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Renting Homes in Wales – Housing Law Reforms

6th August, 2013

Today we continue our series of articles about proposed changes to residential lettings in Wales.

The new types of contracts

The two main existing statutory regimes – the secure tenancy in the Housing Act 1985 and the assured regime in the Housing Act 1988 – will be replaced under the Renting Homes Bill with two new types of contract. A secure contract and a standard (insecure) contract.

1. Standard Contract
Security of the contract holder is determined by the contract. Once the fixed term has ended, the Landlord can evict the contract holder provided he has been given two months’ notice to quit.

2. Secure Contract
A secure contract offers greater security to the contract holder as the Landlord can generally only terminate the contract of the contract holder if found by a court to be in breach of the agreement terms and eviction is determined by the court to be reasonable. Security is further enhanced by the possibility of succession to family members.

There will be no de facto six months tenancy and therefore no minimum contractual length allowing for short tem lets of two or three months on a standard contract. Tenants have indicated a preference for 18 months and two year tenancies and these are likely to become the norm. There will be a massive increase in flexibility allowing landlords to offer a wider range of possibilities.

Model contracts will be prescribed by statute and include pre written terms in plain English. Some terms will allow for amendment or variation within agreed limits and some will be agreed in each case.

The contracts will contain four types of terms:-

1. Key Terms
These are details which are unique to the contract such as the start and end dates, the rent level and address of the property.

2. Fundamental Terms

This sets out the essential rights and obligations of the landlord and the contract holder such as the name and address of the landlord, core repairing obligations and the grounds for possession.

3. Supplementary Terms
These deal with the practical matters and cover payment of rent and maintenance.

4. Additional Terms
These cover specific issues that make a house a home, such as keeping pets or break clauses.

Some of these elements are already in force of other jurisdictions of the UK. In Scotland tenants are given a statement of landlord’s repairing obligations and premises are to be fit for habitation. In Northern Ireland rent books set out part of the key terms.

The relationship of Renting Homes and Consumer Protection Law

Renting Homes draws on the law of unfair contract terms which has been extended to housing contract by the Unfair Terms in Consumer Contracts Regulations 1999. The impact of the regulation is that if the court finds a term to be unfair then it will not be binding on the occupier and the landlord will not be able to rely on it.

The regulations provide important protections for occupiers but can leave landlords uncertain about the status of terms within their contracts. Nor is it easy for occupiers to enforce their rights under the regulations mostly because of the lack of security in the private rented sector.

The Renting Homes solution seeks to utilise consumer protection law to achieve housing law protection by integrating the regulation into the statutory scheme as part of the fundamental and supplemental terms so landlords are afforded certainty about the legality of terms.

The regulations will therefore be incorporated into all tenancies and will apply to all landlords and occupiers irrespective of their status.

Tomorrow we look succession rights.

 

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