On 1st December 2022, the Renting Homes (Wales) Act 2016 came into force, with landlords given a grace period of six months to comply with the new legislation.
The new law applies to all new and existing tenants (as long as the tenancy started after 15th January 1989) and new paperwork was needed to be issued by landlords for every tenancy, before the 1st June 2023. Each tenant needed to be provided with a written statement of terms, regardless of any previous written agreements i.e. tenancy agreements, already in place – the deadline has now passed for doing this, so if you haven’t done it yet, you must do so straight away.
New agreements: Occupation contracts
In Wales, most tenancy agreements are now to be known as “occupation contracts” and the tenants are now called “contract-holders”. The change to legislation simplifies things, as there are now just two types of housing contract: a ‘secure’ contract for social housing and a ‘standard’ contract for private rentals.
An occupation contract must be issued to the contract holder within the first 14 days of occupation for new rentals. For existing rentals, an occupation contract that meets the new requirements should have been issued before the deadline of six months after the legislation change, so no later than 31st May 2023.
Failure to have correctly issued an occupation contract within the deadline can result in financial penalties and can also mean that landlords trying to gain possession of the property back might find this more difficult. We advise that if you haven’t done so already, that you issue the new paperwork as soon as possible.
New terms for landlords to abide by
A major change introduced by this new law is that contract-holders must be given six months’ notice for a no-fault termination of the contract.
If there is a breach of the occupation contract by the contract-holder, the minimum notice period they can be given is one month. In the case of serious rent arrears or breaches related to anti-social behaviour, this notice period can be shorter.
Notice cannot be given by a landlord earlier than 6 months into the contract and the rules around break clauses have also changed. Landlord break clauses can only now be included in a fixed-term occupation contract that is set to run for a minimum of 2 years, and they cannot be used during the first 18 months of the fixed term.
Where there is a joint occupation contract in place and one of the contract holders wishes to leave or add an additional occupier, this can be actioned without the requirement to end the current contract and issue a brand new one.
There are also now additional rights in respect of succession for occupational contracts, meaning that family members and other occupiers who also live at the property have some protection.
If your rental property is abandoned by the contract-holders, you can now serve a 4-week notice period, alongside investigations taking place to ensure that the property has indeed been abandoned. This means that you no longer need to obtain a court order to repossess the property.
FFHH: Fit for Human Habitation
All rented properties must be fit for human habitation and safe for the contract-holder to live in.
They must also have:
- A carbon monoxide alarm fitted in each room that contains a gas appliance, an oil-fired appliance or a solid fuel burning appliance
- A mains wired smoke alarm on each storey of the property, which is linked to the other smoke alarms in the building
- A valid Electrical Condition Report (renewed every five years).
New rentals need to have the above in place before occupation starts, whereas landlords have until 1st December 2023 to comply with the new requirements for existing agreements.
Landlords also need to ensure that all fixtures and fittings are in good safe working order, as failure to do so could result in the occupier’s right to withhold rent.
What does an occupation contract need to include?
Occupation contracts must include:
- Key matters, such as the names of the parties and the address of the property
- Fundamental terms, such as possession procedures and the maintenance obligations of the landlord
- Supplementary terms including the day-to-day practical terms of the contract, such as when the contract-holder needs to let the landlord know about a repair or maintenance issue, or if the property will be empty for over four weeks
- Additional terms that apply specifically to the property and agreement, such as if the contract-holder is permitted to have pets.
Occupation contracts can be issued either as a hard copy or, if the contract-holder agrees, via email.
Using a Lettings Agent? Check they have complied with the new rules
Since 1st June 2023, we have started to encounter issues with lettings agents making fundamental errors with converted contracts, putting Landlords at risk of claims from their tenants, or potentially preventing the Landlord from evicting the tenant. If issues are discovered, you should proactively take steps to correct the errors. You may be able to pursue your lettings agent for any losses they have caused to be incurred due to their negligence and failures to comply with the new legislation.
How can we help?
All landlords with rental properties in Wales need to comply with the new legislation and if you haven’t already, you must make sure that you carry out the required actions right away.
At Harding Evans, our expert team of solicitors are happy to help and advise on the Renting Homes (Wales) Act 2016, allowing you to remain compliant.
If issues are found that were not your fault due to reliance on a professional lettings agent, we can assist you in pursuing any losses caused. Contact us today.
