Transfer by Contract-Holder

Dealing

Under section 57 of Renting Homes (Wales) Act 2016, the contract-holder or joint contract-holder under an occupation contract may not deal with the occupation contract, the dwelling or any part of the dwelling except-

  • in a way permitted by the contract, or
  • under a family property order

"Dealing" includes-

  • creating a tenancy, or creating a licence which confers the right to occupy the dwelling;
  • transferring;
  • mortgaging or otherwise charging.

If the contract-holder does any dealing, they are not entitled to or in a way not permitted by the contract-

  • the transaction is not binding on the landlord, and
  • the contract-holder, or joint contract-holder, is in breach of the contract (despite the transaction not binding on the landlord).

Transfer

A transfer is where the entire occupation contract is transferred from the current contract-holder(s) to a new group or where a joint contract-holder transfers their rights and obligations to another person. Before the Renting Homes Act, it was known as an assignment.

Under the legislated terms of a standard occupation contract, there's no provision allowing a contract-holder to transfer except after death (see the succession section). If the landlord would permit a transfer, you should add a term to the contract.

There is no necessity for permitting a transfer in a typical occupation contract because there is a provision for joint contract-holders to be added or withdrawn and provisions for the contract-holder to end the contract (see ending a tenancy section).

Authorised transfer

Suppose a contract-holder transfers the contract to another person (or a joint contract-holder transfers their rights and obligations) under the contract or with permission from the landlord. In that case, the transfer takes effect from the date agreed (s.70).

The transfer must be signed or executed by each party to the transfer (s.69(2)). If the landlord's consent was required, it must also be signed or executed by the landlord (s.69(3)). If it's not signed and executed, the transfer has no effect (s.69(5)). The transfer does not have to be made as a deed (s.72).

Unauthorised transfer

If a transfer is not per the contract, a landlord needs to be careful not to accept payments from anyone other than the proper contract-holder.

If the landlord (or agent) accepts payments for the occupation of the dwelling from a person to who the contract has purportedly been transferred and the landlord knows or ought reasonably to know that the transfer was not made by the contract, the transfer becomes binding on the landlord at the end of two months, starting with the day on which payments are first accepted (s.71(2)).

But, the transfer does not become binding if, before the end of two months (as above), the landlord⁠-

  • takes steps to end the occupation contract (see ending a tenancy section, and as described earlier, a dealing not permitted by the contract is a breach of contract), or
  • brings proceedings to evict the person as a trespasser or otherwise shows an intention to treat them as a trespasser.
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