Landlord No Reason (Section 173) Notice

Under the Renting Homes (Wales) Act 2016 ("the Act"), the way possession is sought changes for occupation contracts. There is a "no reason" section 173 notice (comparable to section 21) upon giving six months' notice, and the length of notice is reduced to two months for a converted contract.

Fixed-term standard contract

A new or substitute occupation contract loses the ability for a no-reason notice to be served during the fixed term (even if that notice expires after the end of the term). (There is an exception where the tenancy was converted and remains in a fixed term; please see the page titled Landlord Possession (Existing Tenancies That Are Converted) for more information).

It's possible to have a break clause in a standard fixed-term contract, but this will likely be less popular.

To be allowed a break clause, the fixed term must be for at least two years (s.194(1A)(1)), and the landlord cannot serve the notice until at least 18 months after occupation (s.196). The notice must be at least six months (s.195).

There will be little benefit to having a break clause for new fixed-term standard contracts, and in any event, having an 18-month fixed term going periodic will achieve the same result as if it was a two-year term with a break.

For an existing converted contract that is fixed-term and has a break clause, the length of notice is two months and can be served from four months of occupation (para 25D, sch.12).

The landlord can only serve notice during the fixed term (specific converted contract or break clause) if any statutory obligation has been complied with.

Periodic standard contracts

Under section 173 of the Renting Homes (Wales) Act 2016, a landlord can give notice to a contract-holder without providing a reason.

For new or substitute contracts, a landlord can serve the notice after at least six months from the original occupation date (s.175). This "six-month rule" refers to the original contract, meaning even if a substitute contract is issued, the clock doesn't reset; the six months are counted from the first occupation under the original contract, assuming the contract holders, landlord, and dwelling are the same.

The length of the notice is at least six months (s.174), which effectively means a contract-holder has a minimum right to occupy of 12 months, whether a periodic or fixed-term occupation contract is given.

The prescribed form for giving six months' notice during a periodic contract is "RHW16".

The Renting Homes Act appears to prefer periodic contracts from the outset. Still, if deciding on a fixed term for a new occupation contract, consider when you might want the property back and deduct six months. For example, a one-year fixed term gives the contract-holder a right to occupy for at least 18 months.

Substitute contract

A substitute contract is a contract that immediately starts after a preceding one ends and:

  • a contract-holder of the substitute was a contract-holder under the original contract,
  • a landlord of the substitute was a landlord under the original contract and
  • the contract relates to the same (or substantially the same) dwelling as the original contract.

An original contract is the first occupation contract that wasn't a substitute.

When a substitute contract is given, the preceding contract automatically ends immediately before the occupation date of the substitute (s.153(1)(b)).

The Act references "a" contract-holder of the substitute is the same as the original, not all the contract-holders. As long as at least one of them is the same as the original contract, any substitute contract will retain the six months from the initial occupation date and does not reset at each substitute.

For example, A, B and C move into a property. Six months later, B and C vacate, and a periodic substitute contract adds D. Three months later, the landlord wishes to serve notice on contract-holders A and D. The contract is regarded as a substitute because a contract-holder under the replacement ("A") was a contract-holder under the original contract. You can serve the notice because the six-month rule applies to the initial occupation date, not the substitute date. 

But, assuming no notice was served, A vacates, and a contract is issued for D and a new occupier, E, this contract will not be a substitute because no contract holders remain from the original agreement. This contract would become a new contract, and the six-month rule would start from the new occupation date.

It's possible to add a new contract-holder by signing a document with all the parties retaining the original occupation date and contract. Adding does not have to be by way of a substitute contract. Please have a look at the add contract-holders page for more information.

Converted periodic tenancy

For a converted contract that was a periodic assured shorthold tenancy before the start of the Act, the landlord can give the notice after four months of occupation. Since 1 June 2023, six months' notice is required using the prescribed form RHW16 (section 173, six months notice).

Please have a look at the page Landlord Possession (Existing Tenancies That Are Converted) for full details of serving notice under a converted contract.

