Significant Implications for Landlords in Wales Following High Court Judgement

November 19, 2024

By Siôn Fôn

Landlords in Wales are likely to face substantial implications following a recent High Court judgment.

In the case of Coastal Housing Group Ltd & Ors v Mitchell & Ors, it was held that a failure to provide an electrical condition report (ECR), as required under the Renting Homes Wales Act 2016 (RHWA), will deem a property as unfit for human habitation, providing contract-holders a right to refuse to pay rent.

It is essential for landlords to understand the implications of this judgment to avoid the significant financial consequences of any non-compliance. Our property experts outline key considerations that landlords should take note of:

Summary of the recent case

The claimants were registered social landlords, who had provided occupational contracts to the contract holders, the defendants. The claimants were aware of their obligation under the RHWA to provide an ECR to contract-holders. The issue in question was whether contract-holders would be entitled to withhold rent where a landlord failed to provide them with an ECR.

The main findings of the case

1. It was found that a failure to provide an ECR certificate will make a property unfit for human habitation. This was not a requirement to merely commission a report, but to physically hand it to a contract-holder
2. It was also held that when a premises is deemed unfit for human habitation, the contract-holder is granted a right to refuse to pay rent
3. Therefore, the judgment confirms that where a landlord fails to provide an ECR certificate to a contract-holder, a contract-holder has the right to refuse to pay rent
4. The landlords in this matter had commissioned the reports but had failed to hand them to the contract-holders within the necessary timeframe. The judgment confirms that the ECR must actually be provided to the contract-holder in order to be compliant

Lessons for landlords

This judgment certainly outlines the importance of complying with the obligations which the RHWA places on landlords. For large social landlords, a failure to physically provide their contract-holders with an ECR could put a lot of money at stake. Generally, landlords can take the following lessons from the judgment:

The importance of complying with statutory obligations –

• a failure to do so risks the property being deemed as unfit for human habitation

The financial implications of non-compliance

• – landlords should understand that not complying with their obligations can have a substantial financial impact as it can allow contract-holders to withhold rent

The need to fully understand the extent of any obligation –

• for example, merely commissioning an ECR report was deemed insufficient. Landlords must be careful to comply with the full extent of their obligations to avoid any breach of the regulations

Coastal Housing Group Ltd & Ors v Mitchell & Ors is certainly a significant judgment for landlords in Wales. Landlords should now be proactive to ensure they are fully compliant with the RHWA regulations to avoid any implications of non-compliance.

If you require advice or assistance on any of the above, contact Siôn Fôn on 029 2082 9107 or sfon@darwingray.com for a free initial chat to see how we can help you.