With the requirement that all contracts for a term of less than 7 years are “fit for human habitation”, the Welsh Government hopes to improve the living conditions for those renting homes in Wales.
This is a hot topic at the moment and a similar proposed amendment to the Housing and Planning Bill in England was strongly opposed at the beginning of April, with Baroness Natalie Evans commenting that the proposals would not be helpful for tenants or landlords. Certainly the general feeling appears to have been that the current system of enforcement is fit for purpose.
In addition to the requirement that accommodation is fit for human habitation, Section 92 Renting Homes (Wales) Act 2016 also reiterates the existing repairing obligations contained in Section 11 Landlord and Tenant Act 1985.
Section 91 Renting Homes (Wales) Act 2016 reads:-
(1) The landlord under a secure contract, a periodic standard contract or a fixed term standard contract if less than seven years must ensure that the dwelling is fit for human habitation –
- On the occupation date of the contract, and
- For the duration of the contract.
This is not entirely unfamiliar as the Landlord and Tenant Act 1985 has a similar requirement for properties of low rent.
Section 95 and 96 Renting Homes (Wales) Act 2016 lists a number of situations where a landlord will not be responsible for making the property fit for human habitation including:- where the landlord cannot make the property fit for human habitation at “reasonable expense” (although no definition of reasonable expense is provided and is likely to be the subject of further debate) and where the property is unfit for habitation “wholly or mainly because of an act or omission of the contract holder or a permitted occupier of the dwelling.
There has been much debate and discussion about how fitness for human habitation will be determined. Section 94 of the Renting Homes (Wales) Act 2016 does clarify that it is likely to be determined with reference to the existing 29 hazards contained in the Housing, Health and Safety Rating system and that in addition Welsh Ministers can make regulations to prevent hazards from arising. It is therefore worth taking the time to consider the current system for managing and enforcing hazards with a view to how the Renting Homes (Wales) Act 2016 will impact on landlords when it comes into force.
The Housing Act 2004 provided for a means of assessing the condition in rented properties. The Housing Health and Safety Rating System is the current way that the local authority assesses housing conditions. A risk assessment approach is used to minimise the possibility of certain hazards. The assessment process is complex and the government has produced helpful guidance for Landlord:- ‘Housing, Health and Safety Rating System. Guidance for Landlords and Property Related Professionals’.
A local authority officer will inspect the property and will look for any risk of harm to an occupier which results from a deficiency that can give rise to a hazard. The severity of the risk is calculated by considering how likely it is that there will be an occurrence that could cause harm over the next 12 months. There are 29 listed hazards which are wide ranging and include excess heat, excess cold, asbestos, crowding and space. If the deficiencies increase the likelihood of harm or severity of harm then the local authority will consider whether enforcement action is required.
Currently the local authority alone are responsible for enforcing these standards and they have a number of powers available to them including serving an improvement notice, making a prohibition order, demolition order. Crucially, enforcement is seen as a last resort.
Whilst Section 91 of the Renting Homes (Wales) Act 2016 is based on the current ‘Housing, Health and Safety Rating System’, once it comes into force, it will no longer be local authorities who will be responsible for ensuring compliance. As section 91 is a fundamental term in every contract, the contract holder will be in a position to take direct action themselves if they are of the view that the landlord is in breach of section 91. This is likely to lead to a number of contact holders instigating legal proceedings against landlords for perceived breaches of contract. This is likely to put additional financial pressure on landlords. Contract holders will be able to bring proceedings to cover any injury, loss or damage suffered as a result of the landlord failing to comply with section 91.
It is also likely that regulations will be made which require landlords to ensure accommodation is safe, e.g the installation of carbon monoxide detectors.
The current rating system is complicated and it is not clear what operating model will be used for landlords and contract holders to easily understand. This is likely to lead to some teething problems. There is also likely to be a difference of opinion between the landlord and contract holder as to whether a property is fit for human habitation. In the absence of agreement, costly experts and court judgment are likely to be the only way to settle the dispute.
Practically, landlords will need to ensure that they are adequately resourced to undertake initial inspections and comply with the additional requirements brought in by regulations. This means that they will require robust policies and procedures in the first instance, so that staff across the board can identify and deal with issues at an early stage. Landlords will also need a comprehensive reporting system which allows them to keep track of their compliance with the obligations imposed by the regulations (which are likely to include installing carbon monoxide detectors and electrical testing).
As section 91 stands, the landlord will not be responsible for carrying out works where the property cannot be made fit ‘at reasonable cost’. However, without guidance about what a reasonable cost is, it is anticipated that there will be disagreement between the parties.
Further, where there is a dispute as to whether the property is unfit as a result of the contract holder’s act or omission, this is more likely to lead to litigation. It will be in the contract holder’s interests to prove they are not responsible for the poor condition and vice versa. An example of this is where the landlord alleges that damp is a result of condensation due to the contract holder’s failure to ventilate the property, and the contract holder maintains that it is a result of disrepair.
It is essential that landlords are prepared for the Renting Homes (Wales) Act 2016. In readiness for the implementation of the Act, we will be:
- Producing model occupation agreements specifically appropriate for the social housing sector for use in a range of different situations such as introductory agreements, housing for vulnerable groups and minors.
- Producing a suite of policies and procedures ready to be adapted to reflect your own organisation’s ethos and values.
- Providing training for staff on every aspect of the Act.
These will be available on a fixed price and a package basis.
If you’d like to receive our updates on the implementation of the Act as and when the secondary legislation becomes available, and more details about our Renting Homes products please contact Katie.firstname.lastname@example.org
Disclaimer: The information set out above is for general information only. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.