A landlord's guide to tenancy agreements
Once tenants have been found for a property you intend to rent out, a contract which outlines the terms of your agreement will need to be signed by both parties.
The tenancy agreement should be used to set down the legal terms and conditions of the tenancy, and it can be presented both written and orally.
What types of tenancy are there?
The majority of properties within the UK will be rented out with an Assured Shorthold Tenancy (AST) agreement in place. This particular type of contract is applied in circumstances when the rent is between £250 and £100,000 per year, and is the only type of contract that will offer protection for the deposit paid by the tenant.
Most new tenancies will automatically be issued as AST agreements. An AST agreement may apply as long as all of the following requirements are met:
- If you’re a private landlord or housing association
- If the tenancy began on or after 15th January, 1989
- If the property will be your tenant’s main living accommodation
- If you do not live in the property yourself
An AST cannot apply if:
- The tenancy began or was agreed before 15th January, 1989
- The rent amounts to more than £100,000 annually
- The rent is less than £250 per year (or less than £1,000 in London)
- The agreement refers to a business tenancy, or the tenancy of a licensed premises
- The property is a holiday let
- You are a local council
Other forms of tenancy agreement can include:
- Excluded tenancies or licenses, which will usually apply to those who share their home with a lodger and also share facilities, such as a bathroom or kitchen
- Assured tenancies, which can apply to tenancies with a starting date between 15th January, 1989 and 27th February, 1997
- Regulated tenancies, which can apply to tenancies with a starting date before 15th January, 1989
What should I include in a tenancy agreement?
As with any contract, a tenancy agreement should include the basics, such as the personal details of all people involved, the address of the property and the date from which the contract will be in effect. Make sure all of these details have been inputted correctly. The starting date of the tenancy should also be clearly highlighted, as well as the end date if the agreement is for a fixed term.
The agreement should also outline the length of the lease (i.e. six months, 12 months or more), the cost of the rent and the basis for payment, whether that be monthly or annually. In either case, the document should also include the dates on which any recurring payments will be required. All of the details regarding the deposit made by the tenant, including the amount of the deposit and how it will be protected, should also be included.
You should also consider including the details of any obligations on your part or the part of your tenant, which can include an outline of any bills (such as utilities) your tenant will be responsible for paying in addition to rent. You may also wish to outline who will be responsible for any repairs, aside from those that are your legal responsibility.
It’s common practice to outline the length of the notice period that would be required to terminate the contract should the tenant decide to end the tenancy at any point, as well as any terms which relate to ending the tenancy early. You should also make it clear within the tenancy agreement whether or not you will allow your tenant to sublet the property, or share the property with lodgers.
Please be aware that it is unlawful to include any clause within your tenancy agreement that may directly or indirectly discriminate against a tenant.
How can I prevent discrimination when drafting a tenancy agreement?
When it comes to outlining the terms of your tenancy agreement, you will need to be open to making adjustments. For example, if your tenancy agreement refuses to allow for pets in the property, but your tenant requires a guide dog, the term will need to be amended in order to allow guide dogs in the property. The only time a change such as this can be refused is if you have a very strong reason for not agreeing to it, for example if another tenant residing in the property is seriously allergic to dogs.
A tenancy agreement may not outline discriminatory terms against tenants on the grounds of:
- Being or becoming a transsexual person
- Being married or in a civil partnership
- Being pregnant or on maternity leave
- Any disability
- Religion, or lack thereof
- Sex, or sexual orientation
Can I make changes to a tenancy agreement once it’s been signed?
If you wish to make any changes to the agreement shared between you and your tenants, your tenants will need to agree to said changes before they are implemented in the terms of their tenancy.
How can I end a tenancy agreement and have a tenant move out of my property?
If you would like for your tenants to vacate the property, you will be required to provide them with notice. The methods via which you can give notice will be dependent upon the type of tenancy agreement that has been entered into, and the terms that are outlined therein.
Assured shorthold tenancies (ASTs):
In some cases, it is possible for you to request for a tenant to vacate your property without providing a reason for making such a request. This can only happen if all of the following apply:
- You have protected your tenant’s deposit in a deposit protection scheme
- You have given your tenant at least 2 months’ written notice that they must vacate (a notice to quit), and have outlined the date they must leave by (which has to be at least 6 months after the original tenancy began)
- The tenant has a periodic tenancy, or if they have a fixed-term tenancy and you have not requested for them to leave before the end of the fixed term
You can make a request for your tenants to leave during the fixed term of the agreement, however you will need to have a valid reason for wanting possession of your property as outlined by the Housing Act 1988.
Examples of such a reason can include:
- If your tenant is behind (in arrears) with rent payments
- If your tenant has used the property for illegal purposes
In such circumstances, the notice period you are required to give varies from 2 weeks to 2 months depending on the reason you have for making your request.
Your reason for requesting for your tenant to move out of the property will need to be supported by the House Act 1988.
Excluded tenancies or licenses:
In the case of an excluded tenancy or license, whereby you share your property with a lodger, you only need to give ‘reasonable notice’ to quit. Usually, this means the length of the rental payment period, so if you collect rent weekly, you’ll need to give one weeks’ notice. The notice does not have to be in writing.
What should I do if I have provided notice for my tenant to vacate my property, but they have not moved out before the notice period has expired?
You cannot remove a tenant from your property by force. If you have provided your tenant with fair notice that they are required to vacate your property, and they do not leave the property by the end of the notice period, you will then be able to begin the process of eviction through the courts, if this is the action you wish to take.
At DRN, our team of experts is dedicated to resolving any landlord and tenant issues, providing you with clear, practical advice to help you achieve your desired outcome. Call us on 01282 433241 for further advice and guidance.