|Caroline Jones AC|
|David Melding AC||Yn dirprwyo ar ran Mark Isherwood|
|Substitute for Mark Isherwood|
|Dawn Bowden AC|
|Delyth Jewell AC|
|Huw Irranca-Davies AC|
|John Griffiths AC||Cadeirydd y Pwyllgor|
|Emma Williams||Dirprwy Gyfarwyddwr, Is-adran Polisi Tai, Llywodraeth Cymru|
|Deputy Director, Housing Policy Division, Welsh Government|
|Julie James AC||Y Gweinidog Tai a Llywodraeth Leol|
|Minister for Housing and Local Government|
|Rebecca Raikes||Cyfreithiwr, Llywodraeth Cymru|
|Lawyer, Welsh Government|
|Simon White||Pennaeth Strategaeth Tai a Deddfwriaeth, Llywodraeth Cymru|
|Head of Housing Strategy and Legislation, Welsh Government|
|Chloe Davies||Dirprwy Glerc|
|Katie Wyatt||Cynghorydd Cyfreithiol|
|Rhiannon Lewis||Cynghorydd Cyfreithiol|
|1. Cyflwyniad, Ymddiheuriadau, Dirprwyon a Datgan Buddiannau||1. Introductions, Apologies, Substitutions and Declarations of Interest|
|2. Y Bil Rhentu Cartrefi (Diwygio) (Cymru): Sesiwn Dystiolaeth 1||2. Renting Homes (Amendment) (Wales) Bill: Evidence Session 1|
|3. Papurau i'w Nodi||3. Papers to Note|
|4. Cynnig o dan Reol Sefydlog 17.42 i Benderfynu gwahardd y Cyhoedd o Weddill y Cyfarfod||4. Motion under Standing Order 17.42 to Resolve to Exclude the Public from the Remainder of the Meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 09:30.
The meeting began at 09:30.
Okay. May I welcome everyone to this meeting of the Equality, Local Government and Communities Committee? The first item on our agenda today is introductions, apologies, substitutions and declarations of interest. We have David Melding substituting this morning for Mark Isherwood for this particular item, and Mark Isherwood will then join us for the remainder of the meeting. Are there any declarations of interest? Caroline.
Yes. I draw Members' attention to section 8 of my register of interest: joint ownership of a property in the Swansea area where I derive a rental income.
We'll move on then, to item 2, which is our first evidence session with regard to the Renting Homes (Amendment) (Wales) Bill. I'm very pleased to welcome the Minister, Julie James, here this morning to give evidence to the committee. Minister, would you like to introduce your officials for the Record?
I'll ask them to introduce themselves, Chair, if that's okay.
Good morning. Emma Williams. Housing policy division and senior responsible officer for this Bill.
Simon White. Housing policy division.
Rebecca Raikes. Legal services, lead lawyer.
Okay. Diolch yn fawr. Before we move into the questions that we have for you, Minister, is there anything that you would like to say in the way of opening remarks?
Only to say that we're very pleased to be bringing this Bill forward and to pay tribute to my team, who have done an enormous amount of work in what was actually a very, very small amount of time.
Okay, thank you very much. I'll begin, then, with some initial questions. You've previously stated that the primary reason for the Renting Homes (Wales)
Act 2016 not being commenced is negotiations with the Ministry of Justice, particularly with regard to court rules and IT systems. I wonder if you could give the committee an update on those talks, and if you consider that there is a risk that the 2016 Act may not be commenced until after the next Senedd elections.
So, we're working very, very hard to make sure that it is commenced before the end of this Assembly term. There are two systems, potentially, affected, and those are the system used by landlords to submit a rent arrears possession claim and the internal case management systems. Simon White, my official who's with us today, is the person who's been most involved with those, Chair, so I'll ask Simon to say one or two words about how it's going.
Yes, certainly. Thank you. Yes, the two systems are the possession claims online system, which is the externally facing system that landlords would use to submit a rent arrears possession claim. That, after a lot of work with Her Majesty's Courts and Tribunals Service colleagues, we're confident might just need some minor change but nothing significant.
And then there's separately the internal case management system. The issue comes down to the documents that the systems produce at the end of the day. They reference assured shorthold tenancy. The systems need to be, obviously, changed so that that is no longer there or is adapted to fit the situation in Wales. But being an internal system, there's also the possibility of perhaps making some administrative workarounds that wouldn't be possible on an externally facing system. So, we are confident that those changes won't actually lead to a delay in implementation and we will be able to hit the target of implementing before the end of the current Assembly term. Obviously, we're continuing to work with MOJ colleagues and HMCTS colleagues on that.
But you're on schedule, as it were, in terms of the timing, you would say.
We are, yes.
Chair, just to say that that's not the only issue. There are also over 20 sets of regulations associated with the Act, so we're also working very hard to bring all of those forward so that we can implement it in its entirety.
Yes. With that secondary legislation, Minister, is all of it ready to be laid in terms of the 2016 Act, then, or—?
No, not just yet. There are two bits that we're particularly working on at the moment: the regulations on supplementary terms and prescribing model contracts. So, all the others are nearing completion; those need a bit of work yet.
Yes, okay. Again, given that the 2016 Act has not been commenced, what would you say the evidence is that it needs to be amended? What's changed since that 2016 Act was passed?
Mostly, it's political commitment. So when we passed the 2016 Act in the Assembly, I think many of us—I certainly had—needed to be reminded quite how radical it was, and I think because we didn't commence it, people being—. Well, I'm only going by myself, Chair, so I'm saying 'we all', but really I meant 'I' was quite surprised when I reread it to remember quite how radical it was. I think in passing such a radical Bill, we overlooked the thing about section 21 no-fault evictions, because the whole Bill itself was so radical that that didn't come completely to the surface, and I think, since then, there's been quite a discussion in wider UK society around no-fault evictions. And so, what we're doing is amending the Bill to make sure that, in Wales, we're in the best possible position of the UK nations to ensure that a tenant who hasn't done anything wrong can have the best security that we can give them.
Okay. Would you have considered waiting to evaluate the impact of the 2016 Act before amending it? Is that something that you've given some consideration to?
We obviously did think about that, because this is a significant piece of work to have to do, and it's pretty unusual to amend an Act that's not yet commenced, but there is a significant body of evidence to say that the two-month period for a no-fault eviction isn't enough for a family, in particular, to find themselves another good rented home in a similar area to make sure that their children are not disrupted from school and so on. So, this is not any suitable house: this is a suitable house in an area that might be very important in terms of the family and the children in particular. So, a six-month period is much better than a two-month period for that, clearly.
Okay. Could you tell the committee how likely you consider it that Welsh Government will seek to amend this Bill and the 2016 Act after Stage 1, to incorporate further policy measures?
There will be some Government amendments, but they're to do with tidying up, rather than policy, if you see what I mean. So, there are some issues—.
