assured Shorthold, Introductory and Demoted
Tenancies
• provides greater flexibility for short-term renting
How would tenants & landlords be affected?
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Easy to understand model contracts - freely available
Clarity on addressing anti-social behaviour
Deals with domestic abuse by targeting the perpetrator
More flexibility around joint tenancies
Easier renting for 16 and 17 year olds
Requirement for landlords to maintain the property and
ensure no serious hazards are present
Model contracts freely available that include all relevant law
Provide legal certainty regarding contract terms
Require a written contract to be issued, with a penalty if not
Requirement for landlords to maintain the property and
ensure no serious hazards are present
Easier arrangements for short-term renting
Reduced costs through reduced complexity
Fundamental, Supplementary &
Additional Terms
The contract contains different types of terms.
Whether a term may be left out or changed depends
on which type it is. To make the contract easier to
understand, symbols are used for the different types
of terms:
• a fundamental term which cannot be left out
of the contract or changed
• a fundamental term which can be left out of
this contract or changed, but only if that gives
you greater protection than you are entitled to
under Renting Homes
• a supplementary term which can be left out of
this contract or changed
Fundamental, Supplementary and
Additional Terms:
• All rental contracts will contain certain ‘fundamental’ and
‘supplementary’ terms set out by Welsh Government in
primary and subordinate legislation
• These will include matters such as the landlord’s
repairing obligations, the circumstances under which the
contract may be ended, and actions which constitute
unacceptable behaviour on the part of the tenant
Fundamental, Supplementary and
Additional Terms:
• As well as fundamental and supplementary terms,
landlords and tenants will be able to include additional
terms in the rental contract
• These terms, which may include matters such as
whether pets are allowed in the property, can be
individually negotiated between landlord and tenant
• As now, additional terms should comply with the Unfair
Terms in Consumer Contracts Regulations 1999
Implementation
• Model contracts freely available in advance to help prepare
• All existing tenancies would automatically convert to the
appropriate new contract on a set date – arrears transfer too
• New contracts could then be issued at suitable point, e.g. in
private sector when one tenancy ends and another starts
• Continued engagement with stakeholders to minimise
administrative burden
• Guidance for landlords and tenants to assist in the change
• Proposed to include Housing Association Rent Act tenancies,
but not private ones
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Long timescale to enable full stakeholder engagement
Further consultation on model contracts
Draft Bill considered by Assembly in 2015
New scheme operational in 2016?
Thank you – any questions?
Simon White
Housing Policy Division
Welsh Government
rentinghomes@wales.gsi.gov.uk
www.wales.gov.uk/rentinghomes
All-Wales ‘Prohibited Conduct’ term:
• A contract-holder [tenant] may not use or threaten 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.
• A contract-holder may not engage or threaten to engage in
conduct that is capable of causing nuisance or annoyance to:
- a person living in the locality of the premises; or
- a person engaged in lawful activity in, or in the locality of,
the premises.
• A contract-holder 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.
• The contract-holder may not allow, incite or encourage others
who are residing in or visiting the premises to act in these
ways or allow, incite or encourage any person to act as
mentioned above.
All-Wales ‘Prohibited Conduct’ term:
• Complements separate proposals on ending violence against
women and domestic abuse by enabling eviction of the
perpetrator, and the victim (and family) to remain in the home
• Wording needs to be understandable but also broad enough
to cover all potential forms of anti-social behaviour
• Guidance, DVDs etc can explain further with examples
• Breaching the term could lead to eviction - proceedings could
start on same day as landlord gives the possession notice.
• Landlords can apply for an injunction against breach
• Social landlords and charities can also apply for an exclusion
order, to which a power of arrest can be attached
• Social landlords can also apply for a court order to demote a
tenant from a secure contract to a standard contract
• Civil standard of proof and tightly structured discretion to
consider proportionality re human rights and equality law
Section 21 Equivalent ‘no-fault’
possession ground:
• As now, landlords will be able to terminate a standard
contract by issuing a possession notice
• The notice period will be 2 months from the date on
which the notice is issued (not linked to the rental period)
• Currently, 7/10 Section 21 notices thrown out of court for
being wrong (Chairman of the London Association of
District Judges)