Why a written tenancy agreement is necessary

Lawpack on March 27, 2020

Having a tenancy agreement is vital for any landlord. It’s so important to get the tenancy in writing as it protects your property, sets out your obligations and that of your tenant’s, plus it prevents potential disputes between you and your tenant in the future.

Although there is no legal requirement for you to create an assured shorthold tenancy (AST) in England and Wales, all landlords should ensure that their tenants have signed a written tenancy agreement prior to letting them into the rental property.

But in Scotland all landlords must have a written tenancy agreement for the tenancy to be a provate residential tenancy (PRT).

The disadvantages of not getting it in writing 
  • If you make arrangements informally with your tenant, there may be arguments later about the tenancy terms, even if these were clearly discussed when the tenant moved into the property.
  • Once a tenant is in occupation, you cannot then force them to sign an agreement that varies the terms of their tenancy, so it’s essential that this is done before the tenant goes in.
  • You will not be able to use the accelerated possession procedure to evict the tenant, where there is no written agreement.

The advantages of getting it in writing 

  • A formal agreement protects your position and regulates the tenant’s use of the property.
  • If you intend to take a damage deposit, which has to be protected under one of the statutory tenancy deposit schemes, you will need to make an agreement.
  • If no written tenancy agreement is provided, you’re required, by law, to provide the tenant with written details of the main terms of their tenancy within six months; so you may as well provide a proper written agreement to begin with.
  • Housing Benefit offices require tenants claiming benefit to produce a signed tenancy agreement.
Lettings not needing an agreement

Although all tenancies should have a formal written agreement, licences don’t always need them. For example, written agreements are not necessary in the following circumstances:

  • Letting a room in your house to lodgers. However, we still do advise you to get it in writing with a Lodger Agreement.
  • Bed-and-breakfast accommodation.

But even if a formal tenancy agreement isn’t provided in these circumstances, there should always be some paperwork to prove the terms of the letting, in case there is a dispute at a later date.

More information

Top tips on letting for first-time landlords

Lawpack on March 27, 2020

As the housing market slows, more and more people are being driven to rent property and rents are reaching record highs. Many people are also becoming landlords for the first time as they can’t sell their property and decide to rent it out instead.

Demand for rental property has never been so high and it’s a great time to generate extra income as a landlord.

But what are your obligations as a landlord and how do you get ready for tenants? Here are our top tips on what you need to think about when renting out a property and what you need to do to protect yourself, your property and maximise your rental income.

1. Preparation

Before potential tenants view the property, make sure that it’s clean and that you have finished any DIY. Will you let the property out as furnished or unfurnished? Remember that if you’re providing ‘contents’, then you need wider insurance cover.

2. Health and safety

It’s vital that you comply with fire, gas, electric and furniture regulations. These obligations are discussed in detail in our book The Complete Guide to Residential Letting, written by a solicitor specialising in landlord and tenant law.

You must make regular safety checks and keep records to protect your tenants. Safety checks also help to ensure that your insurance is valid.

3. Using a letting agent

Letting agents are useful if you don’t have time to manage your rental property, but they take between 8-15% of the rental income profit. Although they help you to find tenants, do still get involved with the tenant interviews as it’s important that you’re comfortable with the person moving in. Also, do make sure that you’re getting the most competitive deal from your letting agent.

4. Finding tenants

If you’re letting out the property without using a letting agent, then you need to reference the tenants yourself. Websites, such as Rentcheck’s Tenant Checking Service, can do it for you at a fixed price. It’s vital for you to find out if your tenant is able to pay the rent with a credit check.

5. Know landlord and tenant rights

When renting out a property it’s important that you know your obligations as a landlord. If you want to enter the tenant’s home, for example, then you must give the tenant at least 24 hours’ notice. Lawpack’s Landlord’s Letters provides you with all the template letters you need to help you easily liaise with your tenant.

6. Draw up a tenancy agreement

A tenancy agreement is a great way of protecting your rights and the property. Lawpack’s tenancy agreements are all solicitor-approved and include a long list of terms and conditions, which outline, among others, whose responsibility it is to upkeep the property. A tenancy agreement outlines in writing how long the tenancy will last and the notice period needed to evict the tenant.