When we first introduced this Bill, we thought it would be a really short Bill, saying, 'We're going to increase this clause from—.' And actually, having looked through the Bill, because of the way the Bill—sorry, the Act once it's enacted—is drafted, it's really integrated right through, so the whole issue around the way that the standard contracts work and the way that the break clauses work and the way that all of this works is integrated right through the Act. So, we've had to do a lot more work to make sure that in this change, we don't have knock-on effects right through the Act. So, it's turned out to be a lot more work than we anticipated, and Emma and Simon—Simon in particular, I think—live and breathe the entire 2016 Act, and are much more able than I to tell you what the knock-on effects through the Act have been. But it's startlingly large, this amendment Act, for what would appear to be a very simple change.
In terms of accessibility and understandability of legislation, Minister, did you consider a new single Act, obviously incorporating the 2016 Act, and this Bill?
So this Bill doesn't make that many changes: although there are consequential little tweaks all the way through, it doesn't make any fundamental changes. This isn't a stand-alone Bill in housing terms. So, I think at some point, there'll be a case for a consolidation Act for housing.
You'll know that there are a number of things in the local authority area that need consolidation, so we're already talking about a planning consolidation Act. All of those affect local authority law, so actually, they're all interacting, so it's really complicated to do. So we haven't got a stand-alone Act that's just brilliant, and that's the only thing you have to read, and then we're going to amend it: you've still got a whole body of other housing law that it's got to be read alongside of. So, it wouldn't work is the short answer, I think.
This is the fourth bit of legislation relating to rent: laws around homes that are rented. It seems to me there's an awful lot of tweaking, not consolidation. I thought the Welsh Government was committed to consolidation, and it was going to do it over a 10 or 20-year period, because that's what it requires. And it seems to me that housing, because it's been such an active area, would have been a reasonable area to start, because you want to do the big areas of law, don't you?
So, I don't disagree, really, that we need to consolidate, but there was no way that we could consolidate whilst doing this because we just don't have the resource to do that. We're committed to doing the planning consolidation first, and the resource for that is enormous. If you had to rank areas of law that are more complex than others, planning is definitely at the top. You have to have a table this size to set out all the bits of legislation you have to have in order to make simple planning decisions. So, whilst I don't disagree with the premise that you're putting forward, we just don't have the resource to do it all at once.
We will be maintaining a website that makes sure that it's all up to date, it's easy to follow, and we're producing a whole series of model documents so that people won't have to work their way through the law in order to write their simple contract—we will be producing the model contracts and so on. So, we will have a very easy-to-use website that shows you where the law is. I think that's the decent compromise between sorting the law out and—
It will certainly be a help, anything that facilitates interpretation of the current law and where it's found.
Yes. We don't want people to make inadvertent mistakes or to have to have expensive advice that's not necessary. So, we'll make sure that it's very user friendly at the front end, but sorting out the sort of plumbing is a bit more of a task than we had the resource for in this Assembly term.
Thank you. If we can turn to the issue of rights and this balance of rights within the legislation that you're proposing, the balance between protecting the tenant and also protecting the rights of the landlord as well. So, can you explain to the committee how the provisions in this Bill comply with article 1, protocol 1 of the European convention on human rights in respect of landlords' right to peaceful enjoyment of property?
Yes. So, this is all about a balance, isn't it? I've explained several times, in answering questions in Plenary and in debates and so on, that it's not actually possible to abolish no-fault evictions in their entirety, because if somebody owns a house, they have a right to it. And you can think of instances in which they might themselves be homeless whilst owning a house because they couldn't get access to it. So, although people use that as a short-form term, it's not possible to do and, actually, it's not something any of us would actually want to do once you think it through. So, there's always going to be a circumstance in which somebody who owns a house and finds themselves homeless, you'd want to give them access to that house, even though the people currently occupying it have done nothing wrong. So, you start from, you have to give access, and then it's about balancing. So, how long is the balance between having a landlord not able to get possession and having a tenant able to find themselves a decent home somewhere else because they're being put out, through no fault of their own? And what we're trying to do is get that balance right. So, I think six months is the right balance for that because that's not that long to have to sort yourself out as the landlord, and it's a decent amount of time, as I said, for a family and so on to find another place to live in a catchment area or whatever. So, we are trying to get the balance right.
And you've clearly come to the conclusion that this is where the balance lies in the estimation of Welsh Government, despite some calls externally from people to say, 'Go further, actually get rid of no-fault evictions entirely.'
I don't mean this to be trite, although it will sound it, but at the moment, nobody likes us, and so you sort of feel that both sides are annoyed. Emma said earlier on in the conversation around all of this, 'This is a Bill with no friends.' We are trying to find a balance. We've got the tenants' organisations urging us to go further, we've got the landlords' organisations urging us not to go so far. We're trying to sit somewhere in the middle.
Diolch, Cadeirydd. Regarding consultation and evidence base, the majority of landlords who responded to the consultation were opposed to increasing the minimum notice period and increasing the period at the start of an occupation contract when notice cannot be served. So, what regard has the Welsh Government given to its own consultation?
Yes. So, as I say, we've got objections on both sides, and you're right, that is what the landlords said. We also have the tenants' organisations saying that we haven't gone anywhere near far enough and they'd like much more security of tenure and so on. So, for us, we've had to carefully balance out what are clearly competing views in the consultation. There's no meeting of minds in this consultation, so what we're trying to do is find the middle ground where most people don't have that much objection.
Okay. Thank you. So, the explanatory memorandum to the Bill highlights that the Welsh Government did not have a comparable route to Rent Smart Wales to seek the views of individual contract holders. So, what efforts did the Welsh Government make to maximise the number of individual tenants responding to the consultation, in addition to obtaining the views of representative organisations?
So, Shelter Cymru carried out an online survey and widely promoted the full Welsh Government consultation, and we had 114 responses, so 62 private tenants, 24 former private tenants, 13 social tenants and seven landlords, to that. The survey questions were closely based on the consultation questions, although some of them were simplified for a different audience. So, although we've got the single Shelter response, we've also got all the individual responses that came back from the consultation. You're right, we haven't got a neat way of contacting all tenants, which we do have for landlords in Wales, and so we thought that was a good way of reaching out to as many as we possibly could.
If I could just make a third point, the introduction of such legislation in Scotland led to 24 per cent of private landlords leaving the sector, and only 5 per cent incoming to the private sector. With around 20 per cent of private landlords leaving, do you envisage the same sort of scenario for Wales, and if so, this will obviously—if it did happen—exacerbate the already homeless—the situation we have with the lack of affordable homes. What plans do you have to counteract this, should it happen?
We're not expecting that to happen. This Bill isn't exactly like the Scottish legislation, and we've done a lot of work with the landlords. Although they've put forward a lot of responses to the consultation saying that they'd like various tweaks, we're not having an enormous number of people saying, 'Do you know what? I'm not going to stay in the market if you do this.'
