Law News

12-month contracts for tenants made mandatory by Welsh Government

Em Morley - February 12, 2020

It has been announced that 12-month contracts will become mandatory in Wales’ private rental sector (PRS), under the new Renting Homes (Amendment) (Wales) Bill.

This will mean that Welsh landlords can’t serve notice during the first six months of a new tenancy. The subsequent notice period will be extended from two months to six.

In the situation that a landlord wished to repossess their property, it will now take at least a year.

This new rule will only apply to ‘no-fault’ repossessions. Shorter notice periods will still be allowed for possession notices issued when a contract has been breached under current Section 8 rules.

RLA warning

The Residential Landlords Association (RLA) has warned that many landlords use the ‘no-fault’ repossession route when tenants are not paying rent, are making neighbours’ lives a misery or are wilfully damaging the property because the alternative is not fit for purpose.

Douglas Haig, RLA vice chair and director for Wales said: “While we acknowledge the minister has recognised the complete removal of Section 21 would be bad for the sector, we are disappointed with today’s proposals.

“It is absolutely essential that landlords with a legitimate reason to repossess their property are able to do so.

“If they do not many could opt to leave the market altogether – leaving renters with fewer options and potentially pushing rents up.

“The government says that those with grounds to repossess can still give the shorter notice period using Section 8.

“However, RLA research shows 83% of landlords who used Section 21 had done so because of rent arrears alone. Over half had experienced anti-social tenants. 

“This proves that despite having grounds to evict landlords are currently five times more likely to use the ‘no fault’ Section 21 notice, due to the lengthy court waiting times and expense associated with Section 8.

“Despite this, proposals do not include any plans to reform the grounds process, something we believe is vital before any change of this kind is made, to avoid a devastating cut to the supply of homes to rent in Wales at a time when demand continues to grow.”

When will the law change?

Following a consultation that took place last year, the new law has now been introduced before the Senedd by Minister for Housing and Local Government Julie James.

The Minister says this will provide greater security for tenants in the PRS, while still allowing landlords to take back their properties ‘in a timely manner’ where the tenant is at fault.

The Bill amends the Renting Homes (Wales) Act 2016. It is anticipated to come into force in the spring of 2021.

Announcing the change, the Housing Minister said: “The new Bill I am unveiling today will add further significant protections for those who rent their home in Wales to those already included in our landmark Renting Homes legislation.  

“These include, ensuring that a possession notice where there is no breach of contract cannot be served for the first six months of occupation, and where possession is sought, giving the contract holder six months’ notice. 

“This will provide valuable time for individuals and families faced with possession under section 173 and the organisations and agencies that support them, to find a new home that is right for them and make all necessary arrangements for a smooth transition to their new home.    

“I believe the Renting Homes (Wales) Act, as amended, will provide a sound basis for renting in Wales: balancing the needs and rights of both tenants and landlords and helping ensure our PRS is a well-managed option for households.” 

ARLA Propertymark comments

David Cox, Chief Executive of ARLA Propertymark, says: “Extending notice periods from two months to six months under the Renting Homes (Amendment) (Wales) Bill will cause further shockwaves for landlords and agents. The proposals will make it even more difficult for landlords to reclaim possession of their property and add further longevity to an already lengthy and expensive eviction process.

“We are concerned that landlords will have no viable option of evicting problem tenants quickly and efficiently due to current court procedures. If landlords sell up due to the perceived risk, this will shrink the sector and contribute to landlords being more selective about who they let their property to.

“The Welsh Assembly must reconsider extending the minimum notice period and take a long-term, holistic view that supports those who are providing professional and well-managed tenancies.”