Information for Welsh landlords on the transition rules for the new Welsh Legislation

I am writing this on Monday, 28 November and the new Welsh legislation is due to come into force on Thursday 1 December.

This is a massive change in the law for Welsh rented properties, and all landlords will need to deal with it.

This is (an non-exhaustive list of) what the new rules will do:

• They will treat tenancies and licenses in the same way – so the differences between the two are largely eliminated
• All tenancies and licenses will become ‘occupation contracts’, and the prescribed fundamental and supplementary rules will apply as of 1 December.  Along with any other clauses in your tenancy agreements which do not conflict with these
• There is new terminology which needs to be used – mainly because the new rules do not just apply to tenancies.  So we refer to them as ‘occupation contracts’ instead, and tenants and licensees are now referred to as ‘contract holders’
• You will need to serve written statements of your contract holders’ occupation contracts both at the start of the contract and whenever there is any change – for example, if the contract holders change, you agree new terms, or if there is a change brought in by new regulations.  If you don’t do this, the penalty rules provide that your contract holders can deduct up to two months’ worth of rent from future payments – the amount they can offset depending on how late the statement was provided (see below for conversion contracts)
• New rules will come into force about smoke and carbon monoxide alarms which may require you to do some extra work – depending on your current alarms and whether they are compliant with the new rules.
• The fitness for human habitation rules, which were introduced in England in 2019, will now apply to you in a similar way 
• The electricity regulations will now also apply to you in a similar way to the rules in England
• If a fixed-term contract ends and you have not already signed up your contract holders to a new agreement, a new statutory periodic contract will be created by law.  All the fundamental and supplementary provisions which are applicable to periodic contracts will apply to this without modification.  So any changes you may have made in your fixed-term contract will not carry over (although your additional terms will).  You can avoid this happening by including the terms of the ‘potential’ periodic contract in your fixed-term contract.  This is discussed in the FAQ here.
• The rules about joint contract holders and when they can join or leave an occupation contract have changed – although contract holders cannot leave or end a contract during a fixed term contract period unless the landlord agrees.
• As regards ‘no fault’ eviction, this is still possible, but the notice period is now six months, and in most cases, you will not be able to issue proceedings until after a year (or longer if your fixed term is more than six months)

All these things will become law on 1 December 2022.  So what do you need to do at that time?  

The transition rules:

• For all existing tenancies or licenses, you must serve a written statement of the converted contract before 1 June 2023
• You have until 30 November to deal with the changes to smoke alarm rules – but this does not apply to new contracts or to the CO alarms.
• If you have already served a possession notice – this will continue to apply for a  limited period:
  
  • Section 21 notices will be valid for two months after 1 December or 2 months after the expiry of the notice (whichever is later)
  • Section 8 notices will remain valid 12 months from service or six months after 1 December – whichever comes first
• During the time the old notices are valid, the possession procedure will remain the same – but after that, the new forms and procedures must be used
• It is believed that the no-fault  notice period for converted contracts will be two months until the fixed term ends (I have not been able to check this yet)

Conversion contracts

We will provide conversion contracts for members who are using our own Landlord Law agreements well before 1 June, but we cannot help if you have been using a different tenancy or license agreement.  

Some landlords have asked us, can we just sign a new contract which is compliant with the new Welsh law? 

The answer is ‘yes’, but only your contract holders are willing to do this.  There is also the question of compliance with the new smoke and CO alarm rules – it is not entirely clear whether the concession to defer the compliance date for this to 30 November will continue to apply to converted contracts where a new agreement has been signed.  

One view is that if the contract exists as at 1 December, it will be a converted contract, and the fact that a new agreement is signed later will not change this.  If this view is correct, then you should not have a problem.

How can Landlord Law help?

We have now published initial drafts of occupation contracts which Welsh landlords can use to create new contracts using their own word-processing software.  We are working on a second draft.

At the time of writing, we have not yet created versions you can create using our document generator, but work on this is in hand.

We now have extensive FAQs and articles on the new legislation and how it will work.  You can see all the content we have listed on this page.

Members can also ask me questions in the members’ forum.

And finally

These rules are very new, and very complex.  It is impossible to know all the clauses of the new prescribed terms or the legislation in detail – although I have been studying them for some time, and I think I have a reasonable grasp of them now.

We will have to see how they work out in practice.  

Any landlords who disagree can discuss this with me in the members’ forum.