Year-long tenancies are set to become mandatory in Wales under a new law announced this week.
The Renting Homes (Amendment) (Wales) Bill will guarantee a minimum of 12 months’ protection against eviction at the start of a new tenancy, provided contract terms aren’t breached.
If the bill is passed, landlords will be unable to serve notice during the first six months of a new let. And the subsequent notice period will be extended from two to six months.
This means it will be one year before a landlord is able to repossess a property under the Welsh equivalent of a Section 21 ‘no-fault’ eviction. Shorter notice periods will still be permitted where the tenant is in breach of their contract under Section 8.
Unlike in England, the Welsh Assembly has previously agreed not to abolish Section 21 legislation.
Instead the proposed amendment to the Renting Homes (Wales) Act 2016, which has yet to be implemented, is aimed at providing “greater security for people who rent their homes in Wales”.
Julie James, minister for housing and local government, said: “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 private rented sector is a well-managed option for households.”
She added: “This will provide valuable time for individuals and families faced with possession under section 173 [the equivalent of Section 21 for periodic tenancies], 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.“
Despite reassurances from the minister that landlords will still be able to take back their properties “in a timely manner”, concerns have already been raised by the industry.
Douglas Haig, Residential Landlords Association 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.”
David Cox, chief executive of landlords’ professional body ARLA Propertymark, describes extending notice periods to six months as “absurd”.
He explained: “It means that landlords will have to wait half a year before they can start court proceedings which then takes an average of 22 weeks before the tenant is actually evicted.
“Therefore, this means that tenants could build up almost a year in rent arrears before a repossession order is enforced, potentially causing landlords to be repossessed by their mortgage lender.
“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.”
The Proposals in Brief
The Welsh Assembly are proposing the following:
Extending the minimum notice period of a Section 173 notice from two months to six
Extending the period from when a Section 173 notice can be issued from four months to six
Limiting Section 173 from being issued again for six months following expiry
Abolishing no-fault evictions for fixed-term tenancies by removing the Section 186 notice
Removing landlords’ use of a break clause during a fixed term contract
Limiting landlords from issuing another Section 173 notice for six months when the previous was issued in retaliation
Limiting the issuing of notices where landlords haven’t complied with relevant legislation
The Next Steps
The Bill was introduced on February 10th 2020 and considered by the Equality, Local Government and Communities Committee two days later. Oral evidence sessions are scheduled to start from February 27th.
If the Renting Homes (Amendment) Bill is passed by the Senedd, it is expected to become law in spring 2021.
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