Letting to students: choosing a house share agreement

Lawpack on March 27, 2020

When deciding to let out accommodation to students it is important for landlords to decide on what sort of tenancy agreement to use.

The main choice landlords have is between joint or single shared tenancies, the benefits of which are subjective depending on your preferences and priorities.

In a joint tenancy, tenants have full access to all of the accommodation’s amenities with no one holding exclusive rights to a particular area. Tenants agree among themselves who will get which bedroom and one agreement is used to encompass all occupants.

With a tenancy agreement for a room, on the other hand, rooms are let out individually with tenants holding joint access to communal areas only. They hold exclusive rights to one room.

Under the Housing Act 2004, landlords should also familiarise themselves with the conditions of letting a House in Multiple Occupation (HMO).

The benefits of a joint tenancy

Joint tenancies are generally ideal for groups of people who already know each other and have a loyalty to one another.

This typically prevents one occupant from leaving the accommodation unannounced, placing pressure on its existing occupants to cover their fees and can make life easier for landlords as a result.

The benefit for landlords is that tenants are jointly responsible for all costs and must come to an agreement about how to deal with these themselves.

They also carry a lot or responsibility because if one or all of the them cause a loss to the landlord, perhaps by vacating without notice, the landlord can demand total arrears from any one of the occupants. This prevents the landlord from having to track down each individual.

Although students are exempt from council tax, it is worth landlords noting that under an Assured Shorthold Tenancy (AST), any other residing occupants are required to pay council tax directly to the local authority.

Under an AST, they will also be jointly responsible for paying utility bills directly to their providers.

If a tenant decides to leave, it is the obligation of the remaining tenants to ensure their rent is paid. In most cases, they will find a new tenant, but again, this is their responsibility and not that of the landlords.

If a new occupant is brought in, they must be signed up to a new joint tenancy agreement for the remainder of the term or start a new term.

When an occupant leaves, the matter of the deposit is another issue. The newcomer can pay their deposit to the leaver, allowing the landlord to keep hold of the original deposit.

Furthermore, under the custodial tenancy deposit scheme, landlords can choose whether to hold the deposit as one lump sum or break it down into individual payments for each tenant.

The benefits of a tenancy agreement for a room

Individual tenancies with shared facilities enable occupants to come and go as they please in either short or long-term tenancies.

The benefits of landlords issuing a tenancy agreement for a room to individual tenants is that the landlords then have the right to inspect communal areas without prior notice, whereas they do not have the right to ‘drop in’ unannounced on a joint tenancy household.

In most instances, the landlord is also able to charge higher rates of rent.

One of the minor problems with a tenancy agreement for a room is compatibility among residents. Because they are effectively strangers coming together with no prior friendship, they could clash or fail to make compromises for one another.

This clash could result in a poor occupant driving more reliable residents from the accommodation, which is often a disappointment for landlords.

Moreover, tenants are not jointly responsible for bills, meaning landlords risk picking up the costs of amenities if occupants turn out to be unreliable. However, the property owner can counteract this threat by including bill payments in the rent sum.

This outline is meant as a guideline only for landlords and is not an exhaustive list of the conditions of joint and individual agreements.

Download Lawpack’s tenancy agreement for a room, an agreement for an individual tenancy, approved by Anthony Gold Solicitors.

When landlords need a rent book

Lawpack on March 27, 2020

Rent is the money which a tenant pays the landlord in exchange for their right to occupy the property.

In England & Wales and Northern Ireland the payment of rent isn’t absolutely needed to create a tenancy, but in Scotland it’s vital.

For lodgers the money paid isn’t rent but is simply a licence fee as lodgers don’t have tenancies.

Homeowners should be careful not to describe money paid as rent if they’re not creating a tenancy as it causes confusion and may give the occupier more rights than they intend, but you cannot avoid creating a tenancy by falsely describing a rent payment as something else.

Providing a rent book to a non-tenant will not in itself be enough to allow the tenant to assert that they are paying money as rent despite its title.

