Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 15 December, 2014
Report of the Cabinet Member for Housing, Building Maintenance and Community Safety
Renting Homes (Wales) Bill
Purpose of the Report
1. To update Cabinet on the contents of the proposed Renting Homes (Wales) Bill.
1. That the proposed changes contained within the Renting Homes (Wales) Bill be noted and that the report be referred to the Housing and Public Protection Scrutiny Committee for information.
2. That further Cabinet reports be submitted in respect of the options available to the Council in implementing the changes required to meet the requirements of the Bill.
Reasons for the Recommendations
1. The report is for information and for all Members to be made aware of the implications of the proposed Bill.
2. To enable Cabinet to make informed decisions on any required changes to policy.
2. The Renting Homes White Paper was published by the Welsh Government in 2013 and set out proposals for improvements to the law for renting homes. The changes proposed in the White Paper were designed to replace what is currently a confusing and complex area of law with a clearer, simpler and more straightforward legal framework. Primarily the changes relate to tenancy agreements or the contracts in place between landlords and tenants.
3. The White Paper was subject to consultation during 2013. Responses to the Welsh Government were broadly positive, with 95% of respondents supporting changing the legal framework for renting homes in Wales.
4. The proposals in the White Paper are being progressed by the Welsh Government in the form of the Renting Homes (Wales) Bill. The changes focus on replacing the complicated legal arrangements that currently apply to renting a home, e.g. the wide variety of tenancy agreements that can exist between landlords and tenant. The existing tenancy agreements will be replaced with two consistent types of tenancy agreement which will apply to all rented homes, whether they are in the social or private rented sector.
5. The Renting Homes (Wales) Bill is expected to be considered by the National Assembly for Wales in 2015. If passed by the Welsh Assembly, the changes may take effect in late 2015 or early 2016.
Relevant Issues and Options
6. The number of people renting a home in Wales is increasing. There are many reasons for this, including the economic situation, a slowdown in the number of new homes being built and tighter lending requirements for mortgages. People may rent a home from a social landlord, such as the Local Authority or Registered Social Landlords (also known as Housing Associations), or from a private landlord, either directly or via a letting agent.
7. There are positive aspects to renting a home; such as the security of tenure that is a feature of Local Authority and Housing Association homes and the flexibility that private renting provides, for example by enabling people to live near to their place of work, or being able to rent a home for a short period of time.
8. The current differences between renting a home from a Local Authority, Housing Association or private landlord contribute to weaknesses in the workings of the housing system.
· Renting a home is not always seen as a good choice, indeed, it is sometimes considered to be the last option. This may be due to perceived or actual insecurity of tenure, uncertainty about responsibilities or the short term nature of the tenancy.
· The existing legal framework for renting a home can be a confusing and complex area of law. This can cause worry for people renting their homes and, in some cases, landlords too. Both tenant and landlords can be faced with legal costs in order to resolve difficulties that arise.
· The current arrangements also mean that some people are reluctant to move between social and private rented homes. This reduces the ability of the overall housing system to meet the demand for housing, as well as the ability for individuals to have mobility in the housing market.
9. Many of these problems are due to inconsistencies in the underpinning tenancy law. By removing unnecessary differences between tenancy types, the Welsh Government aims to create a more effective and joined-up rented housing sector.
10. The foundations of the Welsh Government's proposals are based on the Renting Homes White Paper that was written by the Law Commission. The Renting Homes Bill, if introduced, will include two types of tenancy or rental contracts that will apply to all rented homes, whether they are rented by a Local Authority, Registered Social Landlord or private landlord:
11. The two types of rental contract are:
· A Secure Contract.
· A Standard Contract
12. The secure contract will be modelled on the tenancies used by local authorities. This will provide the highest degree of security of tenure that is protected by law, as well as providing a â€˜single social tenancy’ that will apply consistently to social housing provided by both Local Authorities and Housing Associations. Private landlords will also be able to issue secure contracts if they choose to do so. Whilst a private landlord issuing a secure contract will not provide social rented accommodation, they will provide a more secure and longer term tenancy option.
13. The standard contract will be modelled on the assured short hold tenancy that is used in the private rented sector. This form of tenancy agreement provides a lower degree of security of tenure, which broadly reflects current practice in the private sector.
14. Organisations that represent the private rented sector did raise concerns about the proposed Bill during the consultation process. The Council in its wider strategic housing role will work with landlords to assist and support them to meet the requirements of the Bill. Support to landlords is already provided by the Council, for example through the facilitation of the Landlords Forum. Wider engagement with the private rented sector is also planned as part of the 'Landlord Offer' being developed by the Housing Advice and Homelessness Team. Greater partnership working with the private rented sector is also a key feature of the Housing (Wales) Bill in relation to the prevention of homelessness and the new powers granted to the Council from April 2015 to discharge the statutory homeless duty by finding a household a suitable home in the private rented sector.
15. The proposals to reform tenancy law will not fundamentally alter the rights and responsibilities of tenants and landlords from those that currently exist; rather, they are designed to create a simpler, more logical and clearer legal framework to replace the complexity of current law.