This is a balance, isn't it? Most of the landlords in Wales—and I just want to say this really publicly—are really good landlords. People are very happy to rent houses from them, they have good services from those landlords and the relationship is a good and friendly one. But, unfortunately, we do have landlords who are not in that category, and so, I would hope that what we're doing here is forcing the ones who are not in that category out of the market, and making the market a fair and equitable playing field for the good landlords who do want to give a good service.
You mentioned that nobody loves this Bill—you tried to get a balance, and the balance is everybody doesn't like it. [Laughter.] Does the First Minister like this Bill, because, just to return to no-fault evictions, initially, the First Minister indicated that we'd be getting rid of those? So, what is the First Minister's position on this Bill?
I think the First Minister takes the same view as I do, which is what we're trying to do here is get the best balance in a very difficult place. I mean, it is a very difficult thing to do, isn't it, because it is really tempting—and it's such a nice slogan, 'We'll ban no-fault evictions'? Obviously, somebody who is not at fault should not be put out of their house, and that's such a nice thing to think, and it's right, isn't it? That's right. But then you immediately come up against, 'Well, what if that's the only house I own?'
Yes, so it's when you come down to the real issues here. Most of the landlords in Wales own one other house. So, they own the house they live in and one other house. If their relationship breaks down or circumstances change, they may well need that house back. We're not talking about multimillionaire, thousands-of-property landlords for the most part in Wales. Obviously, we do have some landlords with more than one house, and some with several houses, but most of our landlords have one house. So, once you come up against that, you start getting into real difficulties about where is this balance. We're just trying to strike that.
Okay. So, you, Welsh Government, the First Minister are taking a very pragmatic approach. You've explained that well. Where does that leave your discussions with people like Shelter Cymru, who have been such a strong voice around this? They say they welcome the measures that you're bringing through in this, but they see it really as an interim step. Ultimately, you've got to get rid of no-fault possession.
I think Shelter are in some difficulty over that as well, because—we've tried to work through a whole series of scenarios. So, is there something we could do for landlords who own more than one house, for example? Is there something—actually, it's impossible to do. It's impossible to tie that down. There are so many ways of owning property. I think, Delyth, you asked me something like that in Plenary. You would immediately just make 14 companies, all of whom owned one house. There are so many loopholes in the way that we do that.
We don't control all of the law of property, remember, as well, so we can't change some of the other things that would go with this. There would be things the UK Government could do, perhaps, in this field that we don't have the levers for. But it's just much more complicated than that. There's absolutely no doubt that Shelter would like us to extend the notice period and so on, and I understand entirely why they want to do that, but we also have a big lobby of good landlords who think that that would be very difficult. So, again, it's just the balance, isn't it? And we will obviously be monitoring this really carefully. If it doesn't work, because we still have a range of no-fault evictions that seem unfair to us, we will have to look at that again. And if we did have a mass exodus of good landlords out of the sector, we'd have to look at that again. So, it's hard to know. We think this is the best that we can do in terms of a balance. I know it does seem that I'm slightly making light of it, but I'm genuinely not. Actually, nobody likes it and you've got to try and think, 'Well, maybe that is the sort of sweet spot in the middle.'
You've obviously looked at the different approach that's been taken in Scotland and in England—why have you not followed those? Why have you rejected those? Why is this going to be better than what's happening in England and Scotland?
So, the other option is to set out in the legislation all of the grounds that you can currently think of that could be grounds for eviction, and say that you have to use one of those. So, you end up with many, many, many grounds for eviction.
Actually, going back to the point that David Melding made earlier, there is an incredibly complex set of rules about what can and can't be done. So, I don't think that's actually very beneficial, and also, somebody will find one that you didn't list—that's the truth. Somebody will sit down in academia, or some clever lawyer somewhere, or whatever, will sit down and they will go through that and they will find grounds that you haven't found. So, we just don't think that's the best way forward. This is a straightforward, simple way to make a balance between the rights of the landlord and the rights of the tenant.
I just want to say as well, Chair, if you don't mind, because this is a really common thing that people say to me and I think it's not understood: this is not taking away any of the grounds where a tenant has done something wrong. So, if the tenant has breached the contract—all of the grounds for removing a tenant who is breaching their contract, so anti-social behaviour or non-payment of rent, or whatever it is, those grounds all still exist. We're not removing any rights; all we're doing is making sure that a person who has done nothing wrong, and through no fault of their own is being made to move, has the best possible chance of getting a good place to live for them and their family afterwards.
Yes, and that would be my final question and observation on this. You rightly comment that there are lots of good landlords out there who are trying to do the right thing, both for themselves or their family, but also for their tenants as well. Do we have an idea of where poor or vexatious or aggressive use of no-fault evictions—do we have an idea of the proportion of that within the grand scheme of things? Is it 5 per cent, 3 per cent, 10 per cent, 15 per cent—do we know?
What are we trying to—? I think one is too much, but what's the scale of the problem we're trying to resolve?
Well, we have some information from a survey that the Residential Landlords Association carried out. What they indicated was that in, roughly, I think it was around 70 per cent of cases, the landlords were saying that there was some fault behind the reason they were using the section 21 notice. And over and above that, they were for selling the property or whatever else it might be, but it's very hard to actually get hard figures on this, because the landlord can issue the notice, but unless it actually gets to court, there's no actual record of the notice being issued or what the tenant does or what the circumstances were.
We do have information from Shelter Cymru where they will point to casework and they will say, 'Yes, we have instances where we think landlords are acting aggressively, if you like, in issuing the notice', but we don't have firm figures, just because of the way in which the section 21 notice procedure operates.
How would you—sorry, Chair—how would you then describe it, Minister? Are these cases few and far between? Are they too frequent to avoid taking them? If you can't quantitatively analyse them, then, how would you describe the situation in terms of the vexatious, aggressive use of no-fault evictions, from what you've heard from Shelter and others?
Most of it is anecdotal, isn't it? And I have to say, I've got casework of my own in this sphere I think—
I've spoken to a number of Assembly Members, who've also got casework in this sphere. So, I haven't collated empirical evidence around it, but I've certainly encountered this more often than I would like, in my own casework, and I know others have done so around the table. My view is that one person evicted for no good reason at all—because the landlord has found somebody who can pay better rent, which is something, certainly, that I have encountered—is one too many. So, what we want is—. It doesn't reward the good landlords anyway. You get the whole sector—.
We want the PRS to be a sector of choice. You don't want people to be afraid that, because they are in private rented accommodation, they are not going to have any security and so on. What we want to do is we want to try and eradicate that kind of anecdotal stuff running through the sector, so that people aren't scared to be in the private rented sector, and so that the good landlords come to the fore and are able to provide good service.