Statutory obligations must be complied with to serve

Certain statutory obligations must be followed to serve any no-reason notice.

Failure to provide a written statement

For a new or substitute contract, a landlord may not give the notice at a time when-

  • the contract-holder has not been given a written statement of the contract before 14 days from the occupation date (para 1(2)(a), sch.9A), or
  • the landlord is aware that the identity of the contract-holder has changed, and the new contract-holder has not been given a written statement before the end of 14 days from the occupation date (para 1(2)(b), sch.9A).

Furthermore, a landlord who has failed to give the statement within 14 days may not provide the notice for six months from when the landlord provides the written statement to the contract-holder (para 2(2), sch.9A).

Converted written statements and substitutes relating to a converted contract

The converted written statement must be given for a converted contract by 31 May 2023 (para 11(1), sch.12). 

For a substitute contract agreed with contract holders who were in occupation on 1 December 2022 (converted substitute), the time to issue the written statement is by 31 May 2023, where the replacement started before 1 June. If it started from 1 June 2023 onwards, it must be given within 14 days.

The requirement to provide a written statement to a new contract-holder where the contract was converted, and the identity changed is similar to above (by 31 May 2023 or for a change from 1 June 2023, within 14 days) (para 11(1A), sch.12). 

If the written statement is not provided, you may not provide the no reason notice for six months from when the landlord gives a written statement (para 12A, sch.12).

Failure to provide the landlord's address

A landlord may not give the notice at a time when the landlord has not given-

  • notice of an address to which the contract-holder may send documents that are intended for the landlord (prescribed form "RHW2")
  • if there is a change in the identity of the landlord, the new landlord must give the contract-holder notice of the change in identity and of an address to which the contract-holder may send documents that are intended for the new landlord (prescribed form "RHW3")
  • if the landlord's address changes, give the contract-holder notice of the new address (prescribed form "RHW4").

You'll need to use the prescribed form for each scenario outlined above.

Failure to provide EPC

If a dwelling requires an EPC, a landlord may only give notice at a time when the landlord has provided a valid energy performance certificate free of charge to the contract-holder (para 3A(2), sch.9A).

It does not matter when the landlord gives the valid energy performance certificate (as long as before serving the notice) (para 3A(3), sch.9A).

There's no requirement that a new energy performance certificate is given to a contract-holder when a certificate ceases to be valid (assuming the contract-holder has been given a valid EPC) (para 3A(3), sch.9A).

Failure to protect a deposit or prescribed information

If security has been received, which is not money or a guarantee, you must return the security before you can serve notice (para 4(1), sch.9A).

The landlord cannot serve the notice at a time when the deposit has not been protected or the required information given unless the deposit has been repaid in full (para.4(2), Sch.9A).

The time limit of 30 days appears to be expressly omitted about serving notice, which indicates if the deposit is protected and information is given after 30 days, you can serve notice. But, the penalty of between 1 and 3 times the deposit may nevertheless be payable if the contract-holder applies to the court.

In addition, the notices above can only be served when the deposit is held under the scheme rules, e.g. if there is some breach of the scheme's rules. For example, if an insured scheme requires a new insurance fee that you didn't pay, you cannot serve notice until the breach is rectified.

This is very similar to rules before the Act about serving section 21, except under the old rules, there was no ability to protect, and the only solution was to repay the deposit in full.

Under the Act, it's now possible to either repay the deposit in full or protect and give information, and afterwards, you can serve a no-reason notice.

Prohibited payments and holding deposits under the Renting Homes (Fees, etc.) (Wales) Act 2019

A landlord may not give notice at a time when—

  • a prohibited payment has been made and has not been repaid (para 5(1), sch.9A)
  • a holding deposit has not been refunded unless there was a lawful reason to retain the holding deposit (para 5(2), sch.9A).

A prohibited payment or a holding deposit can be repaid by applying it towards payment of rent or as security in respect of the contract to serve notice (para 5(3), sch.9A).

