Termination of a Standard Occupation Contract
An occupation contract is terminated by a Section 173 Notice, as opposed to the Section 21 Notice used in England. A Section 173 notice may only be issued after the expiry of six months from the occupation date of the contract.
1. Termination by the Landlord
A contract-holder cannot be evicted without a court order unless the contract-holder abandons the dwelling.
- No fault evictions
A no fault eviction notice (s173 notice) cannot be served during the term of a fixed term standard occupation contract. The landlord must wait for the occupation contract to become periodic at the end of the fixed term before they can serve the required six months’ notice.
Under a periodic standard occupation contract, the minimum notice period that must be given is six months. A landlord is not able to give a possession notice until 6 months after the contract starts. This gives contract-holders a minimum 12-month contract.
A landlord is not able to serve a s173 notice until six months after the expiry of any previous s173 notice.
A s173 notice will not be valid if the landlord has not complied with its obligations set out below.
The six month notice period only applies to occupation contracts which begin on or after 01 December 2022.
For an existing periodic tenancy which began before 01 December 2022, landlords are only required to give two months' notice under section 173, but such a notice must not be served within the first four months of the contract-holder's occupation.
For an existing fixed term tenancy which began before 01 December 2022, landlords are able to serve a section 186 notice to end the contract at the end of the term. Landlords are only required to give two months' notice, but such a notice must not be served within the first four months of the contract-holder's occupation.
Prescribed forms of possession notices can be found here.
- Restrictions on serving a possession notice or break notice
A landlord is not able to give such a notice if they have failed to comply with their statutory obligations:
• failed to provide the contract-holder with a written statement of the occupation contract or failed to provide the written statement within the required time frames;
• failed to provide the contract-holder with an address to which the contract-holder may send documents that are intended for the landlord;
• not returned any security, or failed to comply with the requirements relating to authorised deposit schemes;
• breached the requirements of the Renting Homes (Fees etc.) (Wales) Act 2019;
• not provided an Energy Performance Certificate (“EPC”);
• an HMO dwelling is unlicensed;
• the landlord is not registered with and does not hold a licence under the Rent Smart Wales scheme;
• failed to meet the requirements of the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022. The relevant circumstances are:
o the landlord has failed to ensure working smoke alarms and, where required, carbon monoxide alarms, are installed;
o the landlord has failed to obtain an electrical condition report, or to give the contract-holder such a report or written confirmation of certain other electrical work;
o the landlord has failed to comply with the Gas Safety Regulations 1998 by providing to the contract-holder, or displaying, a relevant gas safety certificate.
Retaliatory eviction - A landlord is not able to evict a contract-holder if they have served a possession notice on the contract-holder following a complaint from them about the condition of the dwelling or if the contract-holder asked for repairs to be carried out. If a landlord applies to court for a possession order but it is refused on the grounds that it was a retaliatory eviction, the landlord cannot give a further s173 notice until 6 months later.
- Breach of contract
In order for the court to make an order a contract-holder must have broken one or more terms of the contract (serious arrears of rent (if the rent is paid monthly, at least two months’ rent unpaid); anti-social behaviour; or failing to take proper care of the dwelling) and it must be reasonable to evict the contract-holder. The court will determine if it is reasonable to evict.
For grounds of anti-social behaviour and other prohibited conduct, the landlord can make a possession claim on or after the day on which the possession notice is served specifying a breach on that ground. For serious rent arrears landlords can issue proceedings 14 days after serving a possession notice. For all other grounds, the landlord can only make a possession claim one month after a possession notice has been served.
- Estate management grounds
A court can make an order for possession where the landlord needs to move the contract-holder based on one or more ‘estate management grounds’. This includes building works (demolition or reconstruction), redevelopment, special accommodation grounds (suitability of accommodation for the contract-holder) and other estate management reasons. Suitable alternative accommodation must be available, and it is reasonable to evict the contract-holder.
The landlord can make a possession claim one month after a possession notice has been served.
- Break Clauses
A landlord is only able to have a right to break the contract in a fixed term contract where there is a fixed term of at least two years. The landlord must give six months’ notice and must not serve the notice within the first 18 months of the contract.
- Abandonment
A landlord is able to regain possession of a dwelling that has been abandoned without obtaining a court order. The landlord must give notice to the contract-holder. If they do not respond within four weeks, the landlord can end the contract. The landlord must also carry out inquiries to satisfy themselves that the dwelling has been abandoned by the contract-holder. The landlord must then serve a further notice to the contract-holder which will end the contract.
2. Termination by the contract-holder
The parties can agree to terminate the contract.
A fixed term contract may include a contract-holder’s break clause giving the landlord not less than four weeks’ notice.
If the landlord commits a sufficiently serious breach (such as fraudulent misrepresentation by the landlord) and the contract-holder gives up possession of the dwelling because of that breach, this will result in the contract ending.
The contract-holder can terminate the contract at any time before they move in or before they receive the written statement from the landlord by giving notice to the landlord.