Unfortunately, when you are running casework systems, you don't tend to get—. People don't write to me saying how great their landlord is, and how happy they are in their house. They tend only to write to you when the opposite is the case. So, it's very hard to get that evidential bundle together. So, as I say, what we are doing is a balance between what the competing groups of people are telling us.
I just want to probe you on the approach that they've taken in England. I don't think that we should just copy England necessarily, but it's a point of reference. They will abolish section 21, which in our law is section 173, and extend section 8 to cover the issue of whether you want to move into your own home or you want to sell it. What's wrong with that approach? It does put more control, it seems to me, on this process of that being no fault of the tenant. If you leave 173 there, as you kind of indicated when you said, 'Well, you can't capture every reason why a landlord might want to use this; it would be quite a long list'—. That sounds as if it gives quite a bit of flexibility in the end for 173 to be used, and therefore for no-fault eviction to be larger than it's going to be in England, as an option.
So, 173 will stay there, and the landlord can use that as long as they follow the notice processes properly. So, we're not going behind that and saying, 'Well, why are you doing that? Are you selling your house?' or whatever. In England, they are going down that route.
So, the English system has more rigour, doesn't it? In section 8, you've got to substantiate a bit more than in our legislation.
Okay, so I've decided that I want to sell my house. You're my tenant, and I'm going to sell my house, and I tell you that, through no fault of your own, I need to sell my house. But, actually, I have no intention of selling my house. I just have somebody who is going to pay more rent. So, what I do is I list my house for sale. That doesn't cost me anything. I evict you, and then I say, 'You know what? I can't find anybody to buy my house', and I put another tenant in. How is the court going to evidence that?
I think that once the English system starts to work through, you'll find that it's absolutely riven with loopholes for how you would prove that somebody was going to. Because, actually, you could be genuinely—
That's right, but you would have certainty, and you would know that you had a long period of time in which to find yourself somewhere else to go. And you could do that the other way around. A very good landlord tries to sell their house and they want to get vacant possession—. As an aside, why isn't there a market for selling your house on with a good tenant in it? That's another story.
So, they want to get vacant possession and, actually, through no fault of their own, they can't sell the house. Are they then going to be in breach of the Act? There's way more complexity behind that seemingly simple solution than meets the eye. We've explored all of those avenues and have decided that it's just too riven with loopholes for us to have any faith in it.
—candid answer. Then, could the lawyer just remind us of section 8—what that permits in terms of anti-social behaviour at the moment, as grounds for eviction?
Section 8 of the 1988 Act?
You might be better off to answer that.
Yes. So, the 2016 Act has a breach of contract ground. Where there is a breach of contract in relation to anti-social behaviour, what the 2016 Act does is it actually inserts an anti-social behaviour term in every contract. So, where the breach of contract relates to the anti-social behaviour term, you would be able to serve notice and actually start court proceedings on the same day that you served the notice in cases of breaches of that anti-social behaviour ground, which I think is slightly quicker than you might be able to do at the moment. So, that's the way in which the—. It's a breach of contract ground on a specific term relating to anti-social behaviour.
Okay. So, it's not listed as anti-social behaviour as such. It's within a more general breach of contract—
Yes. When the landlord would serve the notice, they would have to cite what the basis of the breach of contract was. In that case, it would be a breach of the anti-social behaviour term.
So, it's got to be in your contract; otherwise, you can't use section 8.
It's section 157, I think, under the 2016 Act. Section 8 is the 1988 Act equivalent. But it's essentially that every contract has to include the 'antisocial behaviour' term. That cannot be omitted.
Just to day, Chair, that's a very good example of me having forgotten quite how radical the 2016 Act was, because when you go through again, you'll see that it's forcing into a model contract a whole series of things that I had forgotten were there, for sure.
Thank you, Chair. So, I'm back on the theme of no-one likes us. [Laughter.]
So, back on that theme, my questions are coming from—I've got two angles. One is: concern is being raised by landlords and others about concerns being raised by Shelter Cymru in particular, but it's more to do with the practical implications and how that's going to be addressed, I guess. So, some of the concerns that we've heard expressed by landlords are about long delays to possession claims. So, the question really is: what discussions has the Welsh Government had with the UK Government about court processes and what, if any, impact is the Bill likely to have upon the ability of courts to be able to deal with possessions swiftly?
Okay, I'll come on to what conversations we've had with the MOJ in a moment, but, simultaneously, with introducing this Bill into the Assembly, we're also in negotiation with all of the registered social landlords and councils across Wales about eradicating evictions from social housing. And currently, most of the possession claims in courts are actually put there by social landlords, and not by private-rented-sector landlords. So, we're pretty confident that, if we can reduce the number of social landlords starting possession proceedings in the courts, which we are very determined to do and in the process of negotiating with them, then, actually, the court system will be freed up by the removal of those possession cases. So, that's a very Welsh context to it. Then, we have been in some conversation with the MOJ. I'll pass over to Simon to talk about that.
Yes, certainly. The UK Government consulted a while ago on potential changes to the court system. There has been discussion over a number of years about a specialist housing court or a specialist housing tribunal. In fact, that was also something that was raised in the justice commission for Wales report as well. But, leaving that to one side, because that is a very big change to restructure that way, there are proposals around reducing the maximum hearing time before a case is heard, from eight weeks to seven weeks. I think the UK Government is also looking at increasing resources towards the end of the system, because a lot of the delays are actually around the operation of bailiffing work. So, looking to provide more support there. They're also looking to more widely reform their IT system. They're saying that will avoid some of the mistakes that get made in the system at the moment. So, we are aware and in discussion with MOJ colleagues about those changes, and they are being taken forward. Obviously, alongside that work, the Ministry of Housing, Communities and Local Government is looking at the reforms that it wants to bring forward on the tenancy front. So, we're very much focusing on what the court reform aspects would be.
Yes, exactly. So, it looks like there is going to be some shortening of the process as it currently stands, but our view is, actually, we're going to be significantly reducing the pressure on the courts in Wales in any case, because of the reduction in social landlord claims.
Okay. Thank you for that. Can I just move on then, quickly, to some of the concerns that have been identified around homelessness? Now, the definition of successful intervention and relief of homelessness is in the 2014 Act, and it says that,
'suitable accommodation is likely to be available for occupation by the applicant for a period of at least 6 months.'
Now, given the change in the minimum notice periods, do you plan to increase that?
So, we don't think there's any need to do that. And also, just to be clear, the six-month period for discharging the homelessness duty is much more general than that. So, you can discharge that in a number of ways, not just by putting somebody into private rented. The notice can't be served within the first six months, remember. The fact that, therefore, a tenancy must last for six months meets the duty.
So, in the first six months of a tenancy, you can't serve it at all; you can only serve a six-months notice once they've already been in the property for six months.
