There seems to be a certain amount of confusion over the transition arrangements for tenancies (now called occupation contracts) in Wales and what the notice periods are.
I am going to attempt to wade through the morass of regulations in this post and try to make sense of it all.
Tenancies after 1 December 2022
All tenancies which existed as at 1 December 2022 will have converted automatically to occupation contracts on that date. The new contract will be a mixture of the original tenancy terms and the new Welsh prescribed terms where these are
- Fundamental terms which cannot be changed, or
- Fundamental terms which can only be changed if it is in the tenant’s interest (which the comparable term if any, in the pre 1/12/22 contract may not be).
Welsh landlords have the unwelcome task of preparing and then serving on their tenants (now called contract holders) a statement telling them what the terms of their new contract are.
I have to say that the Welsh government seems to be extremely blase about what I and many consider to be an extremely difficult task. Even for experienced lawyers. Very few ‘ordinary’ landlords will feel happy or competent to carry out this drafting exercise.
So I suspect that many landlords will seek to get their contract holders to sign a completely new contract instead.
Signing a new or substitute contract instead of serving a written statement
When I attended an NRLA webinar with Simon White of the Welsh government, I got the impression that this would be an acceptable way of dealing with things.
However, since then, I have been referred to Schedule 12 s11, which says:
Written statement of converted contract and provision of information
11 (1) The landlord must give the contract-holder under a converted contract a written statement of the contract before the end of the period of six months starting with the appointed day (“the information provision period”).
And then goes on to say that this changes the effect of s31 of the Act, which requires the written statement to be provided within 14 days.
So hopefully, landlords signing up existing tenants to a new contract in order to avoid the dreaded drafting exercise of creating a converted contract will not find themselves being subject of tenants’ claims to court for the penalty for non-compliance after 1 June.
An argument in support of such a claim could be that s32 of Schedule 12 says:
(1) If after a converted contract ends there are one or more substitute contracts, for the purposes of this Schedule (except paragraph 28), the substitute contract is (or the substitute contracts are) to be treated as if they were the same tenancy or licence as the converted contract.
And that a written statement must be served under s11 above. And also, that Schedule 12 s14 says that a converted contract may not be varied before a written statement has been served.
However, I would hope that such an argument would fail. It would seem pretty senseless to force a landlord to go through the arduous process of creating a conversion statement just so they can sign contract holders up to a new agreement. Plus a new contract can’t really be described as a ‘variation’,
So I would hope any Judges faced with this argument would reject it.
Lets now take a look at
The transition arrangements for eviction.
The Welsh Government have a FAQ page which discusses these issues here.
This deals with the following:
No fault notices for periodic tenancies / occupation contracts
For contracts signed before 1 December, and which are periodic tenancies that convert to periodic standard contracts on that date, a two-month no-fault notice period will initially continue to apply after 1 December. However, this notice period will increase to six months, from 1 June 2023.
The form to use for this is form RHW17. This form states that it is for use when a landlord can use a two-month notice. However, the form does not appear to state anywhere that this concession will end on 1 June 2003 and that after this, the notice period will be six months.
Some people are taking this as meaning that the two-month notice period will continue indefinitely. However, the authority for the change is found in Schedule 12 of the Renting Homes (Wales) Act 2016 (the Act), which says at s 25A (s)(a):
(2) This Act applies as if—
the reference in section 174(1) (landlord’s notice: minimum notice period) to “six months” were, in relation to a notice given under section 173 during the period of six months starting with the appointed day, a reference to “two months”,
Fixed terms at conversion with a long period still to run
Although it looks as if signing tenants up to a new contract is acceptable, Landlords may feel that the struggle to create a conversion contract is worth the effort if there is a substantial period of the fixed term still to run. As serving a conversion statement will put them in a better position.
The Welsh FAQ states
A converted fixed term standard contract can be brought to an end in accordance with the notice period arrangements that applied prior to its conversion, provided a minimum two month notice period is provided. However, new fixed term standard contracts cannot generally be ended by issuing a Landlord’s Notice during the fixed term period.
Presumably, this means that if a fixed term contract as at 1/12/22 had two years left to run – a valid two-month s173 notice can be served two months before the fixed term ends. But if a landlord issues a new contract for the remaining two years which the tenant signs, this will no longer apply.
So if the landlord decides, at the end of the two-year fixed term of the new contract, that they want the tenant to go,
- they will need to wait until the fixed term ends before serving their section 173 notice and
- that notice period will be six months rather than two.
So that it will take them longer to evict the contract holder than it would if they had served a conversion statement.
Landlords in this position will need to weigh up which is the worse prospect –
- waiting longer to start no-fault proceedings at the end of the fixed term or
- creating a written statement of the converted contract.
What happens at the end of a converted fixed-term tenancy?
The government FAQ says
A six-month no-fault notice period applies to all periodic standard occupation contracts which began on or after 1 December 2022. This includes periodic standard contracts that arise at the end of a fixed term standard contract (if the landlord doesn’t seek possession at the end of the fixed term by issuing a two-month no-fault notice during the fixed term)
The authority for this is s39(8) of Schedule 12 which says
This Schedule applies to a substitute contract which—
(a) arises under section 184(2) as if paragraph 25A(2)(a) were omitted;
Section 25A(2)(a) is the section which says that two months’ notice will apply during a converted contract until 1 June,
Meaning that a s173 notice will need to be a six months notice for new statutory periodic contracts following on from converted contracts, even if these are created before 1 June.
Don’t forget, by the way, that, as I discussed here, s184 requires landlords to serve a new written statement after the end of a fixed term and that the fundamental and supplementary terms applicable to periodic contracts will be applied ‘without modification’.
So, to avoid having to do this, landlords should consider including the terms of any subsequent periodic contract in their fixed-term conversion document in order to comply with s185.
What about other grounds for eviction?
I have been focusing on the no-fault eviction notices and notice periods. However, if you are looking to evict for rent arrears, you should not have a problem under the new rules, so long as you remember that
- the notice to use is form RHW20 (section 8 notices will no longer apply) and that
- the notice will last for six months rather than the 12-month life of a section 8 notice.
S8 notices served before 1 December will remain valid for 12 months from service or until 31 May (whichever comes first) after which you should use the new forms.
This is under reg 3(2) of the The Renting Homes (Wales) Act 2016 (Saving and Transitional Provisions) Regulations 2022, which I have only been able to find linked from here.
If you have any comments on any of the above, please use the comments section below.
And finally
I have to say that the new Welsh regulations, whatever the Welsh gov may say, seem to be to be unnecessarily complex and hard to follow.
I am constantly finding myself going round and round in circles trying to read the legislation and having to open ever more tabs and windows on my computer to allow me to check cross-referenced clauses. Which has been known to cause my computer to crash!
I have no doubt that all this will have contributed to the exodus of landlords from Wales.