Failure to ensure that working smoke alarms and carbon monoxide alarms are installed

A landlord may not give notice at a time when the dwelling is treated as unfit for human habitation because of a failure to ensure that working smoke alarms and carbon monoxide alarms are installed as required by the Fitness for Human Habitation Regulations (para 5A(2), sch.9A).

There must be a working mains interlinked smoke alarm on each dwelling storey and a carbon monoxide detector in any room with a relevant appliance.

The duty to install carbon monoxide detectors applies to all dwellings by 1 December 2022, but for smoke alarms, there is a 12-month grace period for converted contracts. You can serve the notice during the grace period (para 5A(2)(b), sch.9A).

Failure to supply electrical condition report, etc

A landlord may not give notice at a time when the dwelling is treated as unfit for human habitation because of a failure to provide-

  • a valid electrical condition report
  • any written confirmation of works.

It's important to distinguish the two separate duties.

Electrical condition report

An electrical condition report sets out the results of an inspection by a qualified person. It is valid for five years unless the report contains a lesser date, in which case, the date on the report is when the landlord must complete it again.

Written confirmation of works

Written confirmation must be given to the contract-holder whenever any investigatory or remedial work is carried out to the electrical installation at the dwelling (whether that work is about a safety report or not).

For all works done after the most recent report and before the contract-holder moves in, the landlord must provide written confirmation for each work within 14 days of the occupation date (usually attached to the written statement) (r.6(3)(b)).

For all works done after the occupation date, every time some work is done to the electrical installation, a written confirmation must be given to the contract-holder within 14 days from when the landlord receives the confirmation (r.6(5)).

Failure to provide a gas safety report

A landlord may only give notice at a time when the landlord has provided (or displayed as the case may be) a valid gas safety record (para 5C(2), sch.9A).

A landlord is treated as in compliance as long as they have ensured that the contract-holder has been given (or displayed as the case may be) a copy of a valid gas safety record (para 5C(3), sch.9A).

Retaliatory possession claim

If a landlord makes a possession claim based on a no-reason notice, and the court considers the claim retaliatory, it may refuse to order possession.

A possession claim is a retaliatory claim if the contract-holder has enforced or relied on the landlord's repairing or fitness for human habitation obligations, and the court is satisfied that the landlord has made the possession claim to avoid complying with those obligations (s.217(3)).

Where the court has refused to order possession, as detailed above, the landlord may not give another notice within six months from the day the court declined to order possession (s.177A).

Failure to be registered or licensed under Rent Smart Wales

A section 173, 186, 194 or paragraph 25B of Schedule 12 notice cannot be served if:

  • The landlord is not registered for the dwelling with Rent Smart Wales and 
  • Not licensed unless they have appointed a licensed person to manage the property on their behalf (s.44 Housing (Wales) Act 2014).

However, this restriction does not apply for 28 days after the landlord's interest in the dwelling is assigned to them (s.44(2) Housing (Wales) Act 2014).

Failure to have a property licence

No section 173, 186, paragraph 25B of Schedule 12 nor section 194 notice may be given concerning a standard contract of a part of an unlicensed HMO as long as it remains such an HMO (s.75A Housing Act 2004)

An HMO is considered "unlicensed" if:

  • It is required to be licensed under the respective legislation but is not currently licensed, and
  • Neither of the conditions below is satisfied.

The Two Conditions

To avoid being classified as an unlicensed HMO, one of the following conditions must be satisfied:

  1. A Temporary exemption from licensing requirements has been granted and is still effective.
  2. A complete license application (including fee) has been duly made concerning the HMO, which is still effective.

Therefore, the no-reason notice can be served if the landlord has completed the application or the HMO has a temporary exemption.

Almost identical rules apply to a dwelling requiring a selective license (not necessarily an HMO) (s.98A Housing Act 2004).

Serving the notice

The notice may be delivered personally to the contract-holder, left at or posted to the dwelling or delivered electronically (s.237).

It can only be given electronically if –

  • the person has indicated a willingness to receive the notification or document electronically,
  • the person gets the text in legible form, and
  • the text is capable of being used for subsequent reference.

