Residential Landlords Association (RLA)
Year-long contracts to be made mandatory by the Welsh Government
Twelve-month contracts are set to become mandatory in Wales under a new law announced today.
Landlords will be unable to serve notice during the first six months of a new let under the Renting Homes (Amendment) (Wales) Bill, with the subsequent notice period extending from two to six months.
The combined effect means it will be a year before a landlord is able to repossess their property.
For a 12-month contract – standard for students and young professionals – the period will increase to 18 months.
The new rule will only affect so-called ‘no fault’ repossessions, where a landlord needs to take their property back, for example if they need to move into it themselves or sell it.
Landlords will still be able to issue a possession notice with a shorter notice period if the contract has been breached under current Section 8 rules.
However, the RLA has warned that many landlords whose tenants are not paying the rent, are making neighbours lives a misery or wilfully damaging the property use the ‘no-fault’ repossession route as 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.”
What happens next?
The new law will be introduced before the Senedd today by Minister for Housing and Local Government, Julie James, following a consultation last year.
She says it will provide greater security for people who rent their home, particularly those 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, and should it be passed by Members of the Senedd, it is anticipated the new law will 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.”
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