If you’re a Cardiff HMO landlord, you’re probably well aware of the challenges that come with managing multiple tenants under the Renting Homes (Wales) Act 2016. One of the biggest issues? Fixed-Term Occupation Contracts.
While they might seem like a straightforward way to secure tenancies, they come with hidden complexities that can cause headaches for landlords. On the other hand, Periodic Occupation Contracts offer greater flexibility, fewer administrative burdens, and better legal protection.
So, should you ditch fixed-term contracts and opt for periodic contracts instead? Let’s break it down.
Why Fixed-Term Occupation Contracts Are a Problem for HMO Landlords
Originally, the Renting Homes (Wales) Act 2016 was designed to use only periodic contracts. However, fixed-term contracts were later introduced—but they come with several downsides for landlords.
🔴 Key Issues with Fixed-Term Contracts:
🚨 More Paperwork: Every time a fixed-term contract ends, landlords must issue a new written statement.
📜 Legislated Default Rules: When a fixed-term contract rolls into a periodic contract, some agreed-upon terms reset to the default rules—for example, permitted occupiers and inventory obligations.
🔄 Loss of Landlord Rights: Once a fixed term ends, landlords lose certain rights, such as modifying supplementary terms (e.g., restricting occupiers).
📈 No Automatic Rent Increases: You can’t increase rent during a fixed-term contract unless the tenant agrees. With a periodic contract, rent can be reviewed after 12 months.
❌ Resets Legal Notices: If you’ve served a rent arrears or anti-social behaviour notice during a fixed-term contract, you can’t rely on it once the contract is renewed—it’s like starting from scratch!
For HMO landlords, these issues can lead to more paperwork, reduced control, and a lack of flexibility when managing tenants.
Why Periodic Occupation Contracts Are a Better Option
✅ Less Admin Work – A periodic contract never needs renewing, meaning no hassle with reissuing written statements.
✅ Continuous Flexibility – Any modifications to key tenancy terms stay valid indefinitely rather than resetting every contract cycle.
✅ Easier Evictions & Possession Proceedings – If a tenant builds up rent arrears or engages in anti-social behaviour, landlords can rely on past notices when seeking possession.
✅ Rent Increases Allowed – Unlike fixed-term contracts, periodic contracts allow landlords to increase rent after 12 months without requiring the tenant’s agreement.
✅ Easier Tenant Swaps – In HMO properties, tenants come and go. With a periodic contract, swapping tenants requires only a simple notification process—not a brand-new contract.
For most Cardiff landlords, a periodic contract makes life simpler, removes unnecessary admin work, and keeps you in control of your property.
Are There Any Downsides to Periodic Contracts?
Of course, there are some trade-offs.
❌ Less Tenant Security: A tenant can leave at any time with four weeks’ notice, which can create uncertainty in your rental income.
❌ Joint Tenancy Risks: If you’re renting to multiple tenants under one contract, a single tenant can leave with little notice, causing instability. (However, you can modify this with a two-month notice rule.)
❌ Student Lets May Require Fixed Terms: If you’re renting to students, fixed-term contracts may still be preferable, as they provide structured tenancies for the academic year.
Conclusion: Should You Ditch Fixed-Term Contracts?
For most Cardiff HMO landlords, the answer is yes.
🔹 Periodic contracts offer less hassle, greater flexibility, and stronger legal protections.
🔹 Fixed-term contracts create unnecessary admin work and can put landlords at a disadvantage if they roll over into periodic tenancies.
🔹 If you’re renting to students, fixed-term contracts may still work—but you need to be careful about the transition process.
As a Cardiff landlord, do you still prefer fixed-term contracts, or have you already switched to periodic contracts? Let us know in the comments! 👇
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