There is a clause in the new Welsh tenancy agreements that I know is going to worry landlords.

It worried me too when I first saw it.

It is Term 8 in the fixed term Contract and Term 10 in the periodic contract, and it says

You may permit persons who are not lodgers or sub-holders to live in the dwelling as a home

Which will cause many landlords’ blood pressure to rise. “What!” I hear them saying in horror, imagining hordes of unsuitable people moving in “over my dead body!”.

But I have bad news for you.  This is a supplementary contract term, which means that although it (i.e. the term) can be omitted, this is only if the contract holder agrees.

But, even if the contract holder agrees, the text omitted will need to be shown struck through with the new text shown IN CAPITALS.

So effectively, even if you do omit it, you are just drawing attention to the clause and tempting your contract holders to dispute its omission later.

My approach so far with the contracts has been to leave the Model Contract terms in place but to try to add Additional, obviously reasonable, additional terms which mitigate their effect.

So what can we do about this Term?

The first thing to say is that further down the contract, term 27 (fixed-term contact) and 29 (periodic contract) say:

You must not allow persons to live in the dwelling as lodgers without the landlord’s consent.

A lodger, incidentally, is defined in s244(3) of the Renting Homes (Wales) Act 2016 as follows:

A person lives in a dwelling as a lodger if the tenancy or licence under which he or she occupies the dwelling falls within paragraph 6 of Schedule 2 (accommodation shared with landlord).

So, you may be thinking to yourself (if you are a landlord), ‘good, at least I can forbid any lodgers in my property’.

However, that’s not 100% the case.  The whole issue of landlords’ consent is covered in Chapter 9 (s84 onwards) of the act.  Which says

84 (2) The landlord may not—
(a) unreasonably refuse consent, or
(b) consent subject to unreasonable conditions.

That is then followed by clauses providing for time limits for landlords to object to requests for things – meaning (more or less) that if a landlord fails to refuse permission within one month they are deemed to have agreed.

So this means that you HAVE to respond. And that your objections (if you make them) must be reasonable.

Reasonableness, by the way, is dealt with in Schedule 6.

Mind you, schedule 6 is quite helpful on the question of lodgers as it mentions overcrowding as something to be taken into account.

Lodgers, families and HMOs

The reason contract holders have effectively been given permission by the Welsh Government to bring whoever they like in to live with them, is so that they can have their family (in particular children) and partners living with them. Which is fair enough.

The big problem for landlords, though with other occupiers (ie not family) moving in, and why landlords have to keep control over who is living at the property, is that additional non-family members may (in fact probably will) bring the property into scope for HMO licensing.

Or cause the landlord, if he already has a license which gives an occupation limit, to be in breach of its terms.

The penalties for breaching the HMO rules are fierce.  Landlords can be fined astronomical sums for failing to have an HMO license plus, in order to get a license, they will probably have to carry out expensive renovation works to their property.  Many landlords deliberately keep numbers low to avoid this.

Plus, extra persons will create additional wear and tear at the property, and invitees could be unsuitable occupiers which the landlord would not have permitted, had they applied to be a  contract holder at the start.

So what can be done about this?

My solution

To be 100% safe, any additional contract term will need to be so reasonable that no Judge is going to find it to be in breach of the unfair terms rules.  So I can’t do anything to stop husband and wife from having sister’s unsuitable brother move in with them.  As that would not create an HMO.  And it is the unauthorised creation of an HMO which is the biggest legal problem for landlords.

So, my solution is to have a new additional clause which

• For properties which are not a licensed HMO – prohibits them from allowing persons to live in the property if this will make it into a licensable HMO, or
• Where the property has an HMO license with an occupation limit, prohibits them from causing this to be exceeded.

For non HMO properties, having family members and partners will not put the property into the HMO category as they will be deemed to be the same ‘household’.

So what my clause will do is prohibit contract holders from allowing non-family (or non ‘household’) members to live at the property.

Which will, hopefully, help landlords when Local Authorities come down on them after tenants have brought in new occupiers which put them in breach of the HMO licensing rules.

And finally

This is just one example of the sort of thing you need to watch out for with these new Welsh Occupation Contracts.

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The post Additional occupiers, lodgers and the new Welsh Occupation Contracts appeared first on The Landlord Law Blog.