News
Navigating the Landscape of Renting in Wales: Insights from Rent Smart Wales
05 Sep 2023
In Wales, landlords and property agents are poised for transformation guided by the regulatory framework of Rent Smart Wales. This pivotal journey is significantly shaped by the Renting Homes (Wales) Act 2016, which emerged on December 1, 2022, ushering in a new era in the realm of property rental business.
Occupation Contracts
Traditionally, tenancy agreements have been the bedrock of rental arrangements. However, the landscape is evolving with the introduction of Occupation Contracts. These contractual agreements must be meticulously documented in writing, eliminating potential ambiguity. Those possessing legacy contracts face a critical deadline of May 31, 2023, for conversion compliance. Failure to meet this deadline carries substantial consequences, including potential compensation for contract holders equivalent to two months’ rent and the forfeiture of a landlord’s right to issue possession notices. For stakeholders venturing into new occupation contracts, the issuance of written statements is mandated within a stringent 14-day window post-occupation.
Extending the Notice Period: A Strategic Shift
In a noteworthy shift, the ‘no-fault’ periodic contract’s notice period has been significantly extended under the new Occupation Contracts. Previously set at two months, this period spans an expansive six months, provided the contract remains unbreached.
Focus on Safety: Electrical and Smoke Alarm Compliance
Stringent safety standards are now in place, with obligations regarding providing essential documents. Contract holders must be furnished with a valid Energy Performance Certificate (EPC) for the property. Additionally, a valid Electrical Condition Report (ECR) must be provided within 14 days of occupancy for new contracts or by November 30, 2023, for converted contracts. Ensuring the presence of smoke alarms on the property is imperative, with a requirement for these alarms to be installed at the onset of contract-holder occupation. For properties already occupied by contract-holders as of December 31, 2022, landlords are mandated to provide smoke alarms by December 1, 2023. Furthermore, these alarms must be strategically positioned on every property level, seamlessly integrated with the electrical supply, and interconnected with all other smoke alarms connected to the electrical supply.
Enhanced Succession Rights
Under the new regulatory framework, priority and reserve successors are granted the privilege of succeeding the occupation contract, allowing for two successions beyond the original contract holder.
Additionally, for individuals earning rental income surpassing £1,000 after allowable expenses or exceeding £10,000 before permissible expenses, the obligation of disclosure on a self-assessment tax return comes into effect. This return must be submitted to HM Revenue and Customs by January 31 following the tax year.
As business advisors, we are poised to provide expert guidance in preparing rental property statements. Our services include comprehensive advice on available property allowances and considerations about capital taxes, particularly in scenarios involving property disposals or estate planning.
Cathrin Roberts
Senior Rural Accounts Manager
CRoberts@wrpartners.co.uk
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