How can landlords comply with the Renting Homes (Wales) Act?

In December 2022, nearly all the key aspects of renting property in Wales changed. Occupation contracts, in replacement of tenancy agreements, were introduced. Changes were made to succession rights, minimum contract and notice requirements, and joint contracts. Also, new rules ensuring properties are fit for human habitation came into force.

The Welsh Government says that the new law means a simpler system for landlords.

Overall, the law on renting property in Wales now includes higher standards for properties in the private rented sector. We’re only giving a brief summary here, as a detailed account is available online from the Welsh Government.

Replacing old-style tenancy agreements with occupation contracts.

All new lets since 1^st December 2022 must be under a new-style occupation contract. All existing tenancy agreements must be converted to new-style contracts as of 1^st June 2023.

Changes to rental housing notice periods

Landlords who want to regain possession of their property for no specific reason now need to give tenants six months’ notice. Landlords won’t be able to give notice until six months after the contract starts, and only if they’ve registered with Rent Smart Wales (which is mandatory in Wales) and follow deposit protection rules.

If a tenant breaches their occupation contract, the landlord will still need to give one month’s notice. For serious issues such as anti-social behaviour and rent arrears, the minimum notice period could be shorter.

Property condition

Landlords must ensure their property is ‘fit for human habitation’. Most will already be doing their best anyway, but do be sure not to get caught out by the detail of the new regulations which include:

This includes:

• completing regular electrical safety tests

• fitting working carbon monoxide alarms and smoke detectors

• keeping water, gas, and electricity supplies in working order

• keeping the structure and exterior of the property in good condition

Succession rights in Welsh rental properties

Tenants now benefit from improved ‘succession’ rights and landlords have more clarity around who has a right to continue living in a rental property if, for example, the current tenant dies.

A successor can include a spouse or civil partner, or other family member, of the contract holder or have been living with the contract holder as their principal home before the contract holder’s death. In some cases, a carer may become a successor to the contract if they were living with the contract holder.

Making joint tenancies simpler

The Act also makes life easier for both landlord and tenant when there are joint contract holders, so there’s no need to create new contracts when tenants change. A tenant may add another person to be a joint contract-holder, with permission of the landlord, under the same occupation agreement. They become jointly liable to the obligations set out in the contract from the day they become a joint Contract Holder.

A joint contract holder who leaves the tenancy will still be liable for anything accrued while they are party to the contract.

Is this the way ahead for the private rental sector across the UK? Landlords everywhere will be watching with interest.

In Scotland, assured shorthand tenancies have already been replaced with the Private Residential Tenancy (PRT) in 2017. The PRT is has similar aims to the occupation contract in that it aims to give tenants more security.

The Renters (Reform) Bill in England, introduced into Parliament on 17th May 2023, includes plans to end of Assured Shorthold Tenancies and ban ‘no fault’ Section 21 evictions.

Along with providing a good home and thorough tenant referencing, a clear agreement between landlord and tenant can help to avoid arguments. Time taken to go carefully through your occupation contracts will be well spent!

The terms of the occupation contracts can include:

• Key matters: the names of the parties and address of the property. These must be inserted in every contract.

• Fundamental terms: cover the most important aspects of the contract, including the possession procedures and the landlord’s obligations regarding repairs.

• Supplementary terms: deal with the more practical, day to day matters applying to the occupation contract. For example, the requirement for a contract-holder to notify the landlord if the property is going to be empty for 4 weeks or more.

• Additional terms: addresses any other specifically agreed matters, for example a term which relates to the keeping of pets. Any additional terms must be fair, as required by the Consumer Rights Act 2015.

You can see the Welsh Government’s modern written statement templates for guidance.

There are various risks associated with letting a residential home. Keep your investment safe, whether it’s a single property or a portfolio. Our comprehensive Landlord Insurance can help protect you from financial risks, including accidental and malicious damage by tenants and loss of rent if the property becomes uninhabitable due to an insured event.

The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Just Landlords accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.

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