EXPLANATORY NOTE
(This note is not part of the Regulations)
Chapter 3 of Part 2 of the Renting Homes (Wales) Act 2016 (anaw 1) (“the 2016 Act”) introduces the concept of fundamental provisions which are:
(a) provisions of the 2016 Act; and
(b) other provisions which are fundamental provisions by virtue of section 22(1)(a) of the 2016 Act,
that are incorporated as terms of occupation contracts or particular kinds or descriptions of occupation contract (subject to sections 20(1) and (2) and 21 of the 2016 Act) and so form part of the contract between a contract-holder and a landlord.
Once a fundamental provision is included in an occupation contract, it is referred to as a “fundamental term” of the contract.
Section 20 of the 2016 Act allows landlords and contract-holders to agree not to incorporate fundamental provisions into an occupation contract (subject to certain exceptions). However, this is subject to the test that non-incorporation of the term would improve the position of the contract-holder. Landlords and contract-holders are also able, by agreement, to modify fundamental provisions, provided that the modification would improve the position of the contract-holder (again, subject to certain exceptions).
Section 22(1) of the 2016 Act enables the Welsh Ministers to make regulations which specify that any provision of any enactment is, or is not, a fundamental provision applicable to an occupation contract.
Regulations 3 and 4 of these Regulations provide that sections 104 (secure contracts: variation of rent) and 123 (periodic standard contracts: variations of rent) of the 2016 Act are not fundamental provisions of occupation contracts that are housing association tenancies (within the meaning given by Part 6 of the Rent Act 1977 (“the 1977 Act”)).
Regulation 5 makes consequential amendments to sections 104, 123, 252 (minor definitions) and 253 (index of terms) of and Schedule 1 (overview of fundamental provisions incorporated as terms of occupation contracts) and Schedule 12 (conversion of tenancies and licences existing before commencement of Chapter 3 of Part 10) to the 2016 Act.
Regulation 6 makes consequential amendments to section 93 of the 1977 Act (increase in rent without notice to quit) and inserts a new subsections (2A), (2B) and (2C). Subsection (2A) provides that where a housing association tenancy is a secure or periodic standard contract, the rent payable to the landlord (meaning a housing association, housing trust or the Welsh Ministers) may be increased, from the beginning of any rental period, by a written notice specifying the date on which the increase is to take effect and given by the landlord to the contract-holder not later than four weeks before that date. New sub-section (2B) provides that a notice of increase does not take effect if, before the date specified in the notice, the contract-holder gives notice to end the contract. New subsection (2C) further provides that the notice of increase will take effect if, before the date specified in that notice, the notice to end the contract ceases to have effect under section 167(3) or 172(3) of the 2016 Act.
The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to these Regulations. As a result, it was not considered necessary to carry out a regulatory impact assessment as to the likely costs and benefits of complying with these Regulations.