In addition, regarding electronic delivery, it must also have the certified electronic signature of each person by whom it must be signed or executed (s.236(4)).

To establish a willingness to receive electronically, a term in the contract will be a willingness. It may also be shown as willingness if there's been previous regular communication, such as email, text message, or communication apps. But note the words "willingness to receive the document" (emphasis on "the"). Just because there's been a willingness to discuss repairs over a communication app doesn't necessarily mean there's a willingness to receive the notice using that method.

Also, if relying wholly on email to deliver the notice, care should be taken. Although there's no requirement to show the contract-holder read a notice, it will be for the landlord to show they gave it. Email providers can easily misread an email with an attachment (such as the notice) as spam/junk, so the contract-holder may not see the message. We advise that a printed copy is also sent by ordinary post with proof of postage. Posting using a signed for service is only sometimes suitable because if the signature is refused, that will be evidence that it was not delivered.

For more details, please look at the service of documents section (at the start of the tenancy section).

Withdrawal of section 173 notice

The notice ceases to have effect if before the contract ends (see later), and during 28 days starting with the day on which the landlord gave the notice, the landlord withdraws the notice by providing the prescribed form "RHW19" to the contract-holder (s.180(3)(a)).

Suppose the landlord wishes to withdraw the notice after 28 days from when it was given and before the contract ends. In that case, the landlord can provide the contract-holder the prescribed form "RHW19". Still, the section 173 notice only ceases to have effect if the contract-holder does not object to the withdrawal in writing before the end of a reasonable period (s.180(3)(b)). "Reasonable period" is not defined.

Serving another after the first service

Where a landlord has given a contract-holder notice under section 173 ("the first notice"), and the landlord has subsequently withdrawn the notice (see above), the landlord may not give another section 173 notice before the end of the period of six months starting with the day on which the landlord withdrew the first notice (s.177(2)), except for the following circumstances-

The landlord may give one more notice under section 173 to the contract-holder during 28 days, starting with the day on which the landlord gave the first notice (the purpose is to allow for the correction of an error) (s.177(3)). Note: it's essential to realise that you must withdraw the earlier notice before sending the second one.

If the landlord has not made a possession claim within two months of the expiry of the notice, you can give further notice, but not until six months from the last day the landlord could have made a claim (s.177(4) & (5)).

When the contract ends

If the contract-holder gives up possession on or before the date specified in the notice, the contract ends on the date specified in the notice (s.180(1)).

If the contract-holder gives up possession after the date and in connection with the notice, the contract ends when the contract-holder gives up possession (s.180(2)(a)).

If the court makes an order for possession, the contract ends-

  • if the contract-holder gives up possession on or before the date in the court order, on that date,
  • if the contract-holder gives up possession of the dwelling after the ordered date but before the order is executed, on the day when they give up possession, or
  • if the contract-holder does not give up possession before the order for possession is executed when the order is executed (s.206(1)).

Must the contract holder give notice to leave before the expiry of the section 173 notice?

If the contract-holder gives up possession before they are asked to leave in the section 173 notice, the contract continues until the date specified in the section 173 notice. Therefore, if they leave before this time, they will be liable for rent and any other terms in the contract until it ends.

Therefore, if the contract-holder wants to leave sooner than the specified date, they must give a notice under section 168 (contract holder’s notice); otherwise, the contract will continue until the specified date. Of course, the landlord and contract-holder can agree to end the contract anytime (s.153).

Starting a claim

There is a "use it or lose it" provision for the section 173 notice.

The landlord may not make a possession claim about the notice—

  • before the date specified in the notice or
  • after the end of the period of two months, starting with that date (s.179).

Possession will typically be via accelerated possession using claim form N5B. However, the standard procedure may also be used, mainly if a claim for rent arrears was included simultaneously.

The claim is mandatory, so if the court is satisfied the notice is valid and all statutory obligations complied with, etc., the court must make an order for possession of the dwelling (s.215).

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