Renting Homes (Fees etc.) (Wales) Act 2019

Restriction on using landlord’s break clause in fixed term standard contracts

5 After section 198 (restrictions on use of landlord’s break clause: security and deposit requirements), insert—

“198A Restrictions on use of landlord’s break clause: prohibited payments and holding deposits

(1) The landlord may not give notice under a landlord’s break clause at a time when—

(a) the landlord has required a prohibited payment (within the meaning given by the Renting Homes (Fees etc.) (Wales) Act 2019) to be made as described in section 2 or 3 of that Act,

(b) as a result of the requirement, a prohibited payment has been made to the landlord or to any other person, and

(c) the prohibited payment has not been repaid.

(2) The landlord may not give notice under a landlord’s break clause at a time when—

(a) a holding deposit (within the meaning given by the Renting Homes (Fees etc.) (Wales) Act 2019) paid in relation to the contract has not been repaid, and

(b) the circumstances are such that the failure to repay the deposit amounts to a breach of the requirements of Schedule 2 to that Act.

(3) In determining for the purposes of this section whether a prohibited payment or a holding deposit has been repaid, the payment or deposit is to be treated as having been repaid to the extent (if any) that it has been applied towards either or both of the following—

(a) a payment of rent under the contract;

(b) a payment required as security in respect of the contract.

(4) This section is a fundamental provision which is incorporated as a term of all fixed term standard contracts with a landlord’s break clause.”