Top 10 things to know about tenancy agreements
The tenancy agreement is an important document that sets out the terms and conditions of the let, including the rights and responsibilities of both landlord and tenant. The standard agreement in England and Wales is an Assured Shorthold Tenancy agreement (AST) and this is what the below relates to. (In Scotland, it is a Private Residential Tenancy – information can be found on the Scottish government website.
- Make sure the agreement is an up-to-date version. Lettings legislation is under constant review and some changes in the law will affect clauses, terms and conditions in the standard tenancy agreement. So, always check that the version you and your tenant are signing is the latest one. If we let and/or manage your property, we invest heavily so you can rest assured our tenancy agreement is legally up to date to protect both tenants and landlords.
- Tenancy agreements must (and do) comply with statutory law, beware of ‘unfair terms’. The law, as passed in parliament, is legally binding and enforceable, regardless of what is stated in the tenancy agreement. That means even if a legal right or responsibility has been omitted from the agreement, it still applies. Similarly, if a clause is inserted that contravenes a tenant’s statutory rights, it would be invalid and considered ‘unfair’, regardless of whether the tenant had signed the agreement. For example, you can’t insert a clause to ‘repaint the kitchen every year’ or change the notice period.
- Tenancy agreements can be oral. Because various rights and responsibilities are statutory, they can apply, for example once a Landlord has accepted rent from a Tenant it can become legally binding, even if there is no written agreement. However, without anything in writing, there is no proof of the terms agreed at the start of the tenancy, which can lead to problems. We would never recommend a tenancy is entered into without clear, written terms.
- Length of agreement. The initial fixed term of a tenancy under an Assured Shorthold Tenancy is typically a minimum of six months through to 12 months, after which it can be renewed by signing an new Assured Shorthold Tenenacy or simply become a ‘periodical’ or ‘rolling’ tenancy, which can be ended at any point by either party giving the required notice set out in the tenancy agreement. However, as more mortgage lenders are allowing longer tenancies, agreements up to three years can also be signed.
- Notice to leave. Assuming no terms have been breached, a landlord must give the tenant a minimum of two months’ notice to leave by way of the issuing of a Section 21 notice. The tenant must give the landlord a minimum of one month’s notice, in writing. A tenant can’t be asked to leave until the end of the initial fixed term of the agreement, so if it was signed for a minimum initial term of 6 months, the earliest you can issue a notice to leave is month four of the tenancy.
Other key information which should be included in any tenancy agreement includes:
- All rent-related information. This includes the amount, when it’s due and the expected payment method. If you wish to charge interest on late rent payments, you must state the interest rate and when and how it is applied.
- Services and utilities included in the rent. If council tax, water and sewerage or broadband, etc. are included in the rent, this should be clearly stated in the agreement.
- Maintenance responsibilities. These should be outlined so that it’s clear to the tenant what they are responsible for – such as mowing the lawn – along with details of expectations for keeping the property wind and watertight and protecting it against condensation and frost damage.
- Additional clauses or appendices. If you are allowing a pet in the property, for example, the terms should be either inserted as a clause in the agreement or set out in an accompanying document, which should be referred to in the agreement.
- Deposit requirements. Information about deposit protection should be included in the agreement. Be aware that if the deposit is not correctly protected and/or the required prescribed information is not given to the tenant, this could affect your rights with regard to ending the tenancy – regardless of the length and notice period stated in the agreement.
We invest heavily in ensuring our tenancy agreements are up to date legally to protect both landlords and tenants. This year we have already had to change our agreement three times to keep up with latest legal rules and regulations. If you are letting yourself with your own agreement and 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.