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What the Renting (Homes) Wales Act 2016 will mean for existing assured shorthold tenancies

25 November 2022

On 1 December 2022, the long-awaited Renting Homes (Wales) Act 2016 will come into force, marking one of the biggest reforms to Welsh housing law in decades.

With the changes just under a week away, here are a few things to watch out for if you currently hold an assured shorthold tenancy in Wales or are looking to create one shortly.

What will happen to existing assured shorthold tenancies?

At the appointed date, all assured shorthold tenancies entered into before 1 December 2022 will automatically be converted into standard occupation contracts, and tenants will be called ‘contract holders’.

If your assured shorthold tenancy ends after 1 December 2022, it will be converted to a ‘fixed term standard contract’. However, if the fixed term has expired and you have a rolling tenancy, it will be converted to a ‘periodic standard contract’.

Occupation Contracts

All occupations contracts will feature four ‘standard terms’:

1. Fundamental provisions: These will cover important aspects including possession proceedings and a landlord’s obligations to repair.
2. Supplementary provisions: These will focus on practical day-to-day matters such as the requirement for a contract-holder to notify a landlord if a property will be empty for four weeks.
3. Key matters: These include the names of the parties, rent payable and address of the property.
4. Additional terms: These will address any other specifically agreed matters, for example a term that relates to the keeping of pets. Such terms must be fair as required by the Consumer Rights Act 2015.

Converted Contracts

Assured shorthold tenancies that convert to occupation contracts will have their ‘standard terms’ determined differently:

1. Converted contracts will be subject to the same fundamental provisions as new occupation contracts.
2. Existing terms in converted contracts will be incorporated as additional terms, unless:
   (i) They are incompatible with a fundamental provision; or
   (ii) They are terms as a result of an enactment repealed or revoked under the new Act
3. Supplementary provisions will be incorporated, except to the extent that they are incompatible with existing terms.

Written statements 

All new or converted occupation contracts will require landlords to provide contract holders with a written statement outlining their respective rights and responsibilities, either in hard copy or electronically (if the contract holder agrees).

Landlords who enter a new occupation contract after 1 December 2022 must provide contract holders with a written statement within 14 days of signing the contract.

Alternatively, landlords with converted contracts have six months to provide contract holders with a written statement (i.e. until 31 May 2023) and can transfer existing terms into the written statement.

Warnings about written statements

If you are a landlord, you will not be able to serve a possession notice without a written statement. You can also be penalised if you fail to provide a written statement on time or if it is incomplete or inaccurate. A contract holder could, for example claim one day’s rent per day of non-compliance for up to two months, plus interest, or offset this against any rent due.

What we can do to help

We will be able to assist with the conversion process by ensuring that both converted and new occupation contracts are compliant with the four types of standard terms.

We will also be able to assist with the all-important written statements so that you can avoid penalties for not providing one on time and so that you are able to validly serve a possession notice.

Please do not hesitate to contact the team if you require further information on the above.

In our next article, we will explore what the Renting Homes (Wales) Act 2016 means for existing eviction notices and some ‘new’ ways to end an occupation contract