The requirement for a rent book

It’s compulsory for all landlords in Northern Ireland to provide a rent book for all tenancies and landlords commit a criminal offence if they fail to do so.

The offence is committed every time the rent is demanded and every 14 days during the tenancy in any case, so landlords who don’t provide one can find themselves being prosecuted for multiple counts of failing to provide the document.

Each carries a substantial fine.

In England & Wales and Scotland a rent book is only required:

  1. where the rent is described in the tenancy agreement as being paid weekly; or
  2. where the rent is actually paid weekly by agreement irrespective of the wording of the agreement.

Where rent is being demanded or paid weekly, it’s a criminal offence to fail to provide a rent book.

Keeping it up to date

Where a rent book is required to be provided it’s also an obligation that it’s kept reasonably up to date.

The purpose of one is to provide a receipt for payments for the tenant and a log of rent paid for the landlord.

Therefore it’s useless to have such a book and then allow it to become hopelessly outdated.

Rent in advance or arrears?

Where payment is due it falls due on the morning of the day stated in the agreement, but the tenant has the whole of that day (until midnight) to make payment.

Where it is stated in the tenancy agreement that rent is payable in advance (such as in Lawpack’s agreements), the tenant will be deemed to be in arrears for the whole period that they are obliged to make payment for once that payment is outstanding.

So if a tenant is supposed to make a payment on the first day of each month in advance for the coming month the tenant will be one month in arrears if they don’t make payment on that day.

Where rent is payable in advance there is no requirement in law that the payment be apportioned and this is only required if the tenancy agreement allows for it.

So if a tenant makes advance payment for a full month and then departs the property part way through the month (even if they do so with the landlord’s agreement), then the landlord is under no obligation to refund the money for the unused portion of that month (even if they relet the property) unless they have specifically agreed to do so.

How to make a property inventory

Lawpack on March 27, 2020

Landlords – protect your property and avoid complications at the end of the tenancy by making sure that your tenant completes a property inventory when the tenancy starts.

One of the most common ‘flashpoints’ between landlord and tenant is arguments about the condition of the property and its contents, and deductions from the damage deposit. Most of these arguments can be prevented by drawing up a detailed property inventory.

Since the introduction of the Tenancy Deposit Scheme too, landlords who want to claim money from their tenants’ deposits now have to prove that damage has been caused. So if you’re a landlord and you don’t keep an accurate inventory, you’ll find it difficult to justify deductions to a tenant’s deposit.

Here is our quick guide to how you can protect your property, your contents and your pocket!

1. Go through the house room by room.

Note on the property inventory all of the contents in each room. Even if you’re letting a property unfurnished, it’s a good idea to have a inventory to record the condition of the walls and carpets, etc., in case of future dispute.

For example, if there is a stain on the carpet or rug before the tenancy starts, include it in the property inventory. Then the tenant cannot be blamed for it at the end of the tenancy and there won’t be a dispute over the tenant’s damage deposit.

2. Check the property inventory form with the tenant.

The property inventory should be prepared in duplicate and then checked with the tenant before they move into the property. The landlord and tenant should each sign of the inventory forms at the foot of every page.

3. Note down any changes to the property inventory.

Any alterations made at that time should be marked on both copies so that they are identical. One of the signed copies of the property inventory should be attached to the tenant’s tenancy agreement and given to the tenant, and the other attached to the landlord’s tenancy agreement and kept safely.

4. Go through the property inventory form at the end of the tenancy.

When the tenant is about to leave, you (or your letting agent) should meet them at the property and go through the inventory with them again, room by room. If some contents are missing or damaged, it’s often possible to sort out how much should be deducted from the damage deposit there and then.

Download and complete an inventory form now, with our Property Inventory eKit. It lists all of the contents of a property, so you don’t have to remember every item, and includes instructions on how to correctly perform a ‘check-in’ and ‘check-out’, as well as guidance on how to calculate damage costs.