CHANGES TO THE RENTING HOMES (WALES) ACT 2016: WHAT YOU NEED TO KNOW AS A LANDLORD OR LETTING AGENT

From the 1st December 2022, the Welsh Government is planning to implement the Renting Homes (Wales) Act 2016, the biggest change to housing law in Wales for decades. This will bring about huge changes in the way homes are rented in Wales for both the private and social sectors.

The Act aims to simplify how both private and community landlords, and Letting Agents rent properties, and will have an impact on all parties in living in and renting out social or private properties across Wales.

The main changes incorporated within the Act include:

• Replacing ‘tenancy agreements’ with ‘occupation contracts’
• An increase in the ‘no fault’ notice period from two to six months
• A more robust focus on ‘fitness for human habitation’ (FFHH), a part of this, all properties must be safe – with working smoke alarms and electrical safety testing for example
• A fair and consistent approach to anti-social behaviour
• Improved succession rights which sets out who has a right to continue to live in a home
• More flexible tenant arrangements, making it easier for tenants to be added or removed from the contract without the need to end the contract
• Landlords and letting agents will be able to repossess abandoned properties without a court order

How will this affect landlords and letting agents?

Landlords and letting agents should now benefit from a simpler system, however, there are certain new obligations they will need to adhere to.

Firstly, they will be required to issue a ‘written statement’ of the occupation contract to all contract-holders (this replaces the current tenancy or licence agreement). This written statement must contain all the terms of the contract.

New rentals

For new rentals after the implementation date, the written statement must be issued within 14 days of occupation under the contract. Existing tenancy agreements will ‘convert’ to the relevant occupation contract on the day of implementation, and landlords and letting agents have a maximum of six months to issue a written statement of the converted occupation contract to their contract-holders. The written statement can be issued in hardcopy or if the contract-holder agrees, electronically.

Existing rentals

Under the new law ‘occupation contracts’ will replace existing tenancies and licences.

• There are two main types of occupation contract: standard and secure. Standard contracts will replace assured shorthold tenancies which are currently used mainly in the private rented sector
• Secure contracts will replace the secure tenancies used mainly in the social rented sector.

On 1^st December 2022, all existing tenancy agreements will automatically convert to an occupation contract. 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’s a periodic assured shorthold tenancy, it will convert to a periodic standard contract.

Whilst an occupation contract can be initiated verbally, it needs to be followed up with a written statement of the contract. Written statements need to be given within 14 days of the occupation date for new contracts from 1^st December 2022. Written statements for converted contracts need to be issued by 1^st June 2023.

Ending an occupation contract

The most significant impact to landlords whose tenants have fallen into arrears and refuse to leave the property is that landlords and letting agents must now issue a six month notice if they wish to recover possession of their property outside of the rental arrears process, which has historically taken longer.

This will increase eviction times and rent arrears in some circumstances.

How can landlords and letting agents comply with the requirement to provide a written copy of the occupation contract?

You or your agent will need to draw up a written statement to use for new occupation contracts from 1^st December. The model written statements can be found on the and should provide a good basis for this. For all existing tenancies or licences, you or your agent will need to consider which of your existing terms need to be carried across to the written statement of the converted contract. You will then need to provide a copy of the written statement to your existing tenants by 1^st June 2023.

How do I convert an existing tenancy agreement or licence into an occupation contract?

The Welsh Government’s website also contains guidance on creating a converted occupation contract, as well as model written statements that can be downloaded and used by landlords.

When do I need to provide written occupation contracts to my existing tenants?

For converted contracts you have up to six months from 1^st December 2022 to provide your existing tenants or licensees with a written statement of the contract.

For new occupation contracts which begin on or after 1^st December 2022 you will be required to issue the written statement within 14 days of the occupation date under the contract., if the contract-holder agrees, electronically.

Our Property Owners Legal Expenses and Rent Guarantee insurance is a valuable support service for Landlords and Letting Agents and can cover legal fees, unpaid rent, and debt recovery.

Richard Finan, Director of Strategic Development, Arc Legal Group

For further information on the above, or details of our products and services, please contact your Partnerships Manager or email enquiries@arclegal.co.uk.

Find further guidance for landlords and letting agents is available from the Government website.