How renting homes in Wales is due to change

This long form article gives an overview of the key changes of how renting a home in Wales is due to change

Published in

Adviser online

9 min readOct 25, 2022

In January 2022 the Welsh government announced that the Renting Homes (Wales) Act 2016 (‘the Act’) would come into force in 2022. Implementation was due to be on 15 July but this has been delayed to 1 December 2022.

This legislation will introduce a new renting regime which will apply to most tenancies and licences in Wales. It will mean the biggest shake up in Welsh housing law since the introduction of the Housing Act 1988.

In this article I will provide an overview of the key changes.

Most tenancies and licences become occupation contracts

From 1 December 2022 most tenants and licensees will become ‘contract holders’ and occupy a property under an ‘occupation contract’.

There are a limited number tenancies or licences which are exempt¹ and will not be affected. For example, tenancies which have protection under the Rent Act 1977 and are sometimes called protected tenancies.

In a limited number of situations the landlord can choose if a tenancy or licence becomes an occupation contract. For example, a landlord sharing accommodation with an occupier.

There will be five types of occupation contracts:

Secure contract
Standard contract
Introductory standard contract
Prohibited conduct standard contract
Supported standard contract

For the purposes of the Act landlords fall into two groups:

Community landlords
Private landlords

Community landlords include both local authorities and social landlords. Community landlords will usually offer secure contracts. They may offer standard contracts in particular situations. For example this could be an introductory standard contract to new contract holders, a prohibited conduct standard contract where a secure contract is downgraded by a court because of anti-social behaviour, or a supported standard contract for those living in supported housing.

Private landlords are those landlords who are not community landlords. They will generally offer standard contracts but can offer a secure contract if they choose to do so.

Existing tenants and licensees, excluding those that are exempt, will automatically convert on 1 December. They will transfer to secure or standard occupation contracts. Which type of contract will depend on whether they rent from a community or private landlord.

What occupation contracts should look like

Under the new housing regime, landlords must provide the contract holder with a written statement of the occupation contract’s terms. For contracts which start on or after 1 December, the landlord must do this within 14 days of the start of the contract. For existing tenancies and licences which convert to occupation contracts, landlords must do this by 1 June 2023.

Written statements must be made up of the following terms:

Key matters set out the basics of the contract. For example, names of the parties, rent, and the period of the contract.

Fundamental terms are essential rights and obligations for landlords and contract holders. For example, a term relating to the right of repair or termination of a contract. They have standard wording set out in the Act. Parties are restricted in amending or removing them from the contract.

Supplementary terms deal with practical matters in relation to the property. For example, a term regarding payment of utilities or council tax.

Additional terms are any extra terms agreed between the parties. For example, a term which allows a contract holder to have a pet.

The Welsh Government has produced model contracts which landlords can use as a template. Copies of the model contracts can be found on Gov.wales. The model contracts contain the standard wording for the fundamental and supplementary terms applicable for each type of contract.

A contract holder can apply to court for a declaration on the terms of the contract should there be a dispute. A court may also order the landlord to pay compensation where:

a landlord fails to issue a written statement
it considers the landlord deliberately provided an incomplete or incorrect statement

Terminating an occupation contract

Part 9 of the Act sets out the fundamental terms of an occupation contract relating to termination of the contract. There are many methods by which a landlord or contract holder can end the contract. I will focus on 5 changes relating to how a landlord can end an occupation contract:

Notice due to breach of contract
Notice on estate management grounds
No fault notices
Notice due to serious rent arrears
Abandonment

Each method of terminating the contract will require a landlord to serve the relevant notice in a prescribed form. Following expiry of the relevant notice the landlord will need to apply to court to regain possession of the property. Copies of the prescribed forms can be found on Gov.wales.

Notice due to breach of contract

A landlord of any type of occupation contract can seek to end it because of a breach of the contract by the contract holder. For example, this could be where a contract holder has accumulated rent arrears. Possession on the basis of breach of contract is a discretionary ground. This means that the court must be satisfied that there has been a breach of contract but also that it is reasonable to grant possession.

2. Estate management grounds

A contract can be brought to an end on one or more of a series of ‘estate management grounds’. These are grounds relating to situations of under occupation, redevelopment, or special types of accommodation.² In order for possession to be granted the court must be satisfied of the following:

the particular ground is proven
it is reasonable to grant possession
suitable alternative accommodation is made available by the landlord

3. No fault notice

A landlord can end a standard contract by serving a ‘no fault’ basis. This is a mandatory ground for possession. This means that a court must grant a possession order where a valid notice has been served and the landlord is entitled to rely on the notice.