Find out more on the dangers of not making a tenancy agreement.

7. Take a deposit

Getting a deposit is a good way of protecting against any damage and all landlords must register a tenant’s deposit with an approved Tenancy Deposit Protection (TDP) scheme. It’s usual for the deposit to be 4-6 weeks’ rent.

8. Make a property inventory

Making a detailed and accurate property inventory is vital if you want to protect your rental property, particularly if it’s furnished. A property inventory proves how the property looked and what was provided the day the tenant moved in and is proof of evidence should there be a dispute over the deposit or any damage to the property.

9. Get insurance

It’s important that you get landlord insurance cover, as most standard house insurance policies don’t provide the level of protection landlords need. A good insurance policy should cover professional tenants, students and DSS tenants, loss of rent, unoccupied periods, alternative accommodation, tracing and accessing leaks, accidental damage, legal expenses and liabilities, plus rent protection.

10. Create an Energy Performance Certificate

By law landlords need an Energy Performance Certificate, detailing the energy efficiency of the property, in order to let or sell it.

10. Eviction

If your tenants are becoming a nuisance and you need them to leave, then you need proof that the tenants have broken the terms of their tenancy agreement. If the tenants are in rent arrears you can start eviction proceedings with Lawpack’s Section 8 Notice.

Find out more on the eviction process with Lawpack’s Tenant Eviction Kit.

More information

Which tenancy agreement do I need?

Lawpack on March 27, 2020

You’ve got your rental property and found your tenant – all you need to do is get them to sign a tenancy agreement. But which one do you need.

If you’re a landlord who thinks tenancy agreements are unnecessary, think again! A tenancy agreement is vital as it sets out the rights and obligations between you and your tenant and, as a result, protects your property and your finances. But you must use the correct tenancy agreement for the right type of tenancy concerned.

Lawpack has a wide range of tenancy agreements, including assured shorthold tenancy agreements, non-assured shorthold tenancy agreements, private residential tenancy agreements, company let tenancy agreements and lodger agreements. But which tenancy agreement should you use?

England and Wales

AST or non-AST?

Most tenancies in England & Wales are assured shorthold tenancies (ASTs) and are regulated by the Housing Act 1988.

Some tenancies are exceptions, however, and you may need to use a non-assured shorthold tenancy agreement if any of the following applies:

  • The rent is at the rate of over £100,000 a year
  • The tenant is living in self-contained premises in the same building as you
  • The tenant is a limited company
  • The property isn’t the tenant’s main home (e.g. a weekend cottage)
  • It’s a holiday let

Find out more about non-AST tenancy agreements and which one you need to use below.

Assured Shorthold Tenancy (AST)

Assuming your tenancy is an AST, slightly different forms of tenancy agreement need to be used depending on whether:

  • there is one or more tenants living in the whole flat or house, or
  • there are a number of tenants who all have separate tenancy agreements for their own room, with shared use of the rest of the property

Lawpack publishes the following AST tenancy agreements you can use:

Unfurnished Tenancy Agreement / Furnished Tenancy Agreement

You can use either of these AST tenancy agreements if you, as the landlord, don’t live at the property. Both tenancy agreements can be used for a single tenant who occupies the property on their own, or a group of tenants who jointly occupy the property and share responsibility.

If the tenants are sharing and sign this tenancy agreement as a group, it’s best if they are all family or friends as problems can arise if you’re letting to people who don’t know each other and they want to leave the property at different times.

Tenancy Agreement for a Room

It may be preferable for you to get them to sign a tenancy agreement for their individual room, which gives them shared use of the rest of the property. When giving your sharing tenants a separate tenancy agreement, it’s best to use a non-resident house share/flat share agreement.

This tenancy agreement can be used if the tenant is living in a room in the property where you, as the landlord, are not resident.

Under this AST tenancy agreement, the tenant has exclusive occupation of their designated room and will share the use and facilities of the house or flat (e.g. bathroom, toilet, kitchen and sitting room) with other occupiers of the furnished property.

Non-Assured Shorthold Tenancy

In England & Wales non-assured tenancy agreements are also known as ‘common law’ tenancy agreements as they are governed by underlying common law and are not regulated by the Housing Act 1988.

