Tenancy agreements – Using the correct agreement

People often talk about getting a tenancy agreement as if it were the same as getting a table or new kettle for the property.  Anything will do.

However a tenancy agreement is a very important document.  It contains the rules which govern how your tenant is going to use your property – your valuable investment.

It also needs to reflect the sort of tenancy you have.  And not all tenancies are the same.

ASTs and Common law tenancies

Most tenancies nowadays are assured shortholds, and most tenancy agreements are drafted on that basis.

However some tenancies are different.  For example if the tenant is a limited company, or if the landlord lives in self contained accommodation in the same building (except where that building is a purpose built block of flats) then the tenancy cannot be an AST.  It will be a common law tenancy.

Although giving a tenancy agreement designed for an AST to a common law tenant will not invalidate the tenancy – it is not a good idea.

For example, if your tenant is a common law tenant (maybe because you are a resident landlord)  then the correct notice to  serve if you want the tenant to leave is an old style notice to quit.  However if you serve this on your tenant and he takes his paperwork to a lawyer and forgets to tell him that you live in the same building – the lawyer will assume that the tenancy is an AST – and tell the tenant that you have served the wrong notice and that he should defend the claim.

The tenant won’t succeed in his defence but the defence will have delayed the grant of your possession order which, if he is not paying rent, could be expensive for you.

However if the tenancy agreement had correctly stated that the tenancy was a common law one, the lawyer would have known the notice was correct and would have advised the tenant that there is no defence and to concentrate on finding somewhere else to live.

Shared properties

Most properties rented out today are rented to more than one person sharing.  In most cases all the tenants will sign the same tenancy agreement.

However in some circumstances it is better to give tenants individual tenancy agreements for their room and shared use of the common parts.  However if you do this – you need to use a tenancy agreement which is drafted for this situation.  Your ‘bog standard’ AST will not be suitable.

Other variants

It is also a good idea to use a specialised agreement if:

• You want to incorporate a guarantee into the tenancy agreement
• You are going to allow your tenant to keep a pet
• You are going to rent out the property with bills included in the rent
• You want to include the special deposit clauses if you are using the TDS / Deposit Guard tenancy deposit scheme (although this is no longer mandatory)

Then maybe the tenancy will require a special clause.  For example

• a break clause
• a clause incorporating your headlease
• a clause allowing your gardener access to do spring pruning in the garden

And so on.

Finding the correct agreement

There is a lot of choice with tenancy agreements:

• You can buy Lawpack and other tenancy forms from stationers such as WH Smith and Staples
• If you are a member of a landlords association you can use their agreements
• You can buy from one of the online forms providers such as Oyez
• Some sites, such as Property Hawk, provide free tenancy agreements you can download

However, are these suitable for your situation?

If you are renting out a property to one or more tenants sharing the whole property under an AST, then most of these will be suitable for you.  Although I would suggest you read the agreements carefully, particularly if they are free.

However if there is anything unusual about your tenancy, you may find that the standard agreement types are unsuitable.  In which case you may need to hunt around.

If you are not sure what type of agreement is suitable for your situation, note that I have a free Which Tenancy Agreement Guide on my Landlord Law site, which will guide you by question and answer to the correct type of tenancy for your situation.  Its worth a look.

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