When Welsh Government finally implement the Renting Homes (Wales) Act 2016 on 1st December 2022, it will bring about a great deal of change for both landlords and tenants, not least in terminology.
- Tenants become “contract-holders”, who have “occupation contracts” rather than tenancy agreements.
- Private rented sector tenancies, such as Assured Shorthold Tenancies (ASTs), will be known as “standard occupation contracts”.
- Section 21 notice and Section 8 notices – used to regain possession of a property – no longer exist and are covered by a whole chapter of sections.
Making things clearer and consistent
The Act is said to simplify how landlords rent properties, with occupation contracts making the rights and obligations of landlords and contract-holders clearer. Central to this is the requirement for a landlord to provide a ‘written statement’ of the occupation contract to the contract-holder, as detailed in The Renting Homes (Explanatory Information for Written Statements of Occupation Contracts) (Wales) Regulations 2022.
The aim of the regulations is to provide model templates that encourage consistency in the way written statements are drafted, therefore complying with the legal requirements of the 2016 Act.
Terms that can (or MUST) feature in occupation contracts
There are four type of terms that can be included in occupation contracts:
- Key matters: These are the headline terms of the tenancy, such as names, the property address, start and end date, rent amount and a landlord’s Rent Smart Wales registration and licence number (if applicable). These must be inserted into every contract.
- Fundamental terms: These cover the most important aspects of the contract, including possession procedures and the landlord’s obligations regarding repair. Some cannot be changed and must be included as per the wording in the Act. Others can be left out or changed, providing both sides agree in writing. See our later paragraph section on fundamental terms.
- Supplementary terms: These deal with the practical, day-to-day items, such as contract-holders needing to notify the landlord if the property is going to be empty for four weeks or more. There are a number of these automatically included in the contract, though they can all be left out or changed, providing both sides agree in writing.
- Additional terms: These are specifically-agreed matters, such as the terms of keeping a pet, that do not conflict with a key matter, fundamental term or supplementary term. All additional terms must be fair, as per the Consumer Rights Act 2015.
The result of these changes is that landlords (and agents!) with properties in Wales will need to update their tenancy documents accordingly.
Fundamental terms that must be included in occupation contracts
As stated above, the legislation dictates that some fundamental terms must be included in every contract and cannot be modified in any way. These include anti-social behaviour clauses for the contract-holder, as well as the requirement to provide a valid safety certificate and provide minimum notice periods for the landlord.
Adding or removing from joint contracts
Managing joint contracts is said to be easier under the new legislation, with contract-holders able to be added or removed without the need to end one contract and start another.
This will also help victims of domestic abuse by enabling just the perpetrator to be targeted for eviction, rather than all tenants on a joint contract, as is the case currently.
What happens to existing tenancy agreements
When the new legislation comes in on 1st December 2022, existing tenancy agreements will automatically ‘convert’ to an occupation contract, and landlords will have a maximum of six months to issue a written statement of the converted occupation contract to their contract-holders. It can be issued as a hardcopy or, if the contract-holder agrees, electronically.
Want to know more? Head on over to the Renting Homes (Wales) Act 2016 or Welsh Government’s accompanying guidance.
Let CPS Homes help
We're experts on The Renting Homes (Wales) 2016 Act and are helping prepare landlords for the changes. By instructing us to manage your property, we will…
- Work with you to put efficient processes in place well in advance of key dates for new legislation and regulations, ensuring you and your properties are compliant, safe and legal.
- Save you the cost of a Rent Smart Wales landlord licence and the hassle of ongoing training.
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To discuss CPS Homes taking over management of your property, contact our Senior Property Investment & Market Advisor, Rhys Owen, today via firstname.lastname@example.org or 02920 668585.