What letting documents do I need in Wales?
On 1 December 2022, the Renting Homes (Wales) Act 2016 (the Act) changed how residential property is rented and managed in Wales. Most prominently, the Act created ‘occupation contracts’.
In all circumstances, it is essential that landlords use the correct document when renting out residential property. This ensures the person renting the property (ie the ‘contract holder’) and the landlord both know and understand their rights and obligations with regard to the property.
For more information on letting properties, read Renting property.
What are occupation contracts, and when do I need one?
From 1 December 2022, most people in Wales have rented residential property under an occupation contract. This is a type of tenancy agreement, which is a contract between a landlord and a contract holder. Most people who previously rented residential property under an assured shorthold tenancy (AST) agreement will have had their contracts converted to occupation contracts when occupation contracts were introduced.
Occupation contracts can either be standard occupation contracts or secure occupation contracts, depending on the type of landlord.
For more information, read Occupation contracts in Wales.
What is a contract holder?
A contract holder is a term introduced by the Act. It applies to individuals (over 18) who rent a dwelling (ie residential property) from a landlord in Wales.
Under the Act, there is less distinction between ‘tenants’ and ‘licensees’ than there was previously, so the term ‘contract holder’ may apply to either, so long as the individual is renting under an occupation contract.
What are joint contract holders?
Under the Act, contract holders can be joint contract holders (ie more than one contract holder can share an occupation contract). With the landlord’s consent (which must not be unreasonably withheld or delayed), a new contract holder can be added to an existing contract without the contract coming to an end. Similarly, an existing joint contract holder can move out and leave the occupation contract without it coming to an end.
Joint contract holders are fully liable for all obligations under the occupation contract. This means that if one joint contract holder does not pay rent, the remaining joint contract holders will be liable for the rent in full. However, joint contract holders are only liable to perform obligations under the contract for the duration that they are a contract holder. In other words, once a contract holder leaves the contract, they will no longer be liable for any obligations under the contract.
What about lodger agreements in Wales?
Under a lodger agreement, an individual (ie a lodger) rents a spare room in a property in which their landlord also resides. Lodgers typically have the right to use the room they rent and the communal areas of the property (eg the bathroom, kitchen, and garden).
Under the Act, certain contracts which meet the requirements of an occupation contract will not be occupation contracts unless the landlord gives notice that the contract is an occupation contract. Lodger agreements fall into this category.
In most circumstances, it will be preferable for a live-in landlord taking on a lodger to do so under a licence that is not an occupation contract. This is because occupation contracts grant contract holders more rights (eg protections against eviction) than licences. Landlords can use a Lodger agreement to take in a lodger under a licence.
For more information, read Taking in a lodger. Do not hesitate to Ask a lawyer if you have any questions.
What about holiday lets in Wales?
Holiday lets enable property owners to rent out a furnished property as a holiday home for a short period of time. Typically, the person renting the holiday home (known as a ‘holidaymaker’) does not get the right to remain in the property after the rental period.
Under the Act, holiday lets, like lodger agreements, will only be considered occupation contracts if the landlord notifies the contract holder that this is the case. As with lodger agreements, it will generally be preferable for property owners renting out a holiday home not to do so under an occupation contract. This is because occupation contracts grant contract holders greater rights with respect to the property.
For more information, read Holiday lets.
Do not hesitate to Ask a lawyer if you have any questions.
