1. Renting Homes A better way for Wales

2. Croeso Welcome Jon Roche Housing Policy Division Welsh Government rentinghomes@wales.gsi.gov.uk www.wales.gov.uk/rentinghomes

3. Overview: The Welsh Government’s aim: ‘a flexible, efficient and responsive housing system that helps people to meet their housing needs’ What I’m going to cover: The current picture Examples of practical problems Renting Homes White Paper How would tenants be affected? How would landlords be affected? Specific aspects of the proposals Responding to the consultation

4. The current picture: Almost 1 in 3 households rent from a social or private landlord, with the fastest growth in private renting Tenants are less happy with their life than owner-occupiers Renting often seen as the last option Two types of renting – long-term secure and shorter term… BUT many different tenancies - Secure, Demoted, Introductory, Assured, Assured Shorthold, Family Intervention, Rent Act … and many non-statutory ones besides! This unnecessary complexity causes problems…

5. Examples of practical problems with current tenancy law: Difficulties in establishing what type of tenancy exists between a tenant and their landlord Tenancy agreements difficult to understand - lack of clarity on rights and responsibilities leads to disputes Confusion surrounding licences and tenancies Absent joint tenants Domestic abuse and relationship breakdown under joint tenancies Renting by 16 and 17 year olds

6. Renting Homes White Paper: Based on Law Commission’s 2006 ‘Renting Homes’ report Single legal framework for social and private renting Enables ‘single social tenancy’ for Wales Clarity on rights and responsibilities through written contracts – with model contracts in plain language freely available to all  Secure contract based on Local Authority secure tenancy  Standard contract similar to assured shorthold tenancy Improved framework for supported housing

7. 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 Specific aspects of the proposals…

8. ‘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

9. Certain terms may be varied or left out of the contract altogether if landlord and tenant agree to the omission or variation In some cases an omission or variation will only be allowed if it provides the tenant with a greater degree of protection: e.g. a fundamental term requiring the landlord to give the tenant at least 24 hours notice when they wish to enter the premises could be increased to 48 hours notice, but not decreased to 12 hours notice ‘Fundamental’, ‘Supplementary’ and ‘Additional’ Terms:

10. 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 ‘Fundamental’, ‘Supplementary’ and ‘Additional’ Terms:

11. 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)

12. 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.

13. More flexibility around joint tenancies: Current law is unhelpfully rigid and often puts people in a vulnerable position Renting Homes treats each joint tenant as an individual Enables joint tenants to leave without ending tenancy for all Remaining tenants responsible for whole of rent… BUT Notice period applies for remaining tenants to find new tenant Allows termination by the landlord or remaining tenant where a joint-tenant is no longer resident – without a court order Enables a landlord to recover an abandoned property, again without a court order

14. Removing the six-month moratorium on ‘no fault’ possession orders: Currently, a court is unable to issue a no fault possession order in the first six months of an assured shorthold tenancy Most new lets are fixed for 6/12 months (where no fault possession does not apply) so removal will have less impact than might first appear - Landlords prefer fixed terms to guarantee income and avoid re-letting costs Only 9% of tenancies ended by the landlord Removal will allow the maximum number of tenancies to benefit from the new framework (those outside of current statutory schemes have least protection) Landlords unlikely to seek possession immediately after tenancy granted and 1 or 2 months’ rent paid – so little chance of possession before 6 months anyway Will benefit tenants looking only for a short-term let

15. How would landlords be affected? Easy to understand written contracts setting out rights and responsibilities Better addresses anti-social behaviour of some households Remove confusion on lease/licence distinction Recover abandoned properties without a court order Easily remove a joint tenant who is no longer resident 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 Contractual responsibility to maintain the property and ensure no serious hazards are present Easier arrangements for short-term renting Reduced costs through reduced complexity

16. How would tenants be affected? Easy to understand written contracts setting out rights and responsibilities Better addresses anti-social behaviour of some households Deals with domestic abuse by targeting the perpetrator More flexibility around joint tenancies Easier renting for 16 and 17 year olds Easier arrangements for short-term renting Requirement for landlords to maintain the property and ensure no serious hazards are present

17. 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 Long timescale to enable full stakeholder engagement Further consultation on model contracts Draft Bill considered by Assembly in 2015 New scheme operational in 2016?

18. Responding to the Consultation Online Form: http://wales.gov.uk/consultations/housingcommunity/renting- homes-white-paper/ http://wales.gov.uk/consultations/housingcommunity/renting- homes-white-paper/ E-mail:rentinghomes@wales.gsi.gov.ukrentinghomes@wales.gsi.gov.uk Post: Renting Homes White Paper, Housing Policy Division, Welsh Government, Rhydycar, Merthyr Tydfil, CF48 1UZ 3 public consultation events: Llandudno 26 June Aberystwyth 01 July Swansea 11 July Consultation ends on 16 August

19. Thank you – any questions? Jon Roche Housing Policy Division Welsh Government rentinghomes@wales.gsi.gov.uk www.wales.gov.uk/rentinghomes