Converted Occupation Contract Rent Increase Wales: Tribunal Rights and Timing

What Makes a Converted Contract Different

On 1 December 2022, assured shorthold tenancies within the Act's scope converted automatically into standard occupation contracts under the Renting Homes (Wales) Act 2016. These are called converted contracts, and they carry a right that newer contracts do not: the contract-holder can challenge your proposed rent before the Rent Assessment Committee.

A contract created fresh on or after 1 December 2022 is a newly granted contract. On that type of contract, the proposed rent takes effect automatically once the notice period expires. No tribunal route exists.

Getting this classification wrong — treating a converted contract as if no challenge is possible — leaves you unprepared if the contract-holder submits a Form RAC4 referral.

How the First Increase Works on a Converted Contract

The procedure is the same Section 123 process that applies to all periodic standard contracts:

1. Download the current Form RHW12 from the Welsh Government portal.
2. Complete Parts A through F — ticking "Periodic standard contract" in Part A, listing every joint contract-holder in Part C, and specifying the current rent, the proposed new rent and the effective date in Part E.
3. Serve the notice using a method permitted by Section 237: hand delivery, post, or email with prior written consent.

The two-month and 12-month rules apply identically. If the AST had a rent increase under the old Section 13 of the Housing Act 1988 before conversion, that increase counts as the last variation for the 12-month calculation. The clock runs from the date that pre-conversion increase took effect.

If no increase was made under the old regime, the 12-month interval runs from the original tenancy start date.

The Rent Assessment Committee Referral

Within two months of receiving your Form RHW12, a contract-holder on a converted contract can submit Form RAC4 to the Residential Property Tribunal Wales. There is no application fee.

The Rent Assessment Committee then conducts an independent open-market valuation. The statutory assumptions are set out in the Renting Homes (Rent Determination) (Converted Contracts) (Wales) Regulations 2022 (S.I. 2022/781):

• The committee benchmarks rent to what the dwelling might reasonably command on the open market under a periodic standard contract.
• Improvements carried out by the contract-holder (not under an obligation to the landlord) are disregarded — the valuation looks at the property without those improvements.
• Any reduction in value caused by the contract-holder's failure to maintain the property is also disregarded.

The committee is not limited to choosing between the existing rent and your proposed figure. It can determine a rent that is lower, equal to or higher than what you asked for.

What Happens to the Rent Pending the Decision

While the referral is open, the contract-holder is advised to continue paying the existing rent. Once the committee issues its determination, the new rent applies retrospectively from the effective date specified in your original Form RHW12.

If the committee sets a higher rent than the existing amount, the contract-holder owes the difference as arrears back to the effective date. If lower, you must credit the overpayment.

Unlike the English system, Welsh legislation contains no statutory discretion for the tribunal to defer the effective date on grounds of hardship.

Protecting Yourself

Before serving Form RHW12 on a converted contract, gather local comparable lettings data — recent asking rents for similar properties in the same area. If the contract-holder refers your proposed figure, the committee will weigh market evidence. Having your comparables ready shortens the process and strengthens your position.

The Wales Rent Increase Guide includes a contract classification checklist, a RAC preparation worksheet and the full Section 123 compliance sequence for both converted and newly granted contracts.

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