Here is a list of 10 of the most common problems that arise with tenancy agreements:
1. Not having one.
This is NOT a good idea. For example if you have taken a deposit you have nothing to authorise making any deductions (so you will lose if you go to adjudication) and rent is always payable in arrears if there is no tenancy agreement term to say it is payable in advance.
2. Having the wrong type of agreement.
For example you will need a different type of agreement if your tenancy is not an AST or if you are renting a room in a shared house. Click here for my free guide.
3. Not having a signed contract
This makes everything more difficult. Your tenants MAY be bound by the terms of the draft tenancy you gave them but it is not certain. And if they are allowed into the property before they sign, they can turn round and refuse to sign anything.
NEVER let tenants in without getting the tenancy agreement signed first.
4. Not having a proper inventory
This is essential. If you cannot prove the condition of the property at the start, how are you going to be able to show that any damage is down to the tenants?
For example at adjudication, if deductions from the deposit are disputed.
Note that the inventory must either be signed by the tenants as agreed or (if they do not sign) it should be prepared by someone independent. As an adjudicator may not accept your unsupported evidence at adjudication.
5. Not protecting the deposit within the 30 days period
Note that it is within 30 days of receipt of the money. So if the money is paid to you more than 30 days before the tenancy is signed you will need to protect it earlier. Or be in breach of the tenancy deposit regulations (which means you can’t serve a section 21 notice).
6. Not serving the prescribed information within the 30 day period
Again, this is essential. Service of the Prescribed Information is as important as protecting the deposit.
NB If you have failed to comply with 5 and 6, there is guidance on Landlord Law to help here.
7. Confusion with the dates.
It needs to be crystal clear on your agreement when the tenancy starts and when it ends. Ideally just have the one date, but it is acceptable to have a date when the tenancy is created (ie when it is signed) and a separate, later, date when it starts. For example if the agreement is signed in advance. But make sure it is clear which is which.
8. Leaving occupiers off the tenancy agreement
Everyone who is over 18 who is living at the property should be on the tenancy agreement (and referenced). Otherwise it can cause problems if the person who signed moves out leaving the person who didn’t sign in occupation. Adult children should sign if they are to live there, but maybe not if they are living in college and only come back to stay in holidays.
9. Allowing tenants to move in before guarantees are signed
You must always get the guarantor to sign their guarantee deed, and also confirm they agree to the tenancy agreement terms (ideally get them to initial a copy) and attach this to the guarantee deed.
10. Not having initial payments in cleared funds
You need to make sure that the first rental payment and the deposit have been paid into your bank account and cleared before you allow the tenants into occupation. Then if it all goes pear shaped you will at least have something.
In particular do not allow tenants to pay the deposit by installments because you feel sorry for them. This will involve you in horrendous additional administration and could put you in breach of the deposit rules (and unable to use section 21) if all instalments are not protected within 30 days of payment.
What are YOUR top tips for landlords?
NB You can find out more about my tenancy agreements service here.
just saying says
October 9, 2014 at 2:01 PMRe no. 10: “You need to make sure that the first rental payment and the deposit have been paid into your bank account and cleared before you allow the tenants into occupation. Then if it all goes pear shaped you will at least have something.”
This fails to acknowledge the scammers out there (landlords or otherwise) and consider any precautions that a tenant will want to make. You should expect any tenant to want keys on exchange for their funds. These are not insignificant amounts of money here and of course, trust goes both ways.
Landlords cd ask the prospective tenant(s) for a banker’s draft and exchange money for keys in person. That’s called: playing fair.
Tessa Shepperson says
October 9, 2014 at 2:27 PMThats a fair point. I have my ‘landlords advisors’ hat on in this post.
But I have known (when I did eviction work) many cases where landlords had let tenants in without getting the money up front, and the tenants then failed to pay anything. It does happen. I don’t know but I suspect it happens more than the tenants being scammed thing.
From a landlords point of view my advice is not to hand over the keys without cleared funds.
Romain says
October 9, 2014 at 2:47 PMI think it’s a bad idea for everyone to only hand money in exchange for the key. It brings up some kinds of movie scenes of tenants showing up with an envelope full of cash and of landlords taking out their money counters and UV lights to check it…
Both tenants and landlords should stay away from people wanting to do business that way.
In my view, first the tenancy agreement should be signed by all parties (which provides legal protection), then money should be paid and cleared, then keys handed on move in date.
If you think that the other party is not trustworthy enough to play like that then you should probably not become their tenant/landlord in the first place.
Tessa Shepperson says
October 9, 2014 at 3:13 PMBoth parties need to be comfortable with the transaction.
If tenants are worried, they can do a check on who owns the property via the Land Registry https://www.gov.uk/search-property-information-land-registry (which will cost £3) and then if the landlord is shown as someone different make inquiries.
They can also ask for ID from the landlord.
just saying says
October 9, 2014 at 6:34 PM“I don’t know but I suspect it happens more than the tenants being scammed thing.”
Tessa, can I politely suggest that if you don’t have any basis for such an assertion, that you don’t make it. Romain will note that I mentioned a banker’s draft precisely to avoid any need for envelopes of cash. I welcome not being patronised on what makes for a safe transaction, when someone can break a door down far easier than I can get £1000+ back. (even if you might like to suggest that you never would do such a thing).
Romain says
October 10, 2014 at 8:45 AMI don’t want to go off on a tangent for too long. Just one point:
A landlord accepting, on the day, a piece of paper that the tenant is claiming to be a banker’s draft is betting that it is genuine unless he has a strategy to check it on the spot.
If the premise is the absence of trust then obviously a landlord should not accept.