Tenancy agreements are the foundation of the relationship between you, your tenant and the property. Although both you and your tenant have various statutory rights that will exist even if you only have an oral agreement, we would recommend you never enter into any tenancy without clear, written terms. That way, you have proof of what was agreed at the outset, in case you run into any problems with your tenant down the line.
The type of tenancy created depends on the circumstances of the let, but, in most cases, if you allow a tenant to occupy a property and they pay rent, this will be legally considered an AST - regardless of whether a licence or other type of agreement has been signed, and even if there’s no written agreement at all. As such, most The type of tenancy created depends on the circumstances of the let, but, in most cases, if you allow a tenant to occupy a property and they pay rent, this will be legally considered an AST - regardless of whether a licence or other type of agreement has been signed, and even if there’s no written agreement at all. As such, most in the Private Rented Sector today are assured shorthold tenancies (ASTs).
The first thing to ensure is that you are using an up-to-date agreement. With lettings legislation being reviewed regularly, some changes will have an impact on the terms in the standard tenancy agreement – such as the Tenant Fees legislation that came into force in June 2019 - so check that whatever you and your tenant sign is the latest version.
If we let your property or fully manage, then an up-to-date tenancy agreement is provided as part of your fees.
10 things that must be included in a tenancy agreement
- The names of all parties.
- The address of the property.
- The start and end date of the tenancy. Although there is no legal minimum or maximum term for an AST, they commonly have an initial fixed term of 6 or 12 months. However, if you have a buy-to-let mortgage, check the terms as your lender might limit the maximum term. After that, the tenancy can continue via one of two means:
- It can be renewed by signing a new Assured Shorthold Tenancy.
- The contract can simply become a ‘periodical’ or ‘rolling’ tenancy, which can be ended at any point by either party giving the required notice.
- Details of the rent: the price, when it’s due and how it should be paid. If you want to charge interest on late rent payments, you must state the interest rate and when and how it will be applied, bearing in mind this is currently restricted to 3% above bank base rate under the Tenant Fees legislation. Make sure you state that rent is payable in advance, otherwise it will be payable in arrears by default.
- Details of when and how the rent will be reviewed.
- Deposit information: the amount, information on how it will be protected and details about when all or part of the deposit can be withheld. If this is not done, you may not be entitled to make any deductions at all!
- Tenant obligations/responsibilities. It’s particularly important that the tenant is clear about their maintenance responsibilities, including keeping the property watertight and protecting it against condensation and frost damage.
- Landlord obligations/responsibilities. You should be aware of all your statutory legal rights and responsibilities, which apply even if you omit them from the agreement!
- Bills that the tenant is responsible for. For example, if council tax, water and sewerage or broadband, etc. are included in the rent, this should be clearly stated in the agreement.
- Whether pets are allowed. If there are any particular circumstances relating to the let, such as if the tenant has a pet, you may want to insert additional clauses into the agreement or set out terms in an accompanying document, which should be referred to in the main body of the agreement, however, these need to be ‘fair’ and not contradict statutory law.
Making changes to the standard Assured Shorthold Tenancy
Tenancy agreements must (and do) comply with statutory law. Laws passed in parliament are legally binding and enforceable, regardless of what is stated in a tenancy agreement. So, even if a legal right or responsibility has been omitted from the agreement signed by you and your tenant, it still applies. In the same way, if you were to insert a clause that contravened a tenant’s statutory rights, that clause would be invalid, because all agreements must be fundamentally ‘fair’ and lawful. It’s also important to understand that you cannot evict tenants other than through the courts, using the proper procedures.
In short, just because you put something in the agreement, it doesn’t necessarily mean anything! As it stands, the AST should be perfectly appropriate but if you do want to add or amend any terms or clauses, you should consult a lettings legal specialist to make sure the changes are legally sound.
Make sure you don’t invalidate your agreement
It’s important to be aware that there are certain things that could result in you being unable to enforce the tenancy agreement:
If the deposit is not correctly protected and/or the required prescribed information is not given to the tenant, this could affect your rights to end the tenancy – regardless of the length and notice period stated in the agreement.
