Why you need to have the right tenancy agreement for your lettingMake Text Bigger
This is the fourth in a series of 10 articles written by specialist landlord & tenant solicitor Tessa Shepperson, founder of the online Landlord Law Service.
Tenancy agreements are important. Although it is possible to create a tenancy without a tenancy agreement, this is a very bad idea. For example:
- you will have no record of what was agreed – how can you prove (for example) that the agreed rent was £500 per month if the tenant swears blind that you said £400?
- there will be no point in taking a deposit, as your right to make deductions from a deposit can only stem from the proper clause being included in a tenancy agreement
- if you need to evict your tenant you will not be able to use the quicker and cheaper accelerated procedure as this can only be used where there is a written tenancy agreement.
So you need a tenancy agreement. But not just any old tenancy agreement. It should be one that is suitable to your situation. For example:
- are you a resident landlord?
- are you renting out a room in a shared house?
- do you want to have a tenancy where bills are included in the rent?
- are you happy for your tenant to keep a pet?
For each of these, you should have a tenancy agreement specifically designed for that situation. For example:
- if you are a resident landlord (e.g. if you are renting out a granny annex or garden flat in your house) this is not an assured shorthold tenancy (AST) but a common law tenancy and therefore the standard AST agreements should not be used
- many shared houses are rented on a room by room basis rather than to a group of people signing one tenancy agreement together. But you need to have a tenancy agreement which reflects this or you could find yourself in difficulties
- if you are going to make the rent inclusive of bills, it is a good idea for the tenancy agreement to set out the arrangement for this, and specify exactly what bills will be included. And make provision for you to be able to increase the rent if the tenants run the bills up too much
- most landlords say ‘no pets’ but there are many responsible people with pets who would make excellent tenants. However the tenancy agreement should contain special clauses where you can record information about the agreed pet, and (very important) details of someone who can look after it if something happens to the tenant (so you won’t be stuck with it!).
Then there are special clauses you may want to include in the tenancy agreement:
- a common clause in a tenancy with a longer term, is a break clause, allowing you to end the tenancy early if the tenants turn out to be less than satisfactory
- or you may want a clause requiring the tenant to allow your gardener access to do essential pruning to the trees and shrubs in the garden at certain seasons
- or perhaps the property is a flat where you are a leaseholder and you want the tenant to be bound by the terms of your lease.
You need to be careful about drafting clauses for tenancy agreements yourself; however, under the Unfair Terms in Consumer Contracts Regulations 1999, individual clauses in tenancy agreements can be invalid if they are considered ‘unfair’.
There is not space in this article to discuss this in detail, but here is one example. A clause prohibiting pets will be considered unfair and invalid unless you include wording which says that the tenant can request permission for keeping a pet, which the landlord must not unreasonably refuse. Even if you are 100% certain that you will never give permission for a pet, if the clause omits that wording the clause will be invalid, and the tenants will be able to keep as many ill trained Alsatians and Doberman dogs as they wish.
So you see that a properly drafted tenancy agreement is important. That standard AST you downloaded from a free site may be suitable for your letting. But then again it may not. Do you want to risk it?
My Landlord Law site has an extensive selection of tenancy agreements which you can read about here, and you can customise our tenancies by adding extra clauses. There is also a free Which Tenancy Trail which can help you work out which tenancy type you need. Why not take a look?
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OTHER ARTICLES IN THIS SERIES
1. Have you got what it takes to be a landlord?
2. Make sure your property is legal before you rent
3. Check out your tenants or live to rue the day
4. You are here | Why you need to have the right tenancy agreement for your letting
5. All about tenancy deposits
6. How to increase rent the proper way
7. Help! My tenant has stopped paying rent – what do I do?
8. I think my tenant has left, can I change the locks?
9. What do you do if your tenant won’t leave when their section 21 notice expires?
10. The various and wondrous ways that tenancies end.
Tessa Shepperson is a solicitor specialising in residential landlord and tenant law. She practising online via her web-site Landlord Law www.landlordlaw.co.uk and blogs at the Landlord Law Blog www.landlordlawblog.co.uk
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