Those Local Authorities in Wales who still have a housing stock will be well used to managing secure tenancies of residential accommodation under the provisions of the Housing Act 1985. However this form of residential tenure is due to be swept away in Wales when the Renting Homes (Wales) Act comes into force. On a date yet to be set by the Welsh Government any tenancy or licence which exists on that day will automatically be converted into an “Occupation Contract”. Under the new legislation there are two types of Occupation Contract. The Standard Contract is designed for the private sector. The Secure Contract (with some exceptions) is for “Community Landlords”. The definition of Community Landlord includes Local Authorities.
The requirement to give a written contract will be enshrined in the legislation. It must set out all terms upon which the occupation is based and contain certain explanatory information. If there is no contract, or if the contract is incomplete, the tenant or licensee will be able to apply to the court for a declaration as to the terms of the contract, and seek compensation for the landlord’s failure. It will therefore be important to ensure that members of staff are kept up to date as to the change in law and to ensure that new forms of Tenancy Agreements (or Occupation Contracts) are put in place at the relevant time.
Each written contract will have four types of term:
- Key matters – these are the essentials which form the basis of the agreement – the property, the date, the rent and the period of the occupancy.
- Fundamental terms – these are set out in legislation and grant all of the primary rights and responsibilities. Some cannot be changed at all, some can be changed but only in favour of the occupier. These terms include issues like prohibited conduct, transfer and sub-occupation, succession and repairs.
- Supplementary terms – these will be set out in regulations, and can be modified or left out, as long as the fundamental terms are not undermined. Hence the written contract must reflect which of these terms will apply.
- Additional terms – any other terms which are agreed between the landlord and the occupier.
Model contracts will be available, examples which were used for the purpose of consultation last year are still available on the internet.
Hence the terms of your Occupation Contracts will fall into three categories:
- Key terms.
- The non-negotiable terms which need to be set out in writing even though you cannot change them.
- Any other terms to be agreed. It is expected that model form contracts will be available from Welsh Government shortly.
Allowing existing forms of tenancy agreement to remain in place after the new legislation comes into force will not be an option. It could result in significant compensation payments being awarded as well as the associated adverse publicity.
For more information or advice on steps to prepare yourself for the introduction of the new legislation please contact our property litigation team.