So, does that overcome the concerns that have been raised by Shelter Cymru about the potential impact or response from local authorities about their duty of care after 56 days? It's certainly one of the things that, in my experience, is problematic: local authorities being very quick to say, 'Fifty-six days, that's it', no duty of care, and then they end up on my doorstep.
So, I think you've probably made it very clear which council that is, Dawn, but I would just like to say that not all councils in Wales do that, and that 56 days is a backstop duty. A council that isn't doing anything until 56 days is not doing well. So, I cannot emphasise that enough. Somebody presenting as in danger of homelessness should be dealt with by their council. They should not be sent away and told to come back when the duty's triggered. So, if you have any instances of that, I'd be really grateful if you'd let me have them in some detail. I'm in discussion with the WLGA about what on earth is going on with this. We're currently revising the statutory code of guidance provided to local authorities on homelessness and allocations because we are very clear that people seeking help should not be turned away until they get to the 56 days. So, I cannot be any clearer about the fact that that is not what is intended by the Act.
Sure. And I guess my question, really, was whether the extended notice period was likely to have any impact, or should have any impact on—
So, if you're served with a notice of six months before the end of your tenancy, then you should expect a service from your local authority at that point. The fact that you're not yet at 56 days, so it doesn't trigger the absolute duty, should not make any difference to the fact that they should start to work with you to make sure that you do not slide into homelessness. That's the whole point. So, just to be really clear, we expect people to be able to access a service as soon as they have that notice served on them, and the local authority should do that. We will be making that very plain in the guidance.
Diolch, Cadeirydd. Minister, to come back to the minimum notice periods again, you've spoken about the need for balance, and obviously I see the point that you're making about how a six-month notice period is in many ways preferable to a two-month notice period, and that it's far better. Could I ask why you decided that six months was the appropriate time period, and if you think that that will protect some of the most vulnerable tenants?
So, it's just about, as I say, a reasonable time frame to allow people to access advice, find somewhere else and, for a family in particular, as I keep saying, if you've got children in a school, you want to keep them in that school. So, you're going to be looking for another place to rent in a school catchment area, which is a much more difficult thing to do than just any suitable house, obviously.
And we also want people to have enough time to make the necessary arrangements. It costs money to move. So, you may need to save up for a van or whatever it is. So, we're trying to strike that balance where there's enough time for people to get the help and support they need and make the arrangements, and not so much time that, frankly, we trigger a claim under the human rights Act because we're not allowing somebody to possess their house. So, it is that balance.
The other thing to say is that, of course, it does give people a minimum of a year, because you can't serve it in the first six months. So, what we're also trying to do is stop a rolling six-month contract, which is really problematic for people. So, the two things together are what we were looking at.
I hear what you're saying, but when you were determining what the sweet spot was, what the specific amount of time would be, was there particular evidence that you were drawing on in determining that time frame, or was it just that's what felt right?
We did have some discussions with stakeholders and we did ask a question in the consultation as well about was that a reasonable period and, broadly, there was support for that. In fact, I think even in discussions with the Residential Landlords Association, they recognised that providing a six-month notice period was not an awful thing to do by any means; it was quite reasonable. I think they may have other concerns about what's in the Bill, but, actually, giving someone six months' notice to find somewhere else to live I think even they felt was a reasonable approach.
And it also gives people a year, which I was very attracted by, because you don't want to have to remember complex time periods and so on, you just want to get on with your life. So, people think in those kinds of block times, it seems to me. So, if you go into a property and you know you've definitely got a year, that's a different feel to having to work out that you've got—. So, I was quite attracted to the simplicity of it as well, to be honest.
Thank you for that. And playing devil's advocate from the other side of the argument—and I know there is some crossover with something of what's already been discussed this morning—some private landlords and agents, as we've discussed and as you're very aware, were opposed to increasing this minimum notice period. They said specifically that it would make landlords more selective in who they rent to and more likely to sell the property. So, could I ask what your response would be to those claims, and if you think that there would be an impact on the supply of accommodation in the sector?
So, again, I don't want to dismiss out of hand claims of that sort, but it's not the first time we've heard that. Pretty much every time we've done anything, we've been told that landlords will come out of the sector and so on. Rent Smart Wales is still getting new applications for registration and licensing every day. There's no—. You know, they know this is coming. People are still registering happily, and so on. I really do think that this isn't a problem for a good landlord. This is what most people would do if they were a good landlord. It's only the ones who aren't good landlords who are going to experience a problem and, frankly, if they leave the sector, then I will not be sad.
On that point, I couldn't agree more about bad landlords leaving the sector. In terms of when a landlord can give notice, can I ask what evidence you were drawing on when you were setting out that there would be a six-month restriction on serving notice at the start of a periodic standard contract? Why did you decide that that was the appropriate time frame?
So, again, it's about giving people some certainty, isn't it? And as I said, I was attracted to the simplicity of the year, if you like. We're all human beings, for goodness' sake. If you're moving into a place, you want to have some stability in that. You don't want to be thinking, at the moment, a six-month shorthold assured tenancy is what you get. People are constantly trying to roll them over. Six months is just not enough, is it—to settle in and put your pictures up, frankly. I mean, after six months of when I've moved, I've still got boxes. So, you know, you want people to be able to settle in and feel at home in a place. So, we're trying to get to the point where somebody renting a house still feels that that's their home, they still feel that they live there properly, and they're not constantly worried that they're going to have to go away. And that balance, again, between—most of our landlords only own the one house, and so on. So, through no fault of their own, their landlord might break up, or do whatever it is that they need to—. But we want to give them that—the feeling of security, I suppose, is what we were after.
On that point, was any consideration given to almost bringing in—I don't want to use the word 'hierarchy', but bringing in a special protection for landlords where they only have one other property, where they would potentially be in that situation, which I absolutely recognise, where they could be facing homelessness? Was any consideration given to giving a special protection for those landlords who would not be evicted?
Yes, but, as I said, there are so many loopholes in that, immediately, when you think about it. I mean, I'm no expert land lawyer, and I can immediately think of at least 14 ways of getting round that. So, that's the problem. The problem is not to set up a system that you than have to put anti-avoidance measures all the way through. It's just, coming back to David's point, trying to not make the law so complex that nobody normal can understand it. And frankly, there isn't any way to do that, because there's nothing to stop you splitting off your holdings into endless companies, or relatives, or give one house to every member of your extended family or whatever. We wouldn't be able to do that. I don't know off the top of my head, but I imagine there are tax implications for all kinds of—. There are all sorts of ramifications for that. A lot of these things start off sounding simple and good, but when you start to poke them a bit, they get really complicated.
Okay, thank you for that. Moving on to break clauses, the Bill introduces a restriction on the use of break clauses in fixed-term contracts. Could you explain what the reason was for having a break clause at 18 months, because the contract holder at that point will have had more than the minimum 12 months security of tenure. So, why was it that you decided to put in that provision?
