On 1st Dec 22, new legislation came into force in Wales that could potentially have a significant impact for landlords in 2023 and beyond.
The new law affects all new and existing tenants (as long as the tenancy started after 15th January 1989) and means that new paperwork needs to be issued by landlords for every tenancy. Each tenant now needs to be provided with a written statement of terms, regardless of any previous written agreements i.e. tenancy agreements, already in place. This will mean that all of the information will be in one place, making things easier for tenants to keep track of.
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 means that there are now just two types of housing contract to simplify things.
For social housing, this will be a ‘secure’ contract and for the private rental sector, this will be a ‘standard’ contract.
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 needs to be issued before the deadline of six months after the legislation change, so no later than 31st May 2023.
Failure to correctly issue 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.
New terms for landlords to abide by
A major change introduced by this new law is that contract-holders (for contracts starting on or after 1st December 2022) 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 at least 2 years, and 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 which means 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 are no longer required to obtain a court order to repossess it. Instead, you can now serve a 4-week notice period, alongside investigations taking place to ensure that the property has indeed been abandoned.
All rented properties must be fit for human habitation and safe for the contract-holder(s) 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. With existing agreements, landlords have until 1st December 2023 to comply with the new requirements.
In addition to this Landlords are required 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 payments.
What does an occupation contract need to include?
Occupation contracts must include the following:
- Key matters, such as the names of the parties and the address of the property
- Fundamental terms, such as the possession procedures and the repair/maintenance obligations of the landlord
- Supplementary terms, which include the day-to-day practical terms of the contract, such as when the contract-holder is required to notify the landlord e.g. if there is a repair needed, or if the property will be empty for four weeks or longer
- Additional terms, which include any other matters relating to the specific property and agreement, such as if the contract-holder is permitted to have pets.
Occupation contracts can be issued as a hard copy or, if the contract-holder agrees, via email.
Landlord responsibilities in 2023 and beyond
This change means that action is required for all landlords in order to comply with the new legislation. The new requirements and responsibilities might seem daunting, and the deadlines in place mean that landlords do not have much time to ensure that everything they need to do is actioned.
At Gamlins Solicitors LLP we would be happy to help and ensure that you are not caught out by the changes. Contact us on 01492 532275 today.
