Overview of Standard Occupation Contracts
Fixed Term vs Periodic
Standard occupation contracts can either be for a fixed term (an agreed period of either months or years (less than 7 years)) or periodic (week to week or month to month). A fixed term contract will become a periodic contract on expiry of the term if the contract-holder remains in occupation. Different terms apply whether the contract is periodic or a fixed term.
Occupation contracts must be in writing and must contain certain terms (these terms are discussed further in the subsequent information page). A landlord must give the contract-holder a written statement setting out the terms of the occupation contract within 14 days of the date the contract-holder is entitled to begin occupying the dwelling ('the occupation date').
If the contract is assigned, a landlord must give the new contract-holder a written statement within 14 days of the change (or 14 days of the landlord becoming aware of the change).
Landlords need to provide written statements for standard occupation contracts entered into on or after 01 December 2022. Tenancies and licences created before 01 December 2022 automatically converted to occupation contracts on that date, and landlords must provide a written statement to the contract-holder within 6 months (no later than 31 May 2023). We look at how the existing terms can be converted in the subsequent information page.
If the landlord fails to provide the written statement within the time frames specified, they face financial penalties (of up to two months’ rent plus interest, more if the failure was intentional) and restrictions on obtaining possession of the dwelling.
The occupation contract cannot be enforced until the contract-holder has moved in and the written statement has been provided to the contract-holder.
Written statements can be issued in hardcopy or, if agreed by the contract-holder, these can be sent electronically.
As a supplementary provision under the Act, a landlord is required to provide a contract-holder with an inventory in relation to the dwelling within 14 days of the date the contract-holder is entitled to begin occupying the dwelling. The inventory must set out the dwelling’s contents, including all fixtures and fittings and must describe their condition as at the occupation date. Amendments can be made to the inventory if the contract-holder provides comments to the landlord.