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What landlords in Wales need to know about Occupation Contracts

welsh contract holders of occupation contracts
Tenants in Wales are now called contract-holders

On 1 December 2022, the rules for landlords in Wales were over-hauled. Gone are tenancy agreements, replaced by occupation contracts. Gone also are “tenants”, replaced by “contract-holders”, courtesy of the Renting Homes (Wales) Act 2016, which is now in force.

This is an overview of what landlords need to know about occupation contracts in Wales.

Updated: 14 August 2023

What are Occupation Contracts?

Aerial view of rental houses on Gower Peninsula in wales

Landlords in Wales now let to contract-holders under Occupation Contracts, and not tenancy agreements. This can either be via a fixed term standard contract or a periodic standard contract:

  • Fixed Term Standard Contract:
    • This requires both the contract-holder and the landlord to commit to a minimum term, often the first six or twelve months of occupation. After the end of this initial fixed term, the contract-holder and the landlord may agree a new fixed term and the landlord will give the contract-holder a further standard fixed term contract.
    • Alternatively, if the contract-holder remains in occupation (without a new contract) a periodic standard contract is automatically created. This will continue until either the contract-holder or the landlord brings it to an end.
  • Periodic Standard Contract:
    • Instead of a fixed term, a contract-holder might start their occupation under a periodic standard contract.
    • This rolls over from one rental period to the next (e.g. from month to month).

The Welsh government has provided model written statements for landlords.

The NRLA has prepared its own model written statements for NRLA members, which combines the fixed term and periodic contracts together into one document. This means that when the initial fixed term ends, the contract will become periodic on clearer terms, agreed up-front.

If you’re not already an NRLA member, you can join the NRLA here.

For official guides from the Welsh government, click here: Rent Smart Wales Resource Library.

What must Landlords do at the start of an occupation contract in Wales

Here’s a checklist for landlords in Wales when they enter a new occupation contract with a contract-holder, or renew an existing one:

  • Provide a written statement of the contract terms no later than 14 days after the start of the occupation. This must include all the terms (the do’s and don’ts) of the Occupation Contract.
  • Provide a current satisfactory electrical installation condition report (EICR) within 7 days of the start of the occupation.
  • Ensure a carbon monoxide detector is fitted in every room with a fuel burning appliance.
  • Check the property is fit for human habitation, taking into account the 29 matters and circumstances set out in the Welsh Guidance for landlords.
  • Provide notice of the landlord’s address for service on Form RHW2 within 14 days of occupation. If the address changes during the occupation, the landlord should inform contract-holders using Form RHW4.

Additionally, landlords in Wales must ensure that the property has mains-wired interlinked smoke alarms on every floor of the property to be used as a living space before occupation. This is different from England, where smoke alarms may be battery operated.

Landlords with tenants already in occupation on 1 December 2022 have until 30 November 2023 to obtain an EICR and mains-wired interlinked smoke alarms.

Finally, rent is not be payable for any period during which a property isn’t fit for human habitation.

What is a Converted Contract?

If someone started renting a property in Wales before 1 December 2022, and already had a tenancy agreement, it would have automatically converted into an Occupation Contract on 1 December. These are called converted contracts.

When did landlords need to provide written statements of occupation?

The landlord had until 31 May 2023 to give the contract-holder a written statement of the terms their occupation.

If the parties had agreed terms for a renewal, draft regulations published on 26 April 2023 clarified that the landlord needed to provide the terms by 14 June 2023. Here is the official guidance on the Renting Homes (Wales) Act 2023 Regulations.

If there had been a change in the identity of the contract-holder (ie the tenant) between 1 December 2022 and 31 May 2023, the landlord should have provided a copy of the written statement to them by 14 June 2023.

The NRLA has template occupation contracts that are available for members.

Final thoughts

It remains to be seen what substantive improvements the Renting Homes (Wales) 2016 will achieve from the conversion of tenancy agreements to occupation contracts. Other than the change of terminology of course, which is now less feudal-sounding. The safety improvements are mostly just catching up with the system in England (although in England, smoke alarms for single lets can be battery powered).

As a general disclaimer however, although I’ve read the relevant Welsh legislation and guidance, I’m not a specialist in Welsh law. If you’re uncertain about anything in the new legislation, speak to a Welsh solicitor.

what welsh landlords need to know about the Renting Homes (Wales) Act 2016
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