Your Renting Homes Wales (2016) Act questions answered: “How do I convert existing ASTs to standard occupation contracts?”
If you are currently self-managing a rental property or portfolio, you’ll want to take great care to ensure your own contracts are up to scratch by the deadlines stated in the new laws. Here are some answers to the questions myself and the team have been responding to over the past few months.
How do I create a new contract commencing on or after 1st December 2022?
You’ll be able to use the template model written statements (MWS) that have been issued by the Welsh Government as a guide:
MWS for standard fixed term contracts
MWS for periodic contracts
Please note that there’s no obligation to use these, they simply act as a straightforward starting point that Welsh Government made available because they had to. Using them may put landlords in a disadvantageous position as they contain clauses that are heavily weighted in favour of the contract-holder (tenant).
Default terms have been set out within the Act – key matters, fundamental terms, supplementary terms and additional terms. It’s vital that you familiarise yourselves with exactly what these terms mean.
Note: You must issue contract holders with a written statement no later than 14 days after moving in. Failure to provide one within 14 days, or providing an incorrect/incomplete statement, can result in financial and restrictive penalties.
How can I use the model written statements to help convert my existing tenancies?
On 1st December 2022, all existing tenancy agreements automatically ‘convert’ to occupation contracts. The process of converting is a great deal more time-consuming than creating a brand new one. You’ll need to look at each of your existing tenancy agreements and perform a detailed 'compare and contrast' exercise, reviewing all of the terms in the current tenancy against those in the MWS.
During the process, you’ll need to consider which terms should be part of the new contract and whether the existing terms are compatible with the fundamental terms required to be included within the contracts:
- You’ll need to remove any existing terms which are incompatible with the fundamental terms you can see outlined in the applicable MWS.
- Consider carefully whether any existing terms are incompatible with the supplementary terms outlined. If they are, make sure that the supplementary terms are omitted and the existing terms are kept in.
- After this comparison process, assess whether any remaining terms (i.e. any that are neither supplementary nor fundamental) still need to be included and, if so, they will be need to be added as additional terms.
Further guidance for landlords on converting contracts is available from the Welsh Government website. We recommend having a thorough read of the information in Schedule 12, which outlines special provisions regarding existing tenancies.
How long do I have to provide a statement of the converted contract to contract-holders?
You will have until 31st May 2023. As previously mentioned, we’ve already begun our own conversion processes and would urge you to do the same if you manage your own properties, especially if you have a particularly large portfolio.
Could I benefit from appointing a managing agent to help me navigate the Renting Homes (Wales) 2016 Act?
What I’ve outlined above may sound a lot to take in, but it’s only one small part of a number of new laws you’ll need to comply with in advance of 1st December. If you’re complacent or don’t meet certain deadlines, you might find your properties being deemed “unfit for human habitation”, unable to reclaim possession and/or face hefty fines.
If you’re currently self-managing, now is the time to evaluate your liability as a licensed landlord and do some research into the benefits of working with a managing agent. Just think - no more evenings spent bogged down in paperwork and legislation, no more juggling certificate checks, renewals and inspections and absolutely no more weekend phone calls from a tenant letting you know the boiler isn't working (again)...!
With all of those distractions gone, you’ll have an abundance of time freed up for the things most important to you, all the while feeling confident that your investment is protected and left in capable hands. The right agent won’t just leave it at that either – they’ll be determined to see it to flourish and achieve its maximum potential, year after year.
If you are considering instructing a managing agent, let’s arrange an informal chat and we can go over your questions, concerns and individual needs as a landlord. Please give me a call on 02920 668585, or email liane.loat@cpshomes.co.uk.
