Tenancy Agreements Are The Tenants\’ Best Friend
By Karl Hopkins
When letting a house much is taken on trust. Whatever checks the landlord makes, it remains the case that he or she is entrusting tenants who are barely known to him or her with a valuable investment. If there are problems with the rent or with the tenants” behaviour, it can take a while to go through all the necessary legal steps to put things right.
The law says the landlord must allow the tenants quiet enjoyment of their rented home – meaning he or she cannot go bursting into the premises whenever the fancy takes. Although regular inspection checks can be arranged, in general tenants must be left alone to live their lives.
For their part tenants agree to pay the rent in return for a property that is of adequate standard, not damp or unhealthy in some other way, and not dangerous. Should anything go wrong, they rely on the landlord to put