Terms of an Occupation Contract
Terms of the occupation contract
The terms of a standard occupation contract are broken down into four categories:
1. Key matters – information about the dwelling, occupation date, amount of rent or other consideration and the rental period, whether the contract is periodic or a fixed term, how long the term is for, and any provision where the contract-holder is not entitled to occupy the dwelling.
2. Fundamental Terms – these are the essential rights and obligations of landlords and contract-holders and include the obligation on the landlord to provide a written statement to the contract-holder and the process for terminating the contract. Some fundamental terms cannot be modified. Other fundamental terms can be omitted or modified if agreed between the parties, and they improve the contract-holder’s position.
3. Supplementary Terms – these are practical matters to make the occupation contract work, access for repair etc. These terms can be omitted or modified, if agreed between the parties, save where the omission or modification would make that term incompatible with a fundamental term.
4. Additional Terms – other agreements not dealt with elsewhere (for example the keeping of pets) provided they do not conflict with a key matter, a fundamental term or a supplementary term.
The Welsh Government has published model written statements for both periodic and fixed term standard occupation contracts. The model statements incorporate all the fundamental and supplementary provisions to be included (without modification). The model statements can be found here.
Variation of Contracts
The contract may not be varied except by agreement between the parties or as a result of further regulations made by an Act of Parliament or regulations made by the Welsh Ministers.
Certain fundamental terms cannot be varied: possession claims, anti-social behaviour and other prohibited conduct and requirement to use deposit scheme.
Other fundamental terms can be varied if they improve the contract-holder’s position, but the change will be of no effect if the amended term is incompatible with a fundamental term which cannot be varied.
A variation of any other term of the written contract is not valid if that term is incompatible with a fundamental term (unless that fundamental term can be varied in accordance with the legislation).
If a variation is agreed after the start of the contract, the landlord must provide a written copy of the new term or terms or a new written statement of this contract, within 14 days of the change being agreed.
Converting an existing tenancy to a standard occupation contract
When an existing tenancy is converted to a standard occupation contract, the existing terms of the tenancy will apply unless they conflict with the fundamental terms. Supplementary terms will be included unless they conflict with the terms of the existing tenancy. Any other terms in the existing tenancy will form part of the occupation contract as additional terms (provided they do not conflict with any fundamental or supplementary term). The Act recognises that it would be unfair to replace certain provisions which were agreed in the existing tenancy, and therefore certain provisions must not be replaced (for example, notice periods for possession should remain at two months). Special rules apply under the Act in respect of converted contracts.