Welsh Landlords – Set Up to Fail?

Welsh Landlords – Set Up to Fail?

17:14 PM, 27th December 2022, About A year ago 10

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Are private landlords in Wales being set up to fail with the new legislation?

The recently implemented Renting Homes (Wales) Act has automatically replaced all existing ASTs with a new “Occupation Contract” from 1 December 2022.

All landlords are now required to issue “Written Statements” (effectively replacement contracts) to tenants (now called “Contract Holders”) within six months – so existing ASTs have to be “converted” into a RHW compliant contract.

The draft RHW compliant contract runs to some 42 pages. Landlords need to consider each and every clause, and ensure that every line and word of their new contract is compliant. This will be a huge task for every individual tenancy, and the sanction for getting it wrong is, in many cases the inability to re-gain possession in any circumstances; legal withholding of rent or rent repayment orders, possibly two or three of these sanctions.

I can just hear the likes of Gen Rent, Shelter and No Win No Fee Lawyers rubbing their hands together.

The NRLA have been of some, limited use – they have issued a direct conversion contract, but only for their most recent contract which has been is existence only a couple of years . This is no help with existing NLA or RLA contracts (which most of our tenants are on) nor in converting any of the many other contracts which are in use.

I paid the fees to attend NRLA training on this specific matter some while ago. Also on the course were two representatives of a letting agency with several hundred tenancies under their control. We were all hoping to learn how to efficiently, effectively and compliantly convert these various contracts. We all left the course no wiser (in this regard) than before it started. I pointed this out to the NRLA and they refunded my course fees!

I will say that the course did address (successfully) the matters of fitting compliant smoke and CO alarms, and getting electrical inspections done – but this is the easy part. It’s the new contracts that are the ongoing problem.

We are quite experienced landlords – not afraid of a bit of administrative paperwork, and our tenants usually stay with us for years, but my wife is losing sleep – worrying about how to stay compliant.

We know that the stated aim of both the UK and the (so called) Welsh Government to do away with the small, private landlord and this may well be a step in this direction. I cannot see how any landlords can be sure of having compliant contracts by the end of the six-month deadline.

No wonder so many private landlords and agents are running for the hills.

Or have I got this all wrong – am I missing something here?

Paul


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Comments

moneymanager

11:37 AM, 28th December 2022, About A year ago

"in many cases the inability to re-gain possession in any circumstances"

How are lenders responding to this?

Chris Bradley

12:01 PM, 28th December 2022, About A year ago

The councils also have to comply with this new format contract and my elderly relative recieved a letter stating that in the new year they would be in contact to issue an "occupation contract". I received a call because my relative thought he was going to be evicted because he didn't have an "occupation" contract because he was retired.
Someone didn't think through the dual meaning of the new terminology, I wonder how many elderly tenants (sorry occupiers) will be stressed out by this process, so landlords it's not just you who are stressed by this

Dr Rosalind Beck

12:02 PM, 28th December 2022, About A year ago

Hi Paul
I have been in conversation with the Guild of Residential Landlords on this and it is my understanding that converting the contracts is practically impossible. They therefore (obviously) recommend new contracts in all instances. I'm working on a stack of them now. I have some fixed contracts which come out end of June 2023, so I am aiming to issue 'replacement' contracts to run from 1st of January to 30th of June. This covers the 'minimum' length of tenancy that is now mandatory in Wales. One can then only hope that if new tenants are lined up for 1st of July, that the current ones leave. It might be best to wait until May or June before signing any new ones to other people - especially given the acute shortage of rentals - many people will want or need to stay put. In general the Guild is recommending 'periodic' tenancies though and not fixed ones (these are more suitable for student-type lets).

TheMaluka

12:22 PM, 28th December 2022, About A year ago

Reply to the comment left by Dr Rosalind Beck at 28/12/2022 - 12:02
I guess that England will look at the worst aspects of the Scottish and Welsh systems and incorporate them into a new English “Owners Indenture” where the property owner has to agree to be the servant of the occupier. Apologies if this sounds cynical.

Mick Roberts

8:05 AM, 31st December 2022, About A year ago

Gen Rent, Shelter and No Win No Fee Lawyers rubbing their hands together.
They best unrub their hands then, cause less supply now for new tenants & more expensive rents.

We are quite experienced landlords – not afraid of a bit of administrative paperwork, and our tenants usually stay with us for years, but my wife is losing sleep – worrying about how to stay compliant.
I'm same, thinking i'm gonna' go prison for some new retrospective rule they bring in every week & I can't physically get round all the tenants houses to give the paperwork to tenants I took 20 years ago who would have never complied with these rules.

We know that the stated aim of both the UK and the (so called) Welsh Government to do away with the small, private landlord
And Govt forgetting how many tenants are being housed by this smaller Landlord who may well go on to house many homeless. We were all small Landlord to start with.

Monty Bodkin

9:39 AM, 31st December 2022, About A year ago

Reply to the comment left by Mick Roberts at 31/12/2022 - 08:05
I feel the same Mick. But you've been through a lot worse. Have a re-look at some of your past videos. They were an inspiration for me.
I've never had it as bad as you but I have had similar experiences.
Keep your chin up lad.

TrevL

14:22 PM, 31st December 2022, About A year ago

You can guarantee that remortgaging is going to be difficult.

If lender allows remortgaging then the rate will surely be higher to reflect the risk, and that will be on top of the recent rises.

Will make a lot of situations unviable.

DavoLFCUbique

17:38 PM, 17th May 2023, About 11 months ago

I have a property in Wales that I rent out.#
I have had the same tenant there for almost 9 years. he has been an excellent tenant and i like to think i have been a good landlord in return.

I used a letting agent locally who used to keep me up to date and informed but they no longer exist, having merged i believe.

please can someone advise what i need to do to be compliant with the new laws on contracts with then new Welsh legislation? we started with a Assured short hold tenancy which has simply rolled over. is there something i need to do contract wise. please advise

Dr Rosalind Beck

17:54 PM, 17th May 2023, About 11 months ago

Reply to the comment left by DavoLFCUbique at 17/05/2023 - 17:38
Hi.
I'm not an expert on which would be the best course of action for you. What I do know is that you need to get your skates on as you need a valid occupation contract in place by the 31st of May.

Chris Bradley

17:59 PM, 17th May 2023, About 11 months ago

Reply to the comment left by DavoLFCUbique at 17/05/2023 - 17:38
I would suggest that you firstly make sure you register with rentsmart Wales.
If you are managing the property yourself your will need a licence to manage and there are courses to do, if you can't qualify for licence you will have to allocate someone to manage the property for you who has a licence.
The new occupation contracts need to be in place by the end of the months
And there are changes to requirements inside the property such as smoke alarms now need to be wired in not battery ones.
Lots to learn and implement, start at rent smart Wales

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