There are considerable restrictions on when a landlord can serve a no fault notice under the new regime. Some of these restrictions will already be familiar to advisers as they currently apply to section 21 notices. For example:

Failure to protect a deposit in the right way
Taking unlawful letting fees
Failure to register or to obtain a licence with Rent Smart Wales
Breach of requirements to obtain a licence with the local authority for particular types of properties

Under the new regime there will be new restrictions on when a notice can be served.

For most standard contracts, a landlord will not be able to serve a notice where they have failed to provide:

A written statement or confirmation of their address
Working smoke or carbon monoxide alarms
An Energy Performance Certificate
A gas safety certificate
An electrical safety report

For most fixed term standard contracts, a landlord will only be able to rely on a break clause where the fixed term is for a period of 2 years or more. Where there is a break clause, the landlord will not be able to use it within the first 18 months of the contract.

Currently the notice period for a section 21 notice is 2 months. For most standard contracts, this will increase to 6 months.

There will also be a new two month deadline for a landlord to issue a possession claim following expiry of the notice. If the notice is not acted on within this time it will no longer be valid.

Finally the Act introduces a new protection to contract holders from retaliatory eviction. A court will be able to dismiss a possession claim based on a no fault notice where it believes the claim has been issued in response to a complaint of disrepair.

4. Notice due to serious rent arrears

Landlords providing standard contracts will also be able to end the contract on a ground of serious rent arrears. For community landlords this ground will only apply to contract holders who have an introductory or prohibited conduct standard contract.

‘Serious rent arrears’ is defined as rent arrears of more than 2 months or 8 weeks.

This is also a mandatory ground for possession. If a contract holder is proven to have serious rent arrears at the time that the notice was served and at the date of the hearing, then the court must grant the landlord a possession order.

5. Abandonment procedure

Where a landlord believes a contract holder has abandoned the property they will be able to use a new procedure to recover possession of a property.

This procedure requires the landlord to serve a notice warning that they believe the contract holder has abandoned the property. The landlord must investigate during the notice period whether the contract holder intends to return. Once the notice expires, the landlord can recover possession without a court order if satisfied the contract holder has left. A contract holder can apply to court for reinstatement if the landlord has not followed the procedure correctly.

Joint occupation contracts

Currently any one joint tenant can end a periodic tenancy without the agreement of other joint tenants if this is done properly. Under the new Renting Homes Wales regime, the contract will need all joint contract holders to agree to a termination of an occupation contract.

Individual joint contract holders will however have a new right to serve a notice of withdrawal from a periodic contract. This will end the individual’s rights and obligations under the contract but not the contract as a whole.

It will also be possible for a contract holder to add or remove other contract holders with the consent of the landlord. This will prevent the need to end the current contract and start a fresh joint contract.

Enhanced succession rights

Under the current law, there usually can only be one statutory succession to a tenancy. Contract holders will have a new right to have a priority successor and a reserve successor. This will potentially allow for two statutory successions. Additionally the group of potential successors will be extended to include carers.

Fitness for human habitation

Landlords will have a new obligation to ensure the property is fit for human habitation. In assessing whether a property is fit for human habitation 29 different factors must be considered.³ As part of the fitness for human habitation test landlords will also have to comply with the following:

Ensure smoke alarms are fitted on each floor. Landlords of existing tenancies and licences which convert to occupation contracts will have until 1 December 2023 to comply with this requirement.
Ensure carbon monoxide detectors in rooms where there are fuel combustion devices.
Provide up to date electrical inspection reports. Landlords of converted contracts will have until 1 December 2023 to comply with this requirement.

Supported accommodation

Community landlords, or registered charities, will be able to offer supported standard contracts in relation to supported housing. This type of standard contract can be offered where the accommodation is provided alongside support services for people to live independently. For example, this could be a hostel which supports people with drug or alcohol problems.

There are two key distinctive features of a supported standard contract:

Mobility

A supported standard contract can include a term which allows a landlord to move a contract holder to another room within the same accommodation.

2. Temporary exclusion

A landlord has the power to temporarily exclude the contract holder from the property for a period of up to 48 hours. An example of when this power could be used would be where a contract holder has been violent to a resident or member of staff. Temporary exclusion powers can only be exercised in relation to a particular contract holder for up to maximum of 3 times in any period of six months.

This has been a whistle stop tour of some of the key changes which will be introduced by the Renting Homes (Wales) Act 2016. More information about the changes can be found on Gov.wales.

If you’re an adviser and you need further advice on an individual case contact the Expert Advice Team for help. You can submit a consultancy request to the Housing Expert Advice team (this service is only available to Citizens Advice advisers).

Nick Donlon works as a housing expert in the Expert Advice team at Citizens Advice.

The information in this article is correct as of the date of publication.

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