A guide for landlords
As a landlord you have certain hopes.
You hope to let your property out to reliable tenants. You hope they’ll keep your property clean and tidy. You hope they’ll pay their rent on time and won’t make a nuisance of themselves.
You hope there will be no problems, but sometimes hope isn’t enough.
Having a tenancy agreement in place can help outline what you expect of your tenants.
It highlights the legal terms and conditions of the tenancy and sets out what will happen if your tenants don’t keep their side of the bargain.
Different types of tenancy
Before drawing up an agreement, you need to know what type of tenancy you are dealing with.
Assured Shorthold Tenancy
The most common form of rental contract is an Assured Shorthold Tenancy (AST). To qualify you must be a private landlord and cannot live in the property yourself. The property must also be your tenants’ main accommodation.
The tenancy cannot be an AST if:
• the rent is more than £100,000 a year, or
• less than £250 a year (£1,000 in London).
If the tenancy is for a holiday let, business tenancy, or tenancy of licensed premises, then it cannot be an AST. It also cannot be an AST if it began or was agreed before 15 January 1989 or if the landlord is a local council.
Excluded Tenancy or Licence
Another form of tenancy is an Excluded Tenancy or Licence.
This type of tenancy agreement covers taking in a lodger to your home and sharing some rooms (such as kitchen or bathroom) with them.
The lodger usually has less protection from eviction than with other types of tenancy agreement.
If the tenancy started between 15 January 1989 and 27 February 1997, it may be an Assured Tenancy. This would see your tenants having increased protection from eviction.
Tenancies starting before 15 January 1989 may be regulated and your tenants will have additional protection from eviction and can also apply for a ‘fair rent’.
Length of Tenancy
A tenancy can run for either a set period of time, which is known as ‘fixed-term’, or on a week-by-week or month-by-month basis, known as ‘periodic’.
Written or verbal?
In England and Wales, if you are a private landlord you can choose to have either a written or verbal tenancy agreement.
It is advisable to put the agreement in writing. Oral tenancy agreements can be difficult to enforce, as there is no proof of what was agreed.
A solicitor who specialises in landlord and tenant disputes can advise on how to enforce an oral agreement.
Outlining the details
In a tenancy agreement, you should include:
• Details of the type of tenancy
• The start and end date of the tenancy
• The names of all people involved
• The address of the property
• Information on the price of the rent, as well as how and when it should be paid
• Details of how and when the rent will be reviewed
• The deposit amount and how it will be protected
• Details of the circumstances when the deposit can be fully or partly withheld (e.g. to repair any damage caused by tenants)
• Any tenant or landlord obligations
• Which bills your tenants are responsible for
You can also include information as to whether the tenancy can be ended early, and if so, how this can be done. Also who is responsible for minor repairs and whether or not tenants can sublet or have lodgers can be included.
The agreement should be signed by both you and your tenant, with each party receiving a copy of the document.
Express and Implied terms
A tenancy agreement can be made up of both Express terms and Implied terms.
Express terms include what was agreed between you and your tenants, or are outlined in the rent book.
Implied terms (although not always specifically agreed between you and your tenants) are legal obligations and rights highlighted by the tenancy agreement.
Common implied terms are that you, as the landlord, have to carry out basic repairs, and that your tenants should not cause deliberate damage to the property.
The terms of the tenancy agreement need to be fair and lawful.
If you try to include terms in the agreement that give you or your tenants more or less than your statutory rights then they probably won’t be enforced if there is a dispute.
Changing the tenancy agreement
Normally you can only change an agreement if both you and your tenants agree.
You should record the changes in writing, either by creating a new written document or amending the existing one.
If you have an oral agreement, then evidence of any changes can be provided if there are witnesses to the new agreement, or if there is evidence of you and your tenants acting on the change (e.g. paying and accepting new rent).
Other information and documents
If you are dealing with a weekly tenancy, you must provide a rent book or similar document to your tenants. It is a criminal offence not to do so.
You must also give your tenants a name and address, regardless of whether you have a written tenancy.
If the tenancy is an Assured Shorthold, you’ll need to supply a basic written terms of the tenancy agreement if your tenants write to you requesting one. You must do so within 28 days of receiving their request.
Dealing with discrimination
By law¸ you must not discriminate against your tenant because of race, religion or belief, sex or sexual orientation, gender reassignment, pregnancy or maternity, or disability.
If there is a term in the tenancy agreement that might discriminate against a tenant or potential tenant (e.g. if someone needs a guide dog, but the agreement says no pets are allowed) then you’ll have to amend this unless you have a very strong reason not to. For example, if one of the other tenants is allergic to dogs.
There are certain steps you must follow if you want your tenants to leave. These differ, depending on what type of tenancy agreement you have.
Removal from an Assured Shorthold Tenancy
With an AST, there are some circumstances when you can take back your property without giving any reason.
Either you must not be asking them to leave before the end of their fixed-term tenancy, or they have a periodic tenancy. The date they must leave by has to be at least six months after the original tenancy began, you have to give them at least two months’ written notice and you must also have protected their deposit in a deposit protection scheme.
If you are still in the fixed term, you can only ask your tenants to leave if your reason is outlined in the Housing Act 1988.
This could include, for example, if your tenants are late with rent payments (‘in arrears’), you want to move back into the property, or your tenants have used the property for illegal purposes.
The notice period you have to give will vary depending on the reason you’re using and could be anywhere between two weeks and two months.
You also need to give a reason outlined in the Housing Act 1988 if you want to end an Assured Tenancy.
Removal from an Excluded Tenancy or Licence
With an Excluded Tenancy or Licence, you only need to give ‘reasonable notice’ to end the tenancy agreement. This is usually the length of the rental payment period and your notice doesn’t need to be in writing.
Your tenancy agreement may include a break clause, which means you can give your tenants notice after this period – although you don’t have a right to possession during the first six months of a tenancy.
If your tenants refuse to leave the property after the notice period, you cannot forcibly remove them without an eviction order.
The process of eviction must be started through the courts.
What if the tenants want to leave?
Tenants can usually end a fixed-term tenancy by giving a written notice before the tenancy ends.
The tenancy agreement should say how much notice they need to give, but it can’t be more than two months and the tenancy will finish at the end of the fixed-term.
If the tenant wants to end a periodic tenancy, they can give notice at the end of a rent period. The period will depend on the rent term, so if they pay rent monthly, they must give a month’s notice.
For Licence Agreements, the licence automatically runs out after a specific date. If your lodger wants to end the agreement they need to let you know before this date.
If your tenant wants to end a tenancy agreement early, unless there is a break clause in the agreement you can insist that they pay rent until the end of the tenancy.
We can help
If you want more information about tenancy agreements, contact our solicitors at Wallace Robinson & Morgan on 0121 705 7571 or email email@example.com.
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