Tenancy Agreements Overhauled from 1st December 2022. Tenants become "Contract-Holders."

When the Renting Homes (Wales) Act 2016 comes into force on 1st December 2022, it will bring with it a new tenancy contract, phasing out the longstanding Assured Shorthold Tenancy (AST) Agreement.

When the Renting Homes (Wales) Act 2016 comes into force on 1st December 2022, it will bring with it a new tenancy contract, phasing out the longstanding Assured Shorthold Tenancy (AST) Agreement.

By bringing in a new standardised, uniform tenancy agreement, the Act intends to make thing simpler and cleaner for landlord and tenant. In fact, the language is intended to be more straight-forward too. The terminology will change altogether as tenants will become known as "contract-holders" and the agreement itself as a "standard occupation contract."

Landlords will need to provide a ‘written statement’ of the occupation contract to the contract-holder, as detailed in The Renting Homes (Explanatory Information for Written Statements of Occupation Contracts) (Wales) Regulations 2022. The aim is to provide model templates so as to encourage consistency in the way written statements are drafted, therefore complying with the legal requirements of the 2016 Act.

What are the new tenancy terms?

There are four type of terms that are included in occupation contracts:

Key matters: - The headline terms of the tenancy, to include names, the property address, start and end date, rent amount and a landlord’s Rent Smart Wales registration and licence number (if applicable). These must be inserted into every contract.

Fundamental terms - These cover the most important aspects of the contract, including possession procedures and the landlord’s obligations regarding repair. Some cannot be changed and must be included as per the wording in the Act. Others can be left out or changed, providing both sides agree in writing and any changes are to the benefit of the contract-holder.

Supplementary terms - These deal with the practical, day-to-day items, such as contract-holders needing to notify the landlord if the property is going to be empty for four weeks or more. There are a number of these automatically included in the contract, though they can all be left out or changed, providing both sides agree in writing.

Additional terms: -These are specific pre-agreed matters, such as the terms for keeping a pet, that do not conflict with a key matter, fundamental term or supplementary term. All additional terms must be fair, as per the Consumer Rights Act 2015.

The result of all these changes is that landlords (or your helpful agent) with properties in Wales will need to update their tenancy documents accordingly.

Adding or withdrawing a joint tenant.

The Act intends to make this process simpler with contract-holders able to be added or removed without the need to end one contract and start another.

What happens to existing tenancies?

When the new legislation comes in on 1st December 2022, existing tenancy agreements will automatically ‘convert’ to an occupation contract, and landlords (or their helpful agent again!) will have a maximum of six months to issue a written statement of the converted occupation contract to their contract-holders. This can be issued as a hardcopy or, if the contract-holder agrees, electronically.

Further reading

Want to know more? Head on over to the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 (https://www.legislation.gov.uk/wsi/2022/6/made) or Welsh Government’s accompanying guidance (https://gov.wales/fitness-homes-human-habitation-guidance-landlords-html#section-88908).

Let Bay help with the transition.

As experienced letting agents, we have helped our landlords comply with a multitude of regulation changes over the last twenty years, taking the hassle out of what can be an onerous process.

Our team are up to speed with The Renting Homes (Wales) 2016 Act and are helping prepare landlords for the changes ahead by:

• Working with our landlords in advance of the keys implementation dates to put efficient processes in place to ensure their properties are compliant, safe and legal.
• Saving out landlords the cost of a Rent Smart Wales landlord licence and the hassle of ongoing training through our fully managed service.
• Provide out landlords with their own dedicated Property Manager as a point of contact
• Producing a walkthrough video tour and high-level photography as part of our standard marketing package.
• Providing our landlords with peace of mind through our Propertymark membership, Client Money Protection (CMP) policy, professional indemnity insurance, and redress scheme membership.