Helpful Tips Calum Davies 01/06/2021

New Welsh tenancy agreements: what is a fundamental term?

Following on from our last blog on the Welsh Government consultation on the new model occupational contracts, this blog looks at what a fundamental term of these agreements is and why they are not as straightforward as they may sound.

The new model occupational contracts are the replacement for tenancy agreements for when the Welsh Government implements the Renting Homes Act. Currently scheduled for spring 2022, this Act also brings new Fitness for Human Habitation standards and possession regime changes.

Fundamental terms

The fundamental terms of these contracts deal with the essential rights and obligations of landlords and contract-holders (what tenants are known as in the Act) and cover things such as anti-social behaviour, a landlord’s obligation for repair, and grounds for eviction. Whilst some of these have to appear in the contract as set out in the Act, such as the term relating to anti-social behaviour, most can be modified, but only if that improves the position of the contract-holder.

The fundamental terms in standard contracts, which will replace ASTs, that cannot be modified include those on:

  • Anti-social behaviour and other prohibited conduct
  • Rights of joint contract-holders where another dies or otherwise leaves the contract
  • Requirement that landlord uses an authorised deposit scheme

Fundamental terms in standard contracts than can be modified include those on:

  • Contract-holders may, with a landlord’s consent, add joint contract-holders.
  • Landlord obligations to keep the dwelling in good state of repair, etc.
  • Contract-holders may set off against rent compensation the landlord is liable for under S87

Any changed or omitted terms must be identified in the contract, so contract-holders are aware which clauses were previously present or what they looked like before modification. The draft MOC can be read on p.46 of the consultation document (read below), with the details on which terms can and cannot be modified here.

You can read the first of our blog series on the MOC here. Next week the final blog examines supplementary terms in MOCs.

We need your support

The NRLA is urging landlords to respond to the Welsh Government consultation on the MOCs. This closes on 16 June 2021 and can be responded to here.

To ensure the NRLA’s response reflects what landlords think of the regulations, we are seeking your views on the proposals and ask that you take our short survey.