In This Guide
Administration
Being a landlord
Buy to let investment
Choosing the property
Finding tenants
Letting property
Lettings agents
Levels of service
Preparing the property
Problem tenants
Tenancy
1. Types of tenancy
2. Resident landlords
3. Duration and termination of the tenancy
4. Rent increases
5. Rent assessment committee
6. Tenancy agreements
7. What they contain
8. Example agreement
9. Other issues
Tenancy
What they contain
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Although the minimum requirement for a tenancy agreement is information regarding the duration of the term, the amount and frequency of rent payments, most agreements will contain significantly more information that this. Although not all agreements do not cover exactly the same areas in the same format, many of them share the following areas of detail:
There is usually a statement that the agreement is an assured
shorthold tenancy for residential dwelling.
This gives some details about the intended usage of the agreement
- the type of property, the parliamentary act that covers the
tenancy agreement and the maximum duration of the tenancy that
the property can be used for.
Setting out the basics of the agreement, this section identifies
the major parts and parties of the agreement: Landlord, Tenant,
Property, Contents, Term (start date and end date), Rent, Due
date, and Deposit.
Most tenancy agreements tend to be for one year, though many of
them have a six monthly review period that gives you a window
of a month to give your notice and move out. Click here if you
want to find out what happens if you want to leave early. During
the period of agreement, your landlord cannot increase the rent.
The conditions of use set out some basic rules about how the tenants
are to treat the property, such as:
- Not using it as a business premises.
- Not using it for illegal activities.
- Using the property in a tenant like manner (i.e. treating
it like a home and not like a dustbin).
- A set of clauses designed to protect the landlord in case
you cause untold damage to the property.
- The situation regarding the living of pets in the property whatever that may be. This section may also cover things like antisocial behaviour, noise, etc.
Some agreements will specify who is responsible for insuring the
building (usually the landlord) and the contents (usually the
tenants or both the landlord and the tenants) of the property.
Not all agreements will have this section.
This section forms the bulk of the agreement:
- Your responsibility for damage, repairs etc.
- Bills - definition of any (if there are any) utility services
are included in the rent.
- Security requirements - clauses regarding leaving the property
unattended, replacing broken windows, doors and locks etc.
- The condition of the property - keeping it in good state of
hygiene and appearance; maintaining the garden; paying for,
repairing or replacing anything that breaks; cleaning at the
end of the tenancy; maintenance of walls, drains and gutters
etc.
- Contents - your agreement to leave the contents as they are
when you start the tenancy.
- Your conduct whilst living in the property - causing a nuisance;
abiding by the conditions of use.
- Demands regarding the usage and maintenance of things like
portable heaters, ventilation, smoke detectors.
- What happens if you breach the agreement.
- Your period of notice.
- Your right to quiet enjoyment of the property. This means
that the landlord cannot trouble you without good reason.
- The fact that you understand that you are legal accepting the responsibilities set out in the agreement, such as payment of rent, bills etc
It will normally be the landlord's responsibility to ensure that they have settled any outstanding bills that are attached to the property in advance of you moving in. You should discuss this with them to avoid any confusion.
The agreement will also normally describe:
- The landlord's right of entrance to the property for the
purposes of inspection and the notice that he must give, as
well as his or her right of entrance to show round prospective
tenants.
- In many rented properties, the landlord is responsible for
payment of water rates. If this is the case, it will be set
out in the agreement.
- The landlord's rights in terms of collecting any rent arrears.
- Repair obligations that are accepted by the landlord.
- How and when the landlord will return your rent to you at the end of the tenancy.
A large proportion of tenancies are renewed at the end of the
initial fixed period. The right for a tenant to renew the agreement
can be agreed at the start of a tenancy by the way of one or more
"options". This will allow the tenant the option for a further
term by giving, by giving due notice prior to the end of the current
term. A rent increase may be attached to the renewal of the tenancy,
usually in line with inflation.
As you might expect, this defines things the 'The Property', 'The
Landlord', 'The Tenant' and so on.
This is where a legally binding statement reflects the fact that
everyone who signs the agreement has read it, understands it and
agrees to abide by it.
If you ever need to present your tenancy agreement in court as
a legal document, then you need to get it stamped. This is something
that most people don't bother with, but you should if you want
to be fully compliant with the law.
Tenancy agreements must be stamped within 30 days of the date the agreement becomes effective. If this is not done both the landlord and the tenant will be liable to pay a penalty as well as the stamp duty. The landlord pays stamp duty on the counterpart agreement. This is always £5.
The amount of stamp duty payable by the tenant depends on the terms of the tenancy agreement. There is a fixed duty of £5 to the tenant on a furnished letting of a property that is let for less than one year. If the tenancy is one year or over, the amount of duty payable by the tenant is 1% of the annual rent and the premium and is rounded up to the next £5. All unfurnished tenancies a attract stamp duty of 1% of the annual rent for the tenant and is rounded up to the next £5. For tenancies of 7 to 35 years the stamp duty is at 2%.
- There may well be an addendum or attachment to the agreements
if you are using a guarantor.
- Make sure you get a copy of the agreement to keep.
- Many agreements are vague on what is reasonable wear and tear. It is not unreasonable for you to ask the landlord to clarify in writing what is meant by reasonable.
If you are concerned about any of the clauses in your tenancy agreement, question your landlord. If that fails to illuminate you, contact your local citizens advice bureau. Failing that, let us know and we'll see if we can tell you what it means.
Don't feel that the content of the agreement is set in stone. Many things in life are negotiable and a fair proportion of landlords will be willing to work with you to make sure that the agreement suits both parties.
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