Some of the lesser-known implications of the Renting Homes (Wales) Act 2016 – for both Landlords and Tenants, in the event of a contract-holder’s death.

A year on from the eventual introduction of the long-awaited RHW Act 2016 last December, there has been significant discussion amongst practitioners, agents, landlords and tenants alike regarding some of the major headline changes, as the housing industry has adjusted to the overhaul of private renting in Wales over the last 12 months.

The focus has largely been on the various new statutory requirements for Landlords to observe in order to ensure compliance with the law and maintain their ability to serve no-fault notices seeking possession when permissible under the RHW Act.  Indeed, if you are a private landlord, agent, otherwise operate within, or have even the slightest interest in the Welsh residential lettings market, you have no doubt read countless reminders of the importance of serving written statements of terms for converted occupation contracts, fitting carbon monoxide alarms and respecting the significantly increased no-fault notice period.

One other fairly significant change introduced by the Act has, however, flown somewhat under the radar insofar as media and legal market attention is concerned.  Namely, the consequences of a contract-holder’s death has been vastly overhauled by the RHW Act, with barely any fanfare.

On the one hand, the Act provides a hint of administrative relief for Landlords in the aftermath of a contract-holder’s death, specifically in the circumstances of an intestate contract-holder where family members or representatives are either un-cooperative or difficult to track down.  Indeed, under the previous Housing Act 1988 regime, and in the absence of any apparent personal representatives, Landlords would not be free to market or re-let the property of a deceased tenant in such circumstances until a s21 Notice had been served on the Public Trustee and registered accordingly. 

This clerical and time-consuming headache has been completely removed by the RHW Act, with new provisions that provide welcome certainty in the event of a contract-holder’s death.  Provided there is no person with a right to ‘succeed’ to the occupation contract, it will automatically terminate one month after the contract-holder’s death and the Landlord will be free to market and re-let as necessary from that juncture, without the rigmarole of identifying the previous occupier’s representatives or serving any notice.

However, whilst the Act has eased this particular issue faced by Landlords in the event of a contract-holder’s death, with the other hand it also grants a host of new succession rights to family members of contract-holders. These rights are ones which Landlords must now be live and vigilant to, in order to ensure they do not underestimate the potential longevity of an occupation contract they have granted.

Under the previous regime, assured shorthold tenancies had very limited succession rights; historically in Wales such rights were largely reserved for council tenancies and it was very rare for family members of a tenant (other than spouses or civil partners) to be able to succeed to or inherit an AST.  In stark contrast, the RHW Act now entitles any family member of a contract-holder to takeover an occupation contract and become the new contract-holder as a ‘reserve’ successor.  This is on the basis that there is no eligible spouse, civil partner or cohabitee, and provided that the person claiming succession rights lived at the property in question with the deceased contract-holder for at least the final 12 months of their life. 

This opens up a wide pool of new potential successors for Landlords to look out for, such as young adult children, grandchildren or even nieces and nephews of contract-holders who, while over the age of 18 and no longer ‘dependents,’ nevertheless remain or move in with the contract-holder while studying at college or in further education.  Similarly, older adult children or family members who move in with an elderly relative to help care for them in the last year of their lives are common examples of new potentially eligible successors.

Such individuals were, of course, previously not candidates for succeeding to assured shorthold tenancies and Landlords would have been able to obtain vacant possession of such properties with relative ease via the Court, without risk of counterclaims of succession rights.  In light of the new provisions, Landlords should take care to understand any family members who may be living with a contract-holder at any one time, particularly if they have plans for the property following the current contract-holder’s death.

On the other hand, individuals currently living with family members who occupy their homes under an occupation contract and who are worried about what might happen or where they might live if their relative should pass away, would be well advised to turn their minds to evidencing how long they have lived there and ensuring their electoral and Council Tax records are correct.  This could well prove to be instrumental in ensuring they have security in their home if something should happen to the main contract-holder.

If you are a landlord or contract-holder and believe you may be affected by the new succession rights contained in the RHW Act, Berry Smith are experienced in advising both ‘sides’ of an occupation contract, and can offer assuring, comprehensive practical advice tailored to your situation.

Should you find yourself, as a tenant or a landlord, in a position where you need advice, Berry Smith’s Dispute Resolution Team can assist. Please contact us on 029 2034 5511 or disputeresolution@berrysmith.com