Key Principles of Rent Variation

Under the Renting Homes (Wales) Act 2016, rent can only be varied in specific ways, depending on the type of occupation contract (Standard or Secure) and the terms agreed upon.

• Terms of the Contract: The occupation contract itself should specify how and when rent can be varied.
• Agreement: Rent can always be varied if both the landlord and the contract-holder agree to the change. This agreement should always be in writing.
• Statutory Notice: If there is no agreement, or if the contract allows for it, rent can be varied by serving a statutory notice.
• Frequency: Rent can generally only be increased once every 12 months

Rent Increases for Standard Contracts

Most private rented sector tenancies in Wales are now Standard Contracts.

• Fixed-Term Standard Contracts:
  • Rent cannot be increased during a fixed term.
  • If the fixed term ends and rolls into a periodic standard contract, rent can then be increased by serving a notice.
• Periodic Standard Contracts:
  • For periodic standard contracts (including those that follow a fixed term), a landlord must give at least two months' written notice of a rent increase.
  • The notice must be in the prescribed form (Form RHW12).
  • The notice period starts from the day the notice is given.
  • The new rent cannot take effect earlier than 12 months after the date the occupation contract started or the last rent increase took effect.

Other Variations to the Contract

Beyond rent, other terms of an occupation contract can also be varied.

• Agreement: Most variations to the contract terms require the agreement of both the landlord and the contract-holder. This agreement should always be documented in writing.
• Implied Terms: Some terms are implied by law and cannot be varied (e.g., the landlord's obligation to keep the property in repair).
• Fundamental and Supplementary Terms: The Renting Homes (Wales) Act categorises terms as fundamental, supplementary, and additional. Variations to fundamental terms have specific rules and often require a written notice of variation.
• Notice of Variation: For certain variations, a specific "written statement of variation" must be provided to the contract-holder.

Best Practices for Landlords

• Be Transparent: Always communicate openly and clearly with your contract-holders about any proposed rent increases or variations.
• Provide Justification: If increasing rent, be prepared to explain the reasons (e.g., increased running costs, market rates, property improvements).
• Use Correct Forms: Always use the prescribed forms from the Welsh Government for rent increase notices (Form RHW12) and other variations to ensure legal compliance.
• Keep Records: Maintain detailed records of all notices served, agreements made, and communications regarding rent variations.
• Seek Advice: If unsure about any aspect of rent variation or contract changes, seek legal advice or consult with a qualified letting agent.