Lawpack has the following non-AST tenancy agreements you can use:

Contractual Tenancy Agreement (Non-Assured Shorthold Tenancy Agreement)

This non-AST tenancy agreement (for England & Wales) should be used if:

  • The annual rent exceeds £100,000 a year
  • The premises being let is self-contained accommodation in a property that has been converted from a single property to multiple units (e.g. a house converted into flats), where you (the landlord) live
  • The property isn’t the tenant’s principal home (e.g. a weekend cottage)

This common law tenancy agreement can be used for a single tenant who occupies the property on their own, or a group of tenants who jointly occupy the property and share responsibility.

Company Let Tenancy Agreement

This Company Let Tenancy Agreement should be used if you want to let a house or flat in England or Wales to a company.

This common law tenancy agreement should be used where the tenant is a company and the occupier of the property is an employee or visitor of the company, with their family.

What if I use an AST by mistake?

If you accidentally use an AST instead of a common law tenancy agreement, don’t panic. It doesn’t mean that your tenant isn’t entitled to live in the property and doesn’t have a proper tenancy. But some parts of the tenancy agreement – those relating to the AST – will be misleading and could cause problems later down the line (e.g. you may have difficulty evicting the tenant at a later date).

Other letting agreements

Holiday Letting Agreement

This rental agreement can be used if you’re letting out a furnished property in England & Wales on a holiday let basis (e.g. for a limited period or holiday). It can be used with most types of holiday let properties (e.g. a house, apartment, flat, caravan or cottage).

The Holiday Letting Agreement is specifically excluded from the Housing Act 1988, so tenants have no security of tenure and must vacate the property at the end of the fixed term, or if found to be in breach of the terms of the Holiday Let Agreement.

Lodger Agreement

You can use this Lodger Agreement when you want to rent a room in your furnished home and are happy for the lodger to share the common parts of the property (e.g. bathroom, toilet, kitchen and sitting room) with you. But this Lodger Agreement can only be used in situations where the property is your principal home.

Scotland

Private Residential Tenancy agreement (PRT)

PRTs are similar to ASTs in England & Wales. You can use a short assured tenancy agreement if you, as the landlord, don’t live at the property.

Lawpack has the following Scottish PRT tenancy agreements you can use:

Unfurnished Tenancy Agreement / Furnished Tenancy Agreement

Both of these PRT tenancy agreements can be used for a single tenant who occupies the property on their own, or a group of tenants who jointly occupy the property and share responsibility.

Tenancy Agreement for a Room

This tenancy agreement can be used if the tenant is living in a room in a furnished property where you, as landlord, are not resident.

Under this PRT tenancy agreement, the tenant has exclusive occupation of their designated room and will share the use and facilities of the house or flat (e.g. bathroom, toilet, kitchen and sitting room) with other occupiers of the property.

Other letting agreements

Holiday Letting Agreement

This agreement can be used if you’re letting out a furnished property in Scotland on a holiday let basis (e.g. for a limited period or holiday).

It can be used with most types of holiday let properties (e.g. a house, apartment, flat, caravan or cottage).

The Holiday Letting Agreement is specifically excluded from the Housing Act 1988, so tenants have no security of tenure and must vacate the property at the end of the fixed term, or if found to be in breach of the terms of the Holiday Let Agreement.

Lodger Agreement

You can use this Lodger Agreement when you want to rent a room in your furnished home and are happy for the lodger to share the common parts of the property (e.g. bathroom, toilet, kitchen and sitting room) with you. But this Lodger Agreement can only be used in situations where the property is your principal home.

Northern Ireland

Private Tenancy

Lawpack has a Northern Ireland Tenancy Agreement which complies with the regulations that apply to private residential tenancies in Northern Ireland.

This private tenancy agreement can be used for a single tenant who occupies the property on their own, or for a group of tenants who jointly occupy the property and share responsibility.

The terms and conditions included in this tenancy agreement meet the legal requirement in Northern Ireland that a ‘Statement of Tenancy Terms’ must be given to the tenant. Plus it includes a Property Inventory of Furnishings, which all tenancies are required to have by law in Northern Ireland.