You have to look at it in the round. What we don't want is a rolling set of break clauses that effectively mean you don't have security of tenure. Again, this is a balance, isn't it, between making a landlord have some security of income and making the tenant have some security of place, but also being able to get repossession in certain circumstances. So, the Bill allows for a fixed-term contract of any length to be agreed. So, in circumstances where it would suit everybody to have a shorter period of time than that, that's fine, but what you're talking about here is a longer contract that's been agreed with an artificial break in it, so I'd query why would you do that. So, what's the need for that? If you really think you're going to need possession of your house in whatever time, why not have a fixed-term contract for that—what's the need for it? So, I just think what we're trying to do is stop break clauses being used as a rolling set of shorter contracts.
Thank you. And the Bill, as it's drafted, requires the landlord to give six months of notice at the end of a fixed-term contract. So, again, responding to some of the evidence that we've seen, and I'm sure that you will have heard as well, does that place a landlord at a disadvantage when trying to make future plans for their property in any way, would you say?
No. So, you've just got to take it into account, haven't you? So, you can have a fixed-term contract of any length, if that's what you want to do. So, if, for whatever reason, you don't want to have somebody who's a permanent tenant, who's good and is giving you an income, and you've got, I don't know, a grown-up child who might want it or some perfectly legitimate reason, you can have that fixed term, but you've just got to take into account that, if there was a shortening of that, you would need to give a six-month notice period. So, you've just got to—. Once we've got the front end of the Bill up and running, there'll be a set of instructions here for how that works, which are quite simple actually, once you've got your head around it. So, all you've got to do is take that six-month period into account.
Thank you. The final question from me: you mentioned it earlier and it's something that we've discussed in Plenary before, about why there isn't a market for selling a house—the house-plus tenant almost or the house-plus good tenant. Would there be any way in which the Government would, in the future, look to, I don't know, explore that in any way? I appreciate that that possibly would not—. It's not in the scope of the Bill as it stands, but is that something that the Government would be interested in?
I'm really interested in why there's not a market for a house that's got a good tenant with an excellent rent record in it. We were just discussing it earlier actually. I'm slightly baffled that that's not a thing. I think what's happening at the moment is that estate agents ask you to maximise your possibility by serving a notice so that you can get vacant possession, but also saying that you're happy to sell it on with a tenant in it so that you're accessing both markets. We were just discussing it, weren't we, whether there was any intervention we could make for that.
So, it's not something that you would, in any way, say 'no' to in the future.
No, I'm really interested in—. If we could do something to stimulate a market that allowed tenants to have security, then I would be really interested in doing that, and it's certainly something we're discussing with the UK. I'm going to be taking it up with various UK Ministers as well, because it's an issue across the UK, isn't it, regardless of the slight differences in the law? We've all got an interest in making sure that the private rented sector is a sector of choice and allows people to have long-term homes in it. So, having a good, secure market for a landlord that wants to sell, but wants to treat their tenants well and keep them in a home, would be a very good thing for the market in general it seems to me.
It would have certainly made my life renting in London a lot easier, so, yes.
Well, absolutely, and me too. And that's exactly the point I was making just now actually. It's really hard to understand why a house tenanted by somebody who's clearly got an excellent record and a good rental income with it isn't a good proposition. I don't really understand that myself. If anybody out there wants to explain it to us, I'd be very grateful.
I just want to come back very briefly to a point Delyth raised slightly earlier on. This going from two months to six months—going from the two months' notice, which can genuinely be an absolute crisis for a tenant, who suddenly thinks, 'Well, what do I do? I've got young children. Where do I go?', and so on. Let alone the financial things, it's the domestic situation. The six months, surely, provides something of an opportunity, along with the statutory guidance you were talking about, to do a better planned approach, including for those who present in our offices, who say, currently, 'I'm in a crisis and all I'm being offered'—albeit with a shortage of affordable rental houses with social landlords—'is five miles away, while my access to childcare'—beyond the childcare offer that the Welsh Government has got—'is my parents or grandparents down the road. I need to be close to them.' So, are you thinking through this, alongside this with the statutory guidance, how you could work with partners to develop a more planned approach, so that we avoid those crisis situations and we offer more options to a tenant?
I think that there's a whole set of things that we can do around increasing the amount of support to tenants who find themselves in that situation. We'll be working with all of our stakeholders around what we can do to get that support in place. So, there's quite a lot of stuff that we can do. Simon, are you wanting to—?
Yes. We have recently launched a pilot of a leasing scheme, working with local authorities, where local authorities will be able to lease properties from private landlords, and then the local authority effectively becomes the landlord, as an alternative option, really, for that sort of situation. So, yes, we certainly are actively looking at other ways in which we can build support around tenants who are finding themselves in a homeless situation, or indeed just providing additional support within the private rented sector for tenants who are experiencing particular problems.
We've also got a couple of schemes that my colleague Lee Waters is looking at, which are around giving grant assistance to people who have houses that are substandard. Either that person then lives in it themselves, and there are tied-in clauses about how long you have to live there, or actually releases it into this scheme. So, basically, we will bring your house up to habitable standard if you give it to the Government for five years to rent out as a social tenancy. So, we have a number of things running, attempting to make people more likely to be able to do that.
I'm very keen on the vacant property one, actually, because I think that in very large parts of Wales, there are properties of that sort that we'd be really keen to get into the market. But, then, there's just also, when you hit that crisis, making sure that your local authority steps up to the plate. So, as we discussed a little earlier, we'll be making sure that local authorities are not hiding behind the 56-day duty in terms of what help they are giving.
Diolch, Gadeirydd. Lots of the people who find themselves in a homeless situation are people who have broken up from a marriage or who are one-parent families. But, there are a lot of homes for sale that are quite affordable, were a social housing association to look to purchase them—one-bedroomed flats and two-bedroomed flats. So, why are there so many on the market, and yet the take-up from housing associations is quite low in this area, when we have got a crisis for single people or—?
So, they can do that, and some councils have been doing that. But, we are very fussy that they are then brought up to the right standard for social let, and quite a lot of them aren't at that standard. One of the things that I've been saying to a lot of private house builders in Wales, particularly the big ones—as you'll know, I rather famously said it—is that I would be very keen for them to build houses of the standard that meant that a council or an RSL could just buy them.
I actually had a really good meeting yesterday with a small house builder in Wales, who was very keen to point out that they already do that. I think that a large number of our SMEs do do that. Unfortunately, the mass house builders have not been so great hitherto, although I've had very good meetings with all of them, so I'm very pleased to say that I think that will improve in the future.
We've been very keen to say to RSLs and councils that of course they can do that. We'd like them to do that. But, actually, unfortunately, a lot of the stuff on the market isn't at the right standard, and we wouldn't want people being put into social housing in frankly substandard accommodation.
and if they're in the right place—. If they're in the right place, and the RSL or the council has a waiting list for the sort of property that's on the market, we are encouraging them to do just that. Many of them are doing that.
