What is a Contract-holder?
The Renting Homes (Wales) Act 2016 (‘the Act’) provides for “Contract-holder” to replace “Tenant” in respect of residential lettings in Wales and applies to all occupation contracts.
1. What is a contract-holder?
A contract-holder is an individual (who must be 18 or over) who enters into an occupation contract with a landlord who grants a right to the contract-holder to occupy a dwelling as a home.
Under the Act, there is less distinction between tenants and licensees, and so they are collectively known as ‘contract-holders’.
2. Why the change?
The Act simplifies the process for renting residential property in Wales. It aims to redress the previous imbalance between the negotiating power of landlords and tenants by standardising the terms of the contract. The Act strengthens the position of the tenant by ensuring that certain fundamental terms cannot be amended and those which can be amended can only be amended if agreed between the parties, and only if they improve the contract-holder’s position.
3. Occupation Contracts
A written statement of the occupation contract, which is standardised, should make it easier for contract-holders to understand their rights and responsibilities under the contract. For further information on occupation contracts please read 'What is an Occupation Contract?'.
A contract-holder should read through the written statement carefully before signing, to ensure they have fully understood their rights and responsibilities.
There are fundamental provisions in the contract which require a landlord to give a contract-holder a copy of the written statement within 14 days of the occupation date, or they will be liable to pay compensation and cannot serve a possession notice without having provided a copy of the written statement to the contract-holder. If the contract-holder agrees, the written statement can be provided electronically.
4. Use of the property
Under the model occupation contracts, some contract-holder rights require the consent of the landlord, for example:
• adding a joint contract-holder to the contract;
• carrying on a business or trade at the dwelling;
• making alterations to the dwelling; and
• allowing a lodger to live in the dwelling.
The dwelling must not be overcrowded by permitting more people to live in it than the maximum number allowed.
The occupation contracts prohibit anti-social behaviour. A contract-holder can be evicted on the grounds of anti-social behaviour.
5. Joint contract-holders
Under the Act, a third party can be added as a joint-contract holder with the consent of the landlord (whose consent must not be unreasonably withheld or delayed), without the contract ending. A contract-holder can also withdraw from the contract without the contract having to be terminated.
Joint contract-holders are fully liable to the landlord for the performance of every obligation owed to the landlord under the contract. A contract-holder will only be liable for any period during which they are the contract-holder under the contract.
6. Enhanced Succession Rights
If you are a sole contract-holder, your home can be passed on, on your death, to other people to continue living in. The contract can be passed on twice, for example, to your spouse and then to another family member. For further information please read 'Joint Contract-holders and Succession'.
7. Termination
There is greater security for contract-holders living in private rented accommodation in Wales under the Act than before. The biggest change is in respect of ‘no fault’ evictions which are known as s173 notices. For new occupations entered into on and after the 01 December 2022, contract-holders must be given at least six months’ notice, and the s173 notice must not be issued in the first six months following the occupation date. A landlord cannot serve a s173 notice during the term of a fixed term contract. The rules are different for existing tenancies which are converted into occupation contracts.
For further information on termination please read 'Termination of a Standard Occupation Contract'.