- A tenancy agreement should be easy to understand and relevant to both parties. Above all it needs to be legally correct. The following details the information that should be included in a tenancy agreement
- A tenant must be given an address in England and Wales where they can serve notices on their landlord. This is laid down in the Landlord and Tenant Act at Section 48. There is no legal requirement for the tenant to pay rent if this information is not provided.
- The address can be the address of a letting agent, a solicitor or even a friend. It doesn’t have to be the landlords own address, and many prefer not to disclose this to tenants. Having said that, it is an offence under the Landlord and Tenant Act (Section 1) to not supply an address to a tenant within 21 days if specifically asked for it in writing by a tenant.
- Within the tenancy agreement should be the full address of the rental property and the full names of all the occupants including both tenants and any permitted occupiers. It should be clear in the agreement which is which with both listed separately.
- A tenant is bound by the tenancy agreement whilst a permitted occupier is someone who has permission to live in the property but is not bound by the tenancy agreement and doesn’t contribute to the rent. The tenants have responsibility for the occupiers in terms of sticking to the tenancy agreement and if the tenants leave then their permitted occupiers must leave as well. Normally all children will be permitted occupiers whilst all adults will be tenants. The occupants may want an elderly relative to not be a tenant. Always get legal advice if there is a concern in this area.
Together with the names of each occupier the following should also be included in the agreement for each tenant:
- A telephone number
- An e-mail address
- Their current address
- A post tenancy address where they can be contacted. This could be a relative’s address.
- From the beginning of 2020, tenancies are typically granted for initial fixed term periods of 6 or 12 months. The start and end dates should be clearly shown in the tenancy agreement.
- At the end of each period if no action is taken by either side the tenancy continues on what’s called a “statutory periodic” basis. This means that the agreement continues as-is from period to period with each period relating to the interval at which the rent is paid. If paid monthly, the period is one month; if weekly, the period is one week.
At the end of a fixed term the following options can happen:
- The tenant can move out and the tenancy will end.
- The tenancy will continue as-is on as “statutory periodic” basis.
- The tenant and landlord can sign a new agreement for the same or different fixed period.
You should take note of the following concerning the length of a tenancy term:
- A long-term fixed tenancy is good for the landlord as the tenant can’t leave during that period which reduces the trouble and cost of the tenant moving out too often.
- Although with a long-term tenancy you can’t end it early and retake possession except in very specific circumstances.
- The length of a fixed doesn’t have to dictate how long a tenant will stay in a property – it can just continue on a periodic basis or if both sides are happy, it can just be renewed.
- The length of the term should be negotiated with the tenant and the addition of a break clause should also be discussed. This is a point in the term where either the tenant of the landlord can end the tenancy early. The date must be equally binding on both sides with identical periods of notice.
- Letting agents are usually keen on keeping terms short as they can charge a fee each time for renewal. A landlord will usually be in favour of a longer term for peace of mind and security although there maybe the disadvantage of dealing with a tenant who is less then reliable.
Regarding rent and its payment, the tenancy agreement should state:
- The amount of rent and if it should be paid monthly of weekly. (There can be other periods)
- That the rent should be paid in advance of each period rather than after it.
- That joint tenants are jointly liable for the rent. If one stops paying, then the other(s) must make up the difference. All can be pursued for the arrears never mind who is at fault.
- The type of payment method that should be used (cash, standing order, debit card etc.)
- If the rent will increase during the term and the period after which it may be reviewed.
- The legal minimum amount of notice required to end a tenancy is 2 months for the landlord and one month for the tenant. As these periods are set in law they apply even if they are not mentioned in the agreement. But they should still be included to remind everyone of the details.
- A tenancy agreement should include a privacy statement to comply with the General Data Protection Regulations (GDPR). The statement should detail what personal data about tenants that is being held, why, and how it maybe shared. Tenants are allowed to request a copy of the information held about the tenant. The data can also be requested by the tenant to be destroyed at the end of the tenancy; Landlord should also be registered with the Information Commissioner’s Office if data is stored about tenants on an electronic device. This can be done at www.ico.org.uk for a fee of £35 per year.
Optional Clauses
- There can be a clause inserted that penalises late rent payment. This shouldn’t be punitive, but a reasonable amount of interest can be charged as long as it is stated in the tenancy agreement.
- There are two ways that a tenancy can be ended: the “no fault” Section 21 route and the Section 8 route giving reasons why the tenant should vacate the property.
- Most of the reasons allowed under Section 8 relate to the tenant’s behaviour. Other grounds are more about the landlord’s own situation, but these should only be used if the tenancy agreement includes notice that they might be used later.
- The most common reason is Ground 1 being that the landlord requires the property as his/her principal home at the end of the fixed term and is certainly worth including in an agreement if there is a chance of living there after the tenancy.
- If documents are to be sent to the tenant by e-mail, then this clause will need to be included in the agreement. Remember that any notice to end the tenancy will still have to be served by post.
- If a pet is to be allowed in the property, then a clause should be included stating the type of pet, name and breed. Make sure there is a statement precluding the keeping of any other pets.
- A clause can be inserted saying that any pests that are brought about by the tenant’s lifestyle are their responsibility. Obviously if structural defects etc have brought about the problem then that is the landlord’s problem to deal with.
- If there is a garden included in the property, then a clause should be included stating whose responsibility it is for the upkeep. It’s best if this responsibility is passed to the tenant. Costs can be deducted if they fail to keep on top of the maintenance. The standard for the garden to be kept to should be clearly specified and photographs can be included to show the condition it should be kept in.
- Whilst not compulsory it might be worth specifying that tenants have their own contents insurance to avoid any disputes and to cover them for any emergencies that could result in them having to move out into temporary accommodation.
- It’s worth including a clause allowing the rent to be reviewed annually and increased by a minimum percentage as specified. It doesn’t need to be enforced every year but needs to be there to allow a landlord to increase the rent as required.
- If a landlord wants future tenants to view the property whilst there are sitting tenant’s then a clause should be inserted stating how much notice can be expected to be given and what sort of times these viewing can be expected to take place.
- A clause should be inserted stating all bills are the tenant’s responsibility and cannot be transferred to the landlord after the tenant moves out.
- A clause can be inserted that allows landlords to contact and provide information to third parties. For example, if bills are left unpaid the landlord may want to provide a forwarding address to the company chasing the outstanding bill. This is important when dealing with tenants on housing benefits as correspondence will need to be made with the council.
