New Laws for Tenancies in Wales
What is The Renting Homes (Wales) Act 2016?
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The Renting Homes Act is set to change housing law in Wales as we know it, drastically improving the way we rent, manage, and live in rented homes.
Who is affected by the new law?
Simplified: Social and private tenants will see changes in how their contracts are provided, homes are maintained, and communication with landlords. All landlords, including those who use management companies or agents to rent out properties, will need to comply with the new law by making necessary updates.
What happens to my Welsh buy-to-let properties when the new law comes into force?
The new law will introduce 'occupation contracts', which will supersede existing tenancies and licences.
There are two types of occupation contracts: standard and secure. Standard contracts replace assured shorthold tenancies, which are currently used mainly in the private rented sector. Similarly, secure contracts will replace the current secure tenancies held mostly by those in the social rented sector.
On December 1, 2022, all current tenancy agreements will automatically become occupation contracts.
For example, if an existing tenancy is a fixed term assured shorthold tenancy, it will convert to a fixed term standard occupation contract. If it is a periodic assured shorthold tenancy, it will convert to a periodic standard contract.
Although an occupation contract can start with a verbal agreement, it must be backed up by a written statement of the contract. Written statements for new contracts from December 1, 2022 onward must be given within 14 days of the occupation date . For converted contracts, written statements need to be issued by June 1 2023.
There will be significant changes to Section 21 in Wales
Section 21 is the most common type of notice that landlords give to end a tenancy is known as a Section 21. This procedure, which is set out in Section 21 of the Housing Act 1988, applies only to assured shorthold tenancies. Landlords are not required to provide tenants with the reason for eviction under this section.
Can I still evict a tenant without citing a fault on their part (currently done using a ‘section 21 notice’)?
A 'no-fault' notice, called a Landlord's Notice under section 173 of the new law, can still be issued to end a periodic standard contract. This means that landlords are able to regain possession without needing to provide justification. For contracts signed before December 1st which convert into periodic standard contracts on that date, a two-month no-fault notice period will become effective after December 1st.
For fixed term tenancies that convert to a periodic contract on December 1st, if the landlord doesn’t issue a two-month notice seeking possession at the end of the fixed term, a six-month notice will apply to the periodic contract.
The six-month notice period will only be in effect for occupation contracts rented out on or after 1 December 2022. In addition, a section 173 notice cannot usually be served during a fixed term standard contract (for example, a fixed term AST) and can only be served during a periodic standard contract after the first six months of occupancy. Therefore, someone who doesn't violate the terms of their contract is allowed to occupy the space for at least one year from the day their new contract starts.
If a tenant is not paying rent or is being disruptive, under the current law I can ask them to leave quickly without going to court. Will I still be able to do this if I use a section 173 notice?
The answer is no. The new law was created to inspire landlords to find an adequate playground for their tenant (or 'contract-holder') that abides by the rules of the contract, instead of depending on a 'no-fault' notice. With this change, it will be a more equitable system which gives the contract-holder permission to battle a possession claim if they believe it's being done unjustly.
Would it be possible to issue a six-month fixed term contract instead?
You can set the length of a fixed-term contract, but if no new agreement is reached before the end of that term, it automatically becomes a periodic standard contract. Importantly, you cannot usually end a fixed-term contract by issuing a Landlord’s Notice during the Fixed Term period.
What are the new notice periods under the Renting Homes (Wales) Act 2016?
The Renting Homes (Wales) Act 2016 goes into effect December 1, 2022. For new occupation contracts, the minimum notice period is six months. However, current tenancies converting from assured shorthold tenancyASTs to occupation contracts have a shorter minimum notice period .
Converted periodic tenancies
- If the tenant has been occupying your property for more than four months, you can follow the 'Section 21' process - giving two months notice and using the RHW17 form from Section 173 of the Act. However, this must be done by 1st June 2023. If it's after that date, you'll have to give six months notice instead.
Converted fixed-term tenancies
- You can give two months' notice to your tenant using the prescribed form RHW38, as long as they have occupied the property for at least six months. This form must be served before or on the last day of the fixed-term, and it cannot require possession before the last day of that term. You only have until 1st June 2023 to do this; after that date, you will need to give six months' notice instead.
- If the fixed-term expires, you are unable to give two months' notice. The new periodic contract (or if a new fixed-term has been agreed upon, that) will automatically be set to six months' notice by default. If it is a new fixed-term contract, during that term you cannot serve possession notices.
How can I transition my current AST agreements to standard occupation contracts?
If you are currently self-managing a rental property or portfolio, it is imperative that you take the necessary measures to ensure your contracts are up to date and compliant with the new laws.
The Welsh Government has created template model written statements (MWS) that you can use as a guide. Please note that you don't have to use them, and in fact, doing so may put landlords at a disadvantage because the clauses included favor the contract-holder tenant. The MWS for standard fixed term contracts and periodic contracts are available below
Important: Please be aware that you must hand over a written statement to your contract holders no later than two weeks after they move in. If you fail to do so within this timeframe, or if the statement is incorrect or incomplete, then you may face financial and other penalties.
You can read more about Occupation Contracts in Wales below: