There have been big changes in housing law in Wales in recent years since the commencement of the Renting Homes (Wales) Act 2016 (RHWA), in December 2022. 

The case of Coastal Housing Group Ltd v Mitchell and Jones [2024] EWHC 2831 (Ch) is a further significant impact on the housing sector in Wales. 

Much of the changes to Welsh Housing law have sought to address some of the issues and criticisms faced by its previous iteration and English housing law. The RHWA attempts to legislate for the significant majority of housing matters and in doing so, try at least to simplify issues. The Coastal case marks one of the first issues the RHWA may have inadvertently caused. 

The law

Section 91 of the RHWA places an obligation on landlords to ensure that a property is fit for human habitation from the date of the contract and for the duration of the contract. 

How Fitness for human habitation is determined is dealt with by section 94, and secondary legislation enacted by the Welsh Ministers. It is this secondary legislation, more specifically the Renting Homes (Supplementary Provision) Wales) Regulation 2002 which provide that a contract holder is not required to pay rent for any day on which the property is unfit for human habitation. 

The Regulations also place an obligation to ensure properties have a valid electrical safety certificate, and copies of the same are provided to the contract holder. 

Crucially for the purpose of the Coastal case, the Regulations also state that a property will be treated as unfit for human habitation for the time a landlord is not in compliance with the Regulation. 

This has caused a significant headache for Welsh landlords and critically may prove expensive with predictions of over £50 million when considering all combined contract holders.  Further, this sum excludes potential legal fees/costs.  

The claim

In the Coastal claim, it was an accepted fact that the Defendants’ landlords had obtained an electrical safety certificate, so the safety of the properties was not in question. The Landlord had however failed to provide copies of those certificates to the Defendants. They should have been provided by 14 December 2023 but were served some four to five months later. 

This, in accordance with the RHWA and supplementary regulations, could mean that the property was unfit for habitation and rent could be withheld by the contract holder. The Claimants describe this as an “understandable oversight” as a result of new laws which was “remedied at speed” once they became aware of it. 

The Claimants sought, amongst other things, (1) a declaration from the High Court that the regulations do not have the effect that rent is not payable by the Defendants (also read, other contract holders) for the period when the most recent electrical report had not been provided to them and (2) if a property is considered unfit for human habitation as a consequence of the above, that it can be remedied by the late provision of an electrical safety certificate. 

It is important to note the Defendants all held assured tenancies under the Housing Act 1985 before the RHWA came into force, following which they became converted contract holders, and that there are no equivalent provisions under the Housing Act 1985 (or Landlord and Tenant Act 1985 (as amended), sections 9A and 10),  which I am sure many English Housing Providers are immensely grateful for following this judgment. 

On the first point, the Claimants argued (in summary) the intention of the legislation was to ensure that properties were fit for habitation, rather than to ensure contract holders received documentation confirming the same.

The Defendant’s position, which was supported by the Welsh Ministers who intervened in the case, was that the legislation should apply as it was drafted and the Claimants had adequate time to familiarise themselves with the requirements of the legislation and take necessary steps to amend their procedures to ensure compliance. 

The Court found in favour of the Defendants and took a dim view of the Claimant’s position.

On the issue of remedying the breach, the Claimants took the position that once the Electrical Safety Certificate had been served, even if late, this had the effect of removing any retrospective breach. This argument may sound familiar to those keeping up to date with the various cases in recent years involving section 21 notices and late service of gas safety certificates and EPCs. Once again the Court found in favour of the Defendants and found the meaning of the legislation to be clear and uncomplicated. 

What next?

This creates a very interesting landscape for Welsh Landlords and I am confident that all (if they have not already done so) will be checking their records to ensure the requirement to provide Electrical Safety certificates is complied with, along with all other requirements which may render a property unfit for human habitation. 

Where tenants have not been provided with Electrical Safety Certificates, this Judgment confirms they are not required to pay their rent until such time that the Landlord provides them with a copy. This could leave landlords with unplanned black holes in their rental income with no recourse. It also remains to be seen (as the matter was not decided in the Coastal case), whether there could be a claim by tenants for repayment for previous periods of non-compliance. 

It is likely this matter will be considered in the new year, although it also seems the Claimants are seeking permission to appeal to the Court of Appeal which may delay a determination of the claims for repayment. This leaves many in the Welsh housing sector in a place of uncertainty. 

The Court's interpretation of unfitness for human habitation may also be ringing alarm bells for English neighbours, particularly with the introduction of its own secondary regulations under Awaab’s Law. 

Gwyliwch y gofod hwn!
(Watch this space)