Group 1: Prohibited payments — termination of contract (Amendments 3, 4, 6, 7, 8, 10, 23, 24, 1, 2)

Part of the debate – in the Senedd at 5:02 pm on 19 March 2019.

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Photo of Julie James Julie James Labour 5:02, 19 March 2019

Thank you, Dirprwy Lywydd. Amendments 1, 2, 3, 4, 6, 7, 8 and 10 have been tabled to address recommendation 6 made in the Equality, Local Government and Communities Committee's report. They ensure that fees for exiting an occupation contract are prohibited. In particular, I'd wish to assure Members that the amendments prevent the type of check-out fees that tenants sometimes face when they end their tenancy; they are absolutely prohibited. However, there are situations where payments are permitted, such as where a contract holder terminates a fixed-term contract early or wishes to leave without providing the required notice under the contract by means of negotiation with the landlord.

We do not want to be in a position where a contract holder, if their circumstances change and they want to move elsewhere, is tied to a contract. Therefore, if the landlord and contract holder agree an amicable way out, agreeing a payment for early release from the contract or for releasing the contract holder from their notice obligations under the contract, then we should not prevent this.

The effect of the amendments to sections 2 and 3 of the Bill will ensure that contractual payments after the exiting of a standard occupation contract are prohibited. The inclusion of the wording in relation to payments pursuant to a term of standard occupation contract prohibits exit payments being required once a contract comes to an end. These amendments address Members' concerns about whether or not exit payments are prohibited in the Bill. Exit or check-out fees habitually charged by an agent or landlord at the end of the contract for things like collecting keys, cleaning or inventory checks will be prohibited. I accept Members' concerns that there should be no ambiguity regarding payments when exiting a contract and that payments for an exit fee were unclear. I want to leave no room for ambiguity and so I've brought forward this series of amendments. The amendments, as a package, will remove all doubt.

More particularly, payments where a contract holder wishes to terminate a contract early, such as the balance of any outstanding rent, would be permitted on the basis that they are not made in consideration of the grant renewal or continuance of the contract, but made in consideration of termination, and so will not be caught by the prohibitions.

In summary, amendments 1, 2, 3, 4, 6, 7, 8 and 10 make amendments to sections 1, 2 and 3 to prohibit exit fees. I hope that Members will support these changes. The Stage 2 amendments made to section 17 will be moved by David Melding's amendment 46, if agreed, into the new Schedule 3, so that the amendments to the Renting Homes (Wales) Act 2016 are all together. Amendments 23 and 24, as tabled, are a precaution should amendment 46 be rejected. I therefore ask Members to support these amendments.