The Law Commission has just published its updated report on the proposals for tenancy reform in Wales. The prospects are for a wholesale reform of the law there.
All the work is based on the original Renting Homes report published by the Law Commission back in 2006. This was led by Martin Partington QC, now chair of The Dispute Service. Sadly the government rejected the report and it appeared to be consigned to history. However, the, at that stage fairly new, regional assemblies were more positive and the report found fertile ground in Wales and Northern Ireland. The Welsh Assembly has been seeking to reform tenancies in Wales and is now planning to introduce a bill to do so during the lifetime of the current Assembly (probably in 2014). Against that background the Law Commission as been asked to review and update its original Renting Homes report by the Welsh Assembly.
What is planned?
Essentially the proposal is a total removal of the Housing Act 1988 and the Housing Act 1985 in Wales. This will mean that Assured, Assured Shorthold, and Secure tenancies will all disappear. These will all be replaced (and existing tenancies will be converted) to two new types of tenancy. These are currently being called the Standard Contract (which is very similar to an AST really) and a Secure Contract (which is quite like a current Secure tenancy).
Will other things change?
Yes. The Law Commission has been critical of the current, fairly complex, system of overlapping legislation and common law provisions. Lawyers of course love this complexity, but most normal people find it less satisfying! The new proposals will mean that a lot of the other associated legislation is also removed and everything is then concentrated in a single new piece of legislation which will cover all issues.
What are the problems?
Well it is a big change for everyone so there will be a lot of work to do. The changes will also mean that there is a risk that the new legislation will have gaps or mistakes which will generate more litigation. It is also not clear what will happen to existing systems like HMO licensing and tenancy deposit protection. They are not really mentioned in the plated report so they may remain untouched or they may be brought within the new legislation. Either way, there will always be something that remains outside so the objective of simplification will only ever be met in part.
I heard that there would be no ground 8 in Wales!
It has been widely reported that the plan is to remove ground 8 which requires a court to give possession if there are significant rent arrears of more than two months. As usual, this is partly true. In a sense all the grounds will be removed because the Housing Act 1988 is effectively being abandoned and rewritten from the ground up in Wales. However, a ground 8 equivalent will probably remain for private sector tenancies on the less secure contract. For social tenancies on a secure contract then there will be no ground 8 equivalent. Therefore social landlords may have more difficulty securing possession for serious rent arrears than before. Private landlords are unlikely to be affected.
What does this mean for agent’s and landlords?
There will actually be an increased level of flexibility in Wales. Many of the restrictions that have existed on the use of ASTs will be removed. It will be easier to offer terms shorter than six months and there will be less of a concern as to whether the tenancy falls outside the system as many of the odd exceptions in the Housing Act 1988 will be removed. There will also be the option for private landlords to effectively compete with the social sector by offering secure tenancies with greater rights.More problematically, there will need to be an extensive process of retraining so that landlords and agents begin to understand the new process. Wise agents and landlords will start this process now, at least in an outline form. There will also need to be wholesale alteration of tenancy agreements to deal with the fairly radical restructuring and new statutory wording envisioned by the report. While model tenancy agreements will be freely available they will be focused on the statutorily required elements and are likely to leave a large number of gaps that sensible agents and landlords would wish to fill in both to protect their interests as well as to ensure that the relationship with their tenants is clearly set out.
Does this mean that Wales is a separate jurisdiction?
No. England & Wales are still one legal jurisdiction. However, as far as landlord and tenant law goes, Wales is increasingly going to diverge from England, not in legal principles, but in the detail of how it is applied. When choosing a lawyer it will be necessary to make sure that they are both skilled in landlord and tenant matters as well as being versed in Welsh law. Naturally, Welsh firms will say that they are the best qualified to advise on Welsh law but English lawyers have long experience in dealing with advice outside their jurisdiction and will probably disagree.
What do I need to do today?
Not too much really. There will probably be a lot of noise and misreporting about the changes. It is worth taking a look at the new report to see what is being proposed and then considering what that will mean for you. Then keep an eye on the Welsh Assembly to see if there is to be a further consultation and to look for the full draft bill. That is when the real work will start.