On 1 December 2022, The Renting Homes (Wales) Act 2016 (‘the Act’) came into force (see: Renting Homes (Wales) Act 2016 comes into force). At that time tenancies and licences in Wales converted into ‘occupation contracts’.
The type of occupation contract they converted to depended on the type of tenancy or licence they were originally. A secure tenancy held by a local authority tenant converted into a secure occupation contract. An assured shorthold tenancy held by a tenant of a private landlord converted to a standard occupation contract.
Landlords have to provide a written statement to the contract holder setting out terms of any new occupation contract within 14 days of the start date. Landlords of any existing agreement that converted on 1 December 2022 have until before 1 June 2023 to issue a converted contract which will set out the new terms.
A contract holder is entitled to statutory compensation if a landlord misses a deadline which they can set off against rent. The Act also provides a mechanism for the contract holder to apply to court for a declaration of the terms of the contract if no statement, an incorrect statement or an incomplete statement is served. Consequently, landlords must be diligent and organised so as not to miss an important deadline.
New regulations were published on 25 April to come into force on 1 June (The draft Renting Homes (Wales) Act 2016 (Amendment of Schedule 12 and Consequential Amendment) Regulations 2023) and make various changes to Schedule 12 to the Act dealing with converted contracts.
When a converted contract ends, a “substitute contract” may arise and under Schedule 12, a substitute contract is treated as if it were the same tenancy or licence as the converted contract. These draft Regulations amend Schedule 12 with some welcome clarification for all parties so time limits can be adhered to:
- Where the contract holder under a converted contract changes before 1 June 2023, the landlord must give the new contract holder a written statement within 14 days of the later of 1 June 2023 and the day the landlord becomes aware of the change.
- For substitute contracts which come into existence before 1 June 2023, the landlord must provide the written statement within 14 days of 1 June 2023.
- For substitute contracts which come into existence on or after 1 June 2023, the landlord must provide the written statement within 14 days of the day on which the contract holder is entitled to begin occupying.