Wales Occupation Contract: Fundamental, Supplementary and Additional Terms Explained

Why the Term Classification Matters

Every occupation contract in Wales contains terms organised in a strict legal hierarchy set by the Renting Homes (Wales) Act 2016. Understanding this hierarchy is not optional — it determines which terms a landlord can modify, which ones are locked in place, and what happens when a custom clause conflicts with a statutory provision.

Get it wrong and the offending clause is void. Get it very wrong and the landlord may face an unfair terms challenge under the Consumer Rights Act 2015.

Fundamental Terms

Fundamental terms come from the Act itself. They protect core rights on both sides — things like the right to occupy the dwelling, anti-social behaviour obligations, and the landlord's right to recover possession through proper notice.

There are two grades:

Unalterable fundamental terms (marked F) cannot be removed, weakened or modified under any circumstances. Examples include the anti-social behaviour prohibition under Section 55 and the anti-discrimination provisions under Sections 54A and 54B (in force since 1 June 2026). Section 54A gives contract-holders an unqualified right to allow children under 18 to live in or visit the dwelling. Section 54B prohibits blanket exclusions of benefit recipients.

Alterable fundamental terms (marked F+) can be modified, but only if the modification improves the contract-holder's legal position. Any modification that reduces the contract-holder's rights compared to the statutory default is void and legally ineffective. For example, a landlord could extend the minimum notice period they must give beyond the statutory requirement — but they cannot shorten it.

Supplementary Terms

Supplementary terms are the operational backbone of the contract. They come from the Renting Homes (Supplementary Provisions) (Wales) Regulations 2022 and cover day-to-day matters:

• Who is responsible for utility bills
• The contract-holder's duty to notify the landlord of disrepair
• Rules on changing locks
• Obligations when the dwelling will be unoccupied for an extended period
• Garden and communal area maintenance

These terms are automatically included in the Welsh Government's model written statements. Unlike fundamental terms, supplementary terms can be varied or removed by mutual written agreement between the landlord and contract-holder — provided the variation does not conflict with any fundamental term.

Additional Terms

Additional terms are bespoke clauses that the landlord and contract-holder negotiate to address specific arrangements for the property. Common examples include:

• Pet permissions — a clause explaining how to request permission and setting fair, proportionate conditions for keeping a pet.
• Garden maintenance — specifying who maintains the garden and to what standard.
• Smoking restrictions — prohibiting smoking inside the dwelling.
• Parking arrangements — allocating a specific parking space.

Additional terms must comply with the fairness standards of the Consumer Rights Act 2015. A clause is unfair and unenforceable if it imposes a disproportionate financial penalty, attempts to shift statutory landlord repair obligations onto the contract-holder, or grants the landlord arbitrary entry rights without proper notice.

The Pet Clause Example

A pet clause is the most common additional term Welsh landlords want to include. The legal position is straightforward:

• A pet clause can require the contract-holder to request permission before bringing a pet into the dwelling, but it must allow that request and the landlord cannot unreasonably refuse it or impose unreasonable conditions.
• The clause must not conflict with any fundamental term and must comply with the Consumer Rights Act 2015 fairness standards.
• Any additional charge must be a permitted payment under the Renting Homes (Fees etc.) (Wales) Act 2019. Any security deposit must comply with Section 45 and Schedule 5 of the Act.

When Terms Conflict

The hierarchy resolves conflicts automatically:

1. An additional term that contradicts an unalterable fundamental term is void — it has no legal effect, even if both parties signed it.
2. An additional term that contradicts an alterable fundamental term is void unless it improves the contract-holder's position.
3. A supplementary term variation that conflicts with a fundamental term is void.

This means a landlord can layer additional terms on top of the model written statement, but they cannot use those terms to undercut the statutory protections built into the fundamental framework.

Get the Term Classification Reference

The Occupation Contracts in Wales guide includes a term classification reference that walks through each category with examples, plus a checklist for reviewing custom clauses against the statutory hierarchy before issuing the written statement.

See more Wales guides →