Standard occupation contracts

Last updated 6th December - updates to contracts

Introduction

As of the 1st December 2022, the Renting Home (Wales) Act 2016 applies to virtually all private rented properties in Wales. In particular, changing -

• property standards;
• grounds for possession and notice periods;
• prescribed information for occupants; 
• how agreements are ended by occupants;

As part of these changes, private landlords in Wales can no longer use tenancy agreements when they let their properties. Instead, they must use Standard Occupation Contracts when starting an agreement. As a result, you as a landlord need to change your agreements and comply with the latest requirements.

Many of the terms within the contracts are required by law and landlords must provide an accurate written statement of the occupation contract (including any required clauses) or face penalties. This means it is essential that you use this new type of contract from 1 December instead of an AST. 

If you already had tenants in place before 1 December, then the contract is a converted contract. You are given until May 31 2023 to issue an updated statement to them. For more information see our guide on converted contracts.

NRLA occupation contract template

While the Welsh Government has produced model occupation contracts for use in Wales, there are a number of elements in the contract that make it unsuitable for use by landlords.

To support landlords, the NRLA has produced its own occupation contract template that is more suitable. Amending or removing clauses that cause particular issue, and combining the fixed term and periodic contracts together into one document.

This finalised fixed term standard contract is now available for landlords to download and use for new agreements in Wales.

What is a converted contract?

Converted contracts are contracts where the tenants moved in before 1 December 2022. These tenancies changed into occupation contracts on the 1 December. These type of contracts blend the terms of your previous AST and the new terms of occupation contracts together. They also have their own special rules and requirements that must be followed. Guidance on these contracts and resources is available here

When do landlords need to give an occupation contract?

Virtually all rentals in Wales are occupation contracts as one is required where you are creating a tenancy or licence that meets the following conditions:

• The tenant or licensee will be a person or a group of people (ie not a company)
• The contract grants them the right to occupy the property as a home
• None of the exemptions in Schedule 1 of the Renting Homes Wales Act apply.

Schedule 1 exemptions

A small number of other tenancies and licenses are exempted by Schedule 1 of the Renting Homes (Wales) Act and do not use the occupation contract template as standard. These contracts will be outside the scope of the Renting Homes (Wales) Act and have their own contracts with different, usually easier to follow, rules.

There are two different types of exempted agreements in Schedule 1 - those that can be occupation contracts if you choose to do so and those that can never be occupation contracts. 

The following arrangements can be occupation contracts if you serve notice before the agreement begins that you want them to be occupation contracts. We do not recommend you do this though. 

• Lodger agreements: This exemption applies where the landlord shares living accommodation with the occupier and uses the property as their main home.
  
  Please note that this exemption will be lost if the landlord stops using it as their main home and it must be the landlords main home before the agreement is entered into. The NRLA provides a lodgers agreement template here for use. 
• Agreements where no rent or other consideration is paid
• Agreements between the landlord and another person that allow a different person to occupy the property 
• Holiday lets
• The property is being occupied by a tresspasser

In addition to these agreements, the following contracts are always exempt:

• Tenancies of 21 years or more: Typically meaning that leasehold properties are excluded
• Business tenancies
• Temporary homelessness accommodation: This is only available to B&Bs who provide accommodation through the local authority's homelessness functions. 

Are there any other mandatory documents that I need to give in addition to the contract?

Yes, Renting Homes Wales introduces a number of prescribed documents in Wales that you must provide. These include safety documents and information relating to the landlord's address.

The NRLA has produced a checklist for you to complete and provide to the contract holder to show you have complied.