16. There are likely to be benefits to both tenants and landlords in the implementation of a simplified legal framework for renting a home. For tenants the proposals will simplify and standardise rental contracts, making them and the terms they include much easier to understand. This will help avoid disagreements and difficulties between tenants and landlords. It will also help to avoid the legal costs that can sometimes be incurred when trying to resolve problems. In addition, the new arrangements will help in a number of significant ways, including:
· Helping to ensure a more effective response to housing-related anti-social behaviour and in situations involving domestic abuse.
· Providing a more flexible approach to joint tenancies.
· Making it easier for young people to rent.
· Standardising succession rights.
· Enabling eviction for serious rent arrears from social housing in line with the current position for local authorities.
· Increasing the flexibility to rent short-term by abolishing the six-month moratorium on ’no fault’ evictions.
· Making landlords’ obligations for repairs clearer within the rental contract.
17. The benefits for tenants, in particular having easier to understand rental contracts, will also apply to landlords. Landlords will also benefit from greater clarity on the rights and responsibilities of both tenant and landlord which are essential for maintaining a successful tenancy. Amongst the changes, the proposals will:
· Remove confusion over the distinction between leases and licences.
· Reduce costs incurred through reducing complexity.
· Provide a better way for landlords to deal with abandoned properties.
· Enable landlords to remove from the tenancy someone who is no longer living in the premises.
· Provide landlords with certainty regarding contract terms.
· Help ensure that tenants understand their responsibilities by requiring all landlords to issue written contracts.
· Provide model contracts that landlords can use with confidence.
· Require landlords to ensure the property has no serious (Category 1) health and safety hazards.
· Make it harder for substandard landlords to undercut good ones.
18. Licences used in supported and temporary accommodation are included in the changes proposed in the Bill, with a number of exceptions.
· Supported housing, where there is a direct link between accommodation and support, is excluded from the changes during an â€˜enhanced management periodâ€ of up to two years, which can be extended for further periods in particular circumstances. After the expiry of the enhanced management period the contract becomes a secure or standard contract as appropriate.
· Licences are exempt when they are for the provision of short term accommodation for up to 4 months.
The Welsh Government’s summary of consultation responses notes that feedback provided from Cymorth Cymru, which represents supported housing providers, suggested that, rather than rely on specific time periods to define the type of contract to which an individual is entitled, it would be more appropriate to focus on the purpose behind the provision of the accommodation.
19. The changes will also have wider benefits to the whole housing system and meeting the housing needs of residents. The standard tenancies will provide more flexibility for Local Authorities, Housing Associations and private landlords to operate in different rental markets and to meet the housing needs of vulnerable people in different circumstances.
20. It is proposed that all current housing tenancies would convert automatically to one of the two new types of rental contract on a set date. This would affect all tenancies in place in the Vale of Glamorgan, including those managed by the Council, Registered Social Landlords, private landlords and letting agents.
21. The Welsh Government indicate that they do not consider it necessary from a legal perspective for all tenants to sign up to new rental contracts, as under the proposals all existing tenancies would automatically convert to the new framework on the set date. It is, of course, good practice to ask tenants to sign new rental contracts.
22. The Welsh Government has drafted the secure and standard contracts, along with accompanying guidance notes. The consultation on the content, format and layout of these documents ended on 14th October 2014.
Resource Implications (Financial and Employment)
23. There are likely to be administrative burden on landlords, including the Council, if they decide to issue new contracts to their tenants. There are also likely to be some financial impacts on the Council in the short term, though these are yet to be quantified.
24. The Welsh Government has recognised this impact and aim to ensure the process is managed in such a way as to reduce any unnecessary administrative burden. As such they are considering a phased approach by making the model contracts available prior to the implementation date and the Council will take into account the views received from stakeholders on this issue.
Sustainability and Climate Change Implications
25. The new policy will provide the Council with an effective tool to promote community cohesion and safety, reduce the fear of crime and ensure the sustainability of the areas where tenants live.
Legal Implications (to Include Human Rights Implications)
26. The Authority will be required to meet the requirements of the new Renting Homes (Wales) Bill in relation to the new secure contract proposed when it is enacted.
Crime and Disorder Implications
27. There are no negative crime and disorder implications arising from this the report.
Equal Opportunities Implications (to include Welsh Language issues)
28. The introduction of the Renting Homes (Wales) Bill will do much to improve the quality of life of some of the most socially and economically disadvantaged people in the Vale of Glamorgan.
29. This report is consistent with the Corporate Objectives of the Council: Housing: Vale of Glamorgan residents have access to affordable, good quality suitable housing and housing advice and support.
Policy Framework and Budget
30. This report is within the policy framework and budget.
Consultation (including Ward Member Consultation)
31. As this is a Vale wide issue no specific ward member consultation has been undertaken.
Relevant Scrutiny Committee
32. Housing and Public Protection.
Jenny Lewington, Housing Strategy Officer - Tel: 01446 709326
Hayley Selway - Head of Housing
Mike Ingram - Operational Manager for Public Housing
Pam Toms, Strategy and Supporting People Manager
Alan Sinclair, Housing Manager
Ian Jones, Housing Advice and Homelessness Manager
Lori Bigglestone, Accountant
Committee Reports - Legal
Miles Punter - Director of Visible Services and Housing.