If you’re a landlord in Wales, there are a couple of upcoming changes to the PRS sector that you need to be aware of.
Wales Housing Bill
On Tuesday 8th July 2014, the Welsh Assembly passed a landmark Bill for Welsh Housing, particularly the Private Rented Sector.
Once the Bill is implemented in 2015, Landlords could find themselves vulnerable to prosecution for breaching the new requirements, so we recommend that you are as prepared as possible.
What the Bill includes
You will be required to register yourself as a landlord and provide a list of each of your properties to your local authority.
- £50 for your personal registration
- £10 for each of the properties you let in Wales
- If you do not register, or give false information, you could face a fine up to £1,000.
If you self-manage your properties, you will have to obtain a license. In order to obtain one, you will have to:
- pass a “Fit and Proper Person Test”
- obey a “Code of Conduct”
- attend and pass a one-day training course
The terms of the proposed Code of Conduct and content of the training course have yet to be determined. You will be issued a membership identification number, which you will be required to display on all property letting-related documents. A license will be valid for 5 years.
- £100 for the test
- £100 for the training course
- Unlicensed landlords who let out their property will face financial penalties determined by the courts, which have no upper limit.
- Letting without a license will be a criminal offence.
- Local Authorities are also endowed with the power to issue a rent stopping order for “illegal” tenancies
If you do not wish to obtain a license, you have one of two options:
- Not let out your property
- Enlist the services of a property management agency to oversee the management of your property. Letting agents will face the same licensing and accreditation requirements of landlords in order to continue operating as agents
These changes will be further complicated by another bill that is currently passing through the Welsh Assembly.
Wales Renting Homes Bill
What this Bill includes
When you let out your property, you will have to choose from either one of two legally recognised tenancy agreements:
- A “secure” contract. This contract will be modelled on the current secure tenancy issued by local authorities. If you provide social housing, you will use this contract, which will create a “single social tenancy”; or
- A “standard” contract. This contract will take the place of the assured short hold tenancy, with a minimum notice period of two months.
You will be required to provide your tenants with a written copy of their rental contract. If you fail to provide a written tenancy agreement under the proposed Bill, you could be sanctioned to the extent of two month’s rent.
The contract will need to include your landlord license identification number, or you will not be complying with the statutory requirements of the Housing Bill and could face other sanctions.
Each rental contract must have a clear definition of “unacceptable behaviour” and “prohibited conduct” to cover issues relating to anti-social behaviour and domestic violence. Breaching these provisions could trigger possession proceedings.
End of Tenancy
Arrangements for starting and ending a tenancy will be standardised.
Health & Safety
You will be required to ensure that there are no Category 1 hazards under the Housing Health & Safety Rating System.
The proposals include abolishing the six-month moratorium on ‘no fault’ evictions.
Although these bills will not be implemented until 2015, you should be aware of the potential impact they will have on any Welsh property you may own now or in the future.