In my last post here, I was a bit wobbly about whether landlords could get their tenants/contract holders to sign a new occupation contract. Instead of serving them with a written statement of their converted contract.
All Welsh tenancy agreements converted automatically to occupation contracts on 1 December 2022. So the requirement for a conversion statement is there so contract holders are told what the terms of their new contract are=.
The main reason for my concern was that the legislation is definite about the need to serve a conversion statement. Whereas it was silent on whether a new contract will be an adequate replacement.
I was also worried by the fact that if you go for the new contract option before the deadline of end of May 2023, it will be too late for you to correct things later. For example, if subsequent case law decides that a new contract is not enough.
Why a new contract will probably be OK
However, I have come to the conclusion that I was probably worrying unnecessarily. Main reasons being
- It is unreasonable to expect landlords to go through the difficult process of creating a conversion contract when the tenants/contract holders are willing to sign a new contract
- The law generally does not penalise someone for doing the sensible thing where the precise legal situation is unclear
- I have also spoken to Welsh solicitors and understand that their view and advice is that signing a new contract is OK.
However, if you do decide to go down this route, I would recommend that if you are giving a fixed term, you give a fixed term which is longer (even if only slightly longer) than the fixed term you are replacing. So if your current unexpired fixed term is three months, the new fixed term should be four months or maybe six.
The reason for this is that tenants will be getting an extra benefit from the new fixed-term agreement. A longer period of time when they can’t be evicted under the no-fault ground. It will not be just a device to save the landlords the bother of serving a conversion document. And so would be more likely to be accepted by a Judge as an acceptable replacement.
If your tenant / contract holder is not willing to sign a new contract
Well, then, you will have no alternative but to serve a written conversion statement before the deadline.
As you will have realised, this is not an easy thing to do.
It is not a matter, as someone who contacted me recently seemed to think, of serving a pre-drafted template or form. You will have to go through your existing contract clause by clause and see how it matches up to the Welsh government’s model contract. Not an easy thing to do, particularly if writing and paperwork are not your ‘thing’.
It’s not possible to create a standard ‘conversion statement’ as there are so many different forms of tenancy agreements. Even where people are using the same form of agreement you may have changed or adapted it in some way. This would need to be reflected in the new written statement. Assuming your clauses were not contradicting one of the new Welsh clauses.
To help landlords, I have created a conversion contract page with guidance (colour coded too!) to make things a bit easier for you. Or you could get solicitors to do this for you. But as it will take quite a bit of time, using solicitors could prove expensive. This will probably only be worth doing if you have money to spare (and who has that nowadays?) or a lot of properties all using the same tenancy form.
We have a draft conversion contract form for landlords who have used the Landlord Law tenancy agreement, and I understand that the NRLA and ARLA (and probably other similar organisations that provide tenancy forms) are doing the same. So it may be worth contacting the organisation you bought your tenancy agreement from to see if they can help.
You can find out more about my Landlord Law Welsh content here. See the rest of our posts on the new Welsh law here.