‘How to rent’ guide
You must provide your tenant with a copy (printed or digital) of the latest version of the government’s ‘How to rent’ guide, which gives them basic details about their rights and responsibilities and provides checklists for the various steps in the process of renting. If you don’t provide this information, you may be unable to carry out an eviction under a section 21 notice.
Although certain things may be stated in the agreement as the tenant’s responsibility, ultimately you have the legal duty to ensure the property remains in a good, safe condition. For example, while you may have specified that the tenant must keep the property well ventilated to help avoid surface mould forming, if they fail to do so and mould subsequently becomes an issue, you must fix it in order to comply with the Homes (Fitness for Human Habitation) Act. If you don’t, you may be unable to evict the tenant.
Gas safety certificates
You must have an annual Gas Safety Inspection carried out on any property that has a gas supply. The inspector will provide you with a certificate, which must be given to your tenants, both before they rent the property and annually thereafter. If any of this is not done, you may not be able to serve a valid section 21 notice.
Changes due to Covid-19
Whatever is currently in your tenancy agreements, it is important to be aware that temporary laws have been passed during Covid-19 which could change some of the existing clauses, for example:
Notice period for evictions (England)
If you want to bring the tenancy to an end via a section 21 notice, you must now give your tenants six months’ written notice (as of 29th August). If you are evicting them via section 8, the notice period may be shorter, depending on the reason.
While evictions are still relatively rare, the Covid-19 pandemic has undeniably had an effect on some tenants’ ability to pay rent, so it’s important you have a tenancy agreement that states very clearly the responsibilities for paying rent and the process for ending the tenancy if the tenant either defaults or simply feels they can no longer afford to stay in the property. (See our blog covering the latest rules around evictions.)
Visiting a property
While we still have a pandemic, you should only make essential visits in person. Then, in addition to giving the tenant the required 24 hours’ notice stated in the tenancy agreement, you should take the following measures:
- Check the current national and local Covid-19 regulations regarding the number of households that can meet indoors
- Check that the tenant is happy to allow the visit
Beforehand, ask the tenant:
- Are they currently isolating or shielding?
- Do they currently have any symptoms of coronavirus?
- Have they had or tested positive for Covid-19?
When you visit:
- Make sure you observe social distancing
- Wear a mask
- Avoid touching surfaces as far as possible
- Help prevent infection by having the doors and windows open as much as you can
Read more in our blog: ‘Letting legally and safely during the Covid-19 crisis’.
Houses in Multiple Occupation
In an HMO, your tenants will be classed as one household for the purposes of coronavirus restrictions. As a matter of best practice, you should do all you can to reassure your tenants and help them stay safe, including making sure they know what do if someone in the house displays symptoms or tests positive, for instance by emailing them the government guidance.
In communal areas:
- Ventilate as much as possible
- Supply hand sanitiser and surface wipes and make sure tenants know to disinfect surfaces after use
- Arrange for more frequent cleaning, e.g. if the tenancy agreement states it will be carried out fortnightly, consider changing that to weekly
In tenants’ rooms:
- Ensure they have a good WiFi service – upgrade it if necessary
- If they are working from home, consider whether they need a suitable desk and chair
If you have to cancel cleaning services because tenants are self-isolating, you should provide sufficient cleaning materials for the tenants to do it themselves.
Depending on restrictions in your area and if your tenants are having to self-isolate - or even if the tenant or contractor are simply very concerned - you may not be able to arrange for regular maintenance and legally-required works to be carried out. In that case, make sure you document all your communications clearly, so you can show every effort was made to comply with the terms of the tenancy agreement. Any works that have been delayed or postponed should be rescheduled as soon as it is safe and possible to do so.
Cleaning between lets
If you have a change of tenancy during the pandemic, we would advise you use a professional cleaning company and specify that you require a deep clean with full disinfection of all surfaces. You have an obligation to provide safe accommodation, so it is vital you ensure there is no possibility of cross-contamination between tenants.
Where possible, leave 72 hours before the end of a tenancy and a new one beginning.
If you would like to discuss anything relating to the terms of a tenancy, simply call into your local Reeds Rains branch and one of the team will be happy to discuss it with you.