Yes. I wonder if I can just look at issuing notice for a no-fault notice. There's a 14-day period where that could then be reissued. Why is that?
Because people make mistakes, and we're not trying to disadvantage people who have just made an honest mistake—there's a typo in it or they have just filled it in wrong, or whatever. So, we want to give them a chance to say, 'Oh, do you know what? I've just filled in that form wrong.' What we don't want is to have people who are issuing rolling six-month notices just to make sure that there's an extant one all of the time. So, we wanted to hit a nice balance between, 'I've just got the one house, I'm not an expert, I've filled in a form wrong and I've got a chance to correct that', and, 'I'm just going to keep issuing them to make sure that I've always got six months on the go, as a way of getting around the Act.'
Well, so it's enough to seek advice and to be told that you haven't got it right, or to review it, and so on. We thought it was a good amount of time to have thought it through and realise you'd done it wrong.
However, if after six weeks you found there was a drafting error, you're going to have to wait six months before you then start the whole process again.
Well, it's an anti-avoidance thing—that's the truth of it. So, what we don’t want is for people to issue rolling six-month notices so that they can say constantly, 'Oh, well, I'll withdraw that one and re-issue it' so that the tenant is living under a constant six-month notice.
I think you mentioned this in the explanatory memorandum, that some landlords have been known to take this approach of rolling the notice. What's the actual evidence base for that? Is it a common practice?
It's only anecdotal, the evidence. It's difficult to get the evidence together. But even if it is anecdotal, my view is it's not a thing we want to have happen. So, if we can prevent it happening, let's do it. So, we are preventing it.
But the other thing you say in the explanatory memo is you think there is some jeopardy that by extending the period of notice—if you didn't cover this off—there's more chance of more rolling notices being issues. What evidence have you got for that then if it's only anecdotal?
Again, it's only anecdotal. It's hard to get hold of, but given that people do use section 21—as they are now—notices in dubious circumstances, and again that's anecdotal, I think it's a good idea to make sure that we can't have a situation in which you're living under a rolling six-month notice period.
We're just looking to increase certainty for contract holders. I can't emphasis this enough: this is about trying to make people feel secure in their home. So, if you're going to be served with a six-month notice period every week, you're never going to be secure, are you? You're going to be constantly living under the threat of being removed. And I just think that's not an acceptable way to have to live your life. The stress of living like that would be a lot, wouldn't it?
I can understand the logic you're pursuing here, though I think there are some issues there with the evidence base. We could explore that in wider evidence. But then, the restriction on a landlord just being able to issue another six-month notice after the initial period of, in effect, a year, and if you do that, then you've got to wait an additional six months and then you can issue the six-month notice—it strings it all out. There are circumstances in which a landlord genuinely might need, in that six-month period, to issue another notice. For instance, they may be becoming homeless. So, how have you balanced that out? At the minute, it's quite stark, isn't it, that even with cause, you couldn't issue another no-fault notice until that six-month period had elapsed from the last one that was issued?
It's just about the balance. So, absolutely, there may be a landlord somewhere that is disadvantaged by that through no fault of their own, but I also don't want tenants to live under a succession of six-month notices permanently into the future. And it is just about this balance, isn't it? We've hit on what we think is a balance. No doubt we could have hit on slightly different points for that balance, but we had to come to a decision about where the balance was, and this is where we think that balance is.
We'll obviously monitor it, and if we did have a succession of people who were very seriously disadvantaged by that, we'd have to look at it again. But at the moment, the evidence that I've heard, and it is anecdotal—I've got no categorical empirical evidence—and frankly, from my own caseload, is that it's much more likely to be the tenant that suffers from that than the landlord.
I was engrossed in what the Minister was saying. I do apologise.
The new Schedule 9 fixed-term standard contracts, what type of occupation contracts might be added to those exceptions? Have you thought that through yet?
Well, we could add to it if we needed to. So, if the evidence comes forward, we will be able to do that, but at the moment we don't have any intention of doing so.
No. But I'm just wondering what type of contracts might be added to that, do you think? What type of circumstances?
I don't think we have a particular circumstance in mind. It's about futureproofing the Bill and recognising the fact that the sector is changing. It has changed since the 2016 Act was brought forward. It will, no doubt, change again. So, having the ability to be able to revisit and futureproof if necessary was felt—
Without having to change laws and regulations. Okay, I understand that. And my other question, then, is about the student rental market. As you'll be aware, many students currently have a 12-month contract, but they don't have the right to occupy over the summer. So, will landlords continue to offer 12-month contracts if they might need to give a further six months? I mean, how's that likely to work, do you think?
Well, again, this is a balance, isn't it? I almost want to declare an interest, Chair, to the committee myself: the centre of my constituency is entirely inhabited by students, and I've never once had a landlord tell me the student won't leave at the end of their 12-month period, but I've had lots of students telling me that landlords are trying to get them out earlier than that or won't let them occupy over the summer, or all kinds of nonsense, to be honest. Again, it's a balance. The landlord will have to prioritise security of possession over security of income, won't they? So, they'll either have to have a fixed-term contract that gives them security of possession, or they'll have to have a longer contract that gives them security of income but not security of possession. It's a choice. Most students leave—
I can't think it's an enormous problem that they have huge numbers of students holding over after—. They just don't do that. That's not what students do.
I suppose the 12-month contract covers the academic year plus the summer, doesn't it, so—?
And in my experience, most of the students that we deal with in my constituency office have already got year contracts, and there are all kinds of arguments about what goes on during the summer months. So, again, we don't have empirical evidence in the sense of percentages and stuff, but all the anecdotal evidence is the other way on that.
Okay, Dawn. A few, or rather a couple of additional questions from me before we move on to finance matters, Minister. Section 12: could you explain to committee the purpose of that section?
So, to explain section 12, we need to look at section 126 of the 2016 Act. That provision allows a landlord to serve notice on a contract holder to vary a term of that contract if the landlord wishes to vary. The notice allows the contract holder two months, so a two-month period in which to agree to that variation, and if no agreement is reached, the contract holder says, 'No, I'm not happy', or just doesn't respond, then the landlord can treat that section 126 notice as a section 173, your no-fault eviction notice.
So, this section required amendment in light of the Bill because, obviously, we're extending notice periods from two months to six months in respect of section 173 no-fault eviction notices. So, we had to think about how we would deal with section 126. So, section 12 does that, and what it does is it removes that section because, otherwise, there would be potential for a landlord to use that mechanism to seek possession at two months' notice, which would potentially undermine the Bill provisions that extend that notice period to six months. However, extending a notice period under section 126 to six months, which might have been an alternative, to match the extended notice period under the Bill, would mean that a landlord would have to wait for up to six months to find out whether a contract holder agreed to a variation, which wasn't the favoured approach because it could be a fairly minor variation, and six months is quite a long period to wait to find out whether you can vary.
So, rather than attempt to apply two separate notice periods that would have two months of a variation and then six months for no-fault evictions, the route that the Bill takes is to remove section 126 so that if a landlord asks the contract holder to vary, and the contract holder does not agree, then the landlord can simply issue a section 173 notice and wait out the six-months notice period.
Okay, thanks very much for that. Similarly, with section 13, could you tell the committee the purpose of section 13?
Yes. So, to explain section 13, we need to look at section 121 and 133 of the 2016 Act. Those provisions provide a landlord, under a periodic standard contract and under a fixed-term standard contract respectively, with a right to exclude contract holders from dwellings for specified periods. That could be the summer period or whatever period that is specified in the contract.
Section 13 of the Bill provides for a regulation-making power to amend those sections to restrict that right of a landlord. So, section 13 provides that the Act can be amended by regulations to do the following things, so in the following ways: to provide that the right to exclude a contract holder for specified periods does not apply to certain contracts of a particular description or applies only to contracts of a certain description; to change or impose limits on what might be provided for or specified in a contract, which does include that right to exclude the contract holder; to impose requirements on a landlord to a contract, which includes a term. Now, that requirement may be that the landlord has to provide the contract holder with certain information, and that information might be setting out the contract holder's rights in respect of that exclusion period, so that is what those regulation-making powers that will be inserted into section 121 and 133 of the Act will allow the Welsh Ministers to do.
In layperson's terms, it means that universities can ask their students to vacate in order to hold conferences and so on. We would expect them to be provided with places to store their belongings and so on, but it means that in an ordinary landlord-and-tenant situation, the landlord can't get round the fact that you can't evict somebody by simply excluding them from the premises for two months for no apparent reason.
We've had a lot of concern with some of the social landlords about the use of this as well for anti-social behaviour and so on, so there may be other circumstances in which it would be beneficial to be able to exclude somebody from a tenancy, actually, in order to preserve that tenancy, because there are particular anti-social behaviour issues that require an intervention of one sort or another, but you wouldn't want to disrupt the entire tenancy, for example.
But we want to be very specific about it and not make it a wide power for any landlord in any circumstance to be able to exclude somebody.
Perhaps it may be helpful if I just clarified the sort of derivation of that exclusion arrangement. That was something that was in the Law Commission's original proposals, and, certainly, the background documentation on their proposals referred very much to it being for higher education institutions to, as the Minister said, let it out for conferences during the Easter vacation or whatever. However, in the Law Commission's draft Bill, which we then adopted, they didn't narrow down the use of that exclusion power to reflect that HEI usage.
So, when we're looking at what we're doing now in terms of increasing the notice period to six months, we think there's potentially the ability for that to be abused by other landlords, as the Minister said, to get people out early or whatever. So, our primary intention will be to look at regulations to limit that to the use of higher education institutions. We will obviously need to consult. There may be some other possible situations out there that merit that type of exclusion arrangement. I can't say I've got a firm grip on those, but that's why we need to consult before we bring forward regulations.
Diolch, Cadeirydd. The regulatory impact assessment sets out potential cost to landlords and letting agents of familiarising themselves with the forthcoming legislation. Could you tell me what assessment you've made of these potential costs to these groups no longer able to use section 173 as the faster alternative to other possession grounds?
So, the RIA provides details of the estimated cost to landlords, including lost rent in the event that a contract holder pays no rent other than when first taking the contract, for example. There are lots of options for regaining possession, so we've done estimated approximate costs associated with the three routes set out there. It includes the cost of applying for possession, but legal costs are not included in the calculations, and that's because they're not a requirement, so some landlords might want to instruct a lawyer to do that, but it's not necessary. You haven't got to and many landlords don't do it, so we haven't included that.
I'm going to defer to Emma and Simon in a minute, but it's one of those things where it's difficult to give a reasonable estimate of the landlord/letting agent sector as a whole, because there are just the most myriad of different circumstances and arrangements out there, so trying to hit on a sort of average or a whatever has proved problematic, I think it's fair to say.
Indeed, and there's not a huge amount of very firm data about cases. If cases don't go to court, there is a different level of data available for us to work on, so the RIA has taken a best-effort cost estimate of what we think the different costs are for different routes to possession. I don't know if you want to add to that.
Yes. I would just point to—I think it's paragraph 8.32 in the explanatory memorandum—where we've identified those three options, so basically the options for landlords are to issue the six month 173 notice at the end of the initial six months of occupation. Clearly, they're then having to wait six months, and this is really looking at the impact on rent arrears to the landlord, I suppose. So, then, in that situation, yes, the landlord would then be building up further rent arrears if the tenant wasn't paying rent.
The other options, of course, are to issue a notice under section 181, which is the serious rent arrears ground that is carrying on, as it is at the moment, in the 2016 Act, or, indeed, to issue a claim under the breach of contract ground. So, those time periods are much shorter because they're not going to be associated with that longer six-month notice period. So, the ultimate situation will depend on the decision of landlords. Do they want to wait the six months out for the section 173 notice or are they—? And I suppose what we expect them to be doing, is, actually, going down the more appropriate route, which would be to make a rent arrears claim or a breach of contract claim.
Thank you. So, one of the reasons the Welsh Government has given for the delay in commencing the 2016 Act in negotiations with the Ministry of Defence is over additional costs. So, given that the RIA states that additional costs to the Ministry of Justice are unknown, what efforts have you made to work with them to understand potential costs and to avoid potential further delays?
Perhaps it's worth flagging—some of the issues that we discussed earlier around the changes to court IT systems and so on, under civil procedure rules et cetera, all of that falls out of the 2016 Act as opposed to this Bill. So, this Bill, of itself, is not going to require, we think, further changes of that sort, or certainly not significant ones. There will be the potential for more hearings that we referred to earlier, but when we set that alongside the significant reduction that we're expecting to take place in terms of social landlord hearings, our view is that the overall effect is negligible, really, of those two things. And that's the position that we've set out to the Ministry of Justice.
Okay. Well, if no Members have further questions, it only remains for me to thank you, Minister, for coming in to give evidence today and to thank your officials for coming in to give evidence today. You will be sent a transcript in the usual way to check for factual accuracy. Diolch yn fawr.
Our next item, item 3, is papers to note. We have three papers to note, all of which are relevant to the Local Government and Elections (Wales) Bill. One is from the Electoral Reform Society, one from the Welsh Local Government Association, and one from Cardiff city council. Are Members content to note those papers? Thank you very much.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Item 4 is a motion under Standing Order 17.42 to resolve to exclude the public from the remainder of today's meeting. Is committee content so to do? Okay, thank you very much. We will move into private session.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 10:43.
The public part of the meeting ended at 10:43.