Tenancy Agreements: the bedrock of successful letting.

Property experts agree that a comprehensive written tenancy agreement is the basis for a successful landlord/tenant relationship. A tenancy agreement is the contract between a landlord and tenant that can either be a written or a verbal agreement. In essence it sets out the terms of the renting arrangement. At present, there is no legal requirement for landlords to have a written tenancy agreement in place. However, without one a landlord could leave themselves open to considerable risk.

Tenancy agreements – if it’s not written it can be worthless

Under the eyes of the law a valid tenancy is created once a tenant moves in and starts paying rent. Managing a tenancy on the basis of a verbal agreement is a risky business and landlords are strongly advised to have a written agreement in place. If things go wrong, although a landlord is still bound by their statutory responsibilities, without a written contract it is harder to prove what the specific terms of the agreement are. If there is a dispute over rental rates, payment timing, or deposit deductions it will be difficult to prove if it is not in writing.

Tenancy agreements – don’t go it alone

Notwithstanding the risks, a significant proportion of landlords today, particularly those new to renting or renting to family or friends, do hot have a written tenancy agreement in place. The ARLA (Association of Residential Letting Agents) says it is these types of lettings, that are often based on a verbal agreement, that are most likely to go wrong. If a dispute arises without a written contract, detailing the terms of the tenancy in a transparent way, things can get messy very quickly. Here at LegalforLandlords, we recommend that a proper written tenancy agreement should always in place, no matter who the tenant is. We advocate that the tenancy agreement should be tailored to suit the needs of the landlord and property. A standard ‘off the shelf’ or template tenancy agreement downloaded from the internet will not suffice as the devil will be in the detail. The contract will need to be customized, for example, if pets are not allowed in the property the tenancy agreement must stipulate this. The tenancy agreement must also be compliant with the statuary and regulatory requirements on landlords. Needless to say with so much at stake most property experts advise landlords to seek legal advice when drawing up a tenancy agreement.

Tenancy agreements – what should be in them?

A tenancy agreement should include the following;

• The terms of the rental agreement, i.e. tenancy dates, rental price, how and when rent is paid, timing and conditions for rental review
• Deposit amount and the approved tenant deposit scheme the landlord subscribes to
• Details of deposit deductions or terms on which it can be withheld
• Outline the type of tenancy agreement. Most new tenancies are assured shorthold tenancies (ASTs)
• Position on sublets / lodgers
• Maintenance of the property be it the landlord or a letting agent
• Conditions on which the tenancy can be terminated
• Property inventory including details of contents and condition
• Which bills are to be paid by the landlord and which by the tenant
• Access to the property
• The condition the property should be returned to once the tenancy has ended

The tenancy agreement should not include anything that may indirectly discriminate against tenants.

Tenancy agreements – know what you are signing

Finally, when agreeing a tenancy agreement it is important that both the landlord and tenant fully understand the terms of the tenancy agreement. It is important that both parties spend time going through the document. Everyone needs to be clear about their
responsibilities under the agreement. It is vital that both sign the tenancy agreement before the tenant takes up occupancy. The agreement is only binding once it is signed by both parties. Both parties should also be issued with a signed copy.

Renting should be a positive experience for both tenant and landlord. Tenancy agreements can go a long way to ensure a successful renting arrangement for both parties. If you would like further information or legal advice on tenancy agreements please contact our legal team here in LegalforLandlords. We would be delighted to help. Call us on 0333 577 9050.

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