10 reasons why we’re not using Welsh Gov’s model occupation contract - #1: It puts landlords in a weaker position than they should be
When the Renting Homes (Wales) Act came into force on 1st December 2022, Assured Shorthold Tenancies (ASTs) were replaced by Occupation Contracts.
Welsh Government (WG) produce a model 'Written Statement of Occupation Contract' (the new phrase for a 'tenancy agreement') that they suggest most landlords and agents will use. We won’t be using it as we feel the terms they’ve included as standard put landlords in a weaker position than they should be in. You might spot some of them below.
As with ASTs, Occupation Contracts are legal interests between contract-holder(s) and landlords, so if the contract isn’t as robust as you need it to be, it’s you (the landlord) who will suffer.
If you don’t currently use our Fully Managed, Rent Collection or Tenant-Find services, you may well find that your agent is using WG’s model Written Statement, without any amended or added terms.
Our enhanced Written Statement includes new-and-improved terms, whilst still being fair and abiding by the legislation.
A summary of what is and isn’t allowed in Occupation Contracts
The Act allows four types of terms to be inserted into an Occupation Contract:
1. Fundamental (F) terms: Written in legislation and cannot be amended in any way.
Example from Welsh Gov's model:
“If you [the contract-holder] pay a deposit under this contract (or another person pays a deposit on your behalf), the deposit must be dealt with in accordance with an authorised deposit scheme.”
2. Fundamental (F+) terms: Written in legislation but can be amended or omitted with agreement from the contract-holder. However, amendments or omissions can’t put the contract-holder in a worse position.
Example from Welsh Gov's model:
“You [the contract-holder] may end this contract at any time before the earlier of —
a) the landlord giving you a written statement of this contract under term 49(1), or
b) the occupation date.”
3. Supplementary (S) terms: Written in legislation but can be amended or omitted with agreement from the contract-holder. Amendments or omissions can put the landlord in a better position, as long as they’re not at odds with F or F+ terms.
Examples from Welsh Gov's model:
“You [the contract-holder] are not required to pay the rent in respect of any day or part day during which the dwelling is unfit for human habitation.”
“You [the contract-holder] may permit persons who are not lodgers or sub-holders to live in the dwelling as a home.”
4. Additional (A) terms: These can be anything, as long as they’re fair and don’t conflict with F, F+ or S terms.
Example not applicable as Additional terms are for landlords to add to their Occupation Contract on a case-by-case basis, providing contract-holders agree to them.
Let CPS Homes help
We're experts on The Renting Homes (Wales) 2016 Act and are helping prepare landlords for the changes. By instructing us to manage your property, we will...
- Work with you to put efficient processes in place well in advance of key dates for new legislation and regulations, ensuring you and your properties are compliant, safe and legal.
- Save you the cost of a Rent Smart Wales landlord licence and the hassle of ongoing training.
- Maximise your rental income by ensuring the property is always achieving its full potential.
- Provide you with your own representative within our Lettings and Accounts departments.
- Produce a FREE professional walkthrough video tour and photography as part of our standard marketing package.
- Place you on our VIP Investor list where you'll get priority access to pre-market investment properties before they're listed online.
- Provide you with peace of mind via our Client Money Protection (CMP) policy, professional indemnity insurance, and redress scheme membership.
To discuss CPS Homes taking over management of your property, contact our Senior Property Investment & Market Advisor, Rhys Owen, today via rhys.owen@cpshomes.co.uk or 02920 668585.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
