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Welsh social landlords need to ‘take rough with the smooth’ under new legislation as non-compliance was mistake on their part, court hears
Welsh social landlords have been told they cannot pick and choose how parts of the Renting Homes (Wales) Act apply after an issue of non-compliance was discovered that could cost the sector tens of millions of pounds.
Ranjit Bhose of Cornerstone Barristers, who was acting on behalf of all defendants in the case – which include the Welsh government and tenants – explained to the court why the sector in Wales should accept the consequences set out in the legislation.
Speaking on day two of the case at the Business and Property Court in Cardiff, he said: “I’m not suggesting they don’t take their obligations seriously. But they are subject to legislation where there are bad landlords so they have to take the rough with the smooth.
“The adverse effect of non-compliance is also remediable by the landlord in a matter of days, and this is in a context where it is always in the landlord’s knowledge and whether they have or have not complied, and is always in their power to comply.
“[It is] only where a landlord fails or chooses not to comply, or not to rectify non-compliance over a long period of time, that higher adverse financial costs mount up.”
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Mr Bhose also said that a uniform approach to legislation is needed, because a situation where the act’s application is decided on a case-by-case basis by a court may not provide sufficient protection to residents, who are arguably the least likely to take part in legal proceedings.
The issue centres on whether tenants should be refunded rent because of their landlord’s failure to provide them with a physical confirmation of electrical safety certificates.
The court heard on the previous day from Justin Bates of Landmark Chambers, acting on behalf of landlords Coastal Housing, Tai Calon, Valleys to Coast and Bron Afron.
He said: “Can a rational legislature really have intended that consequence? We say the answer is no.”
The case could be significant as landlords may have to pay back rent to tenants for the period in which the certificates were not issued, potentially costing the sector tens of millions of pounds.
But Mr Bhose said: “We are here because these four claimants have failed to comply with a simple requirement in the first few months of the regulation’s operation.
“We doubt very much they will fail to comply in future because the stick is, we accept, a big stick, because it ensures compliance – and that is the reason, we say, why it’s being imposed.
“We understand the concerns the complainants have. But even if we accept their contention that non-compliance would result in rent not being required to be paid, we are still troubled as to why there has been non-compliance.
“And what is striking from the witness statements put forward by the claimant landlords is that no real reasons are given, other than it was just missed.”
In response, Mr Bates said that the landlords knew they had made a mistake by not issuing the certificates and it was one they were “hugely sorry for”.
On the previous day, legal teams acting on behalf of the landlords set out why they believed it was not clear either from the consultation on the act, or the subsequent legislation, whether the legislation would have the consequence being tested in court.
However, Emyr Jones, from Civitas Chambers, acting on behalf of Welsh ministers, defended the legislation as a “much simpler and more transparent approach than the old system”.
He added: “This is empowering contract-holders.”
On day one, acting on behalf of the landlords, Sarah Salmon of Cornerstone Barristers sought clarity on the definition of a dwelling and how the act may apply to communal areas in a building where landlords have an interest in the property.
This is because communal areas are normally covered by a service charge, not a tenant’s rent, so clarity was needed on what contractors have a duty to inspect under the act and how that would impact the issuance of safety documents and the ability to withhold rent.
Tara O’Leary of Cornerstone Barristers responded on day two on behalf of all defendants, with a view that residents should also be provided with documentation from communal spaces because there is a similar risk associated with electrical fittings in those areas.
Ms O’Leary set out that residents could also be at a disadvantage as they might not be aware of the state of those appliances.
A ruling is expected in the next term of the legal year, which is sometime between the start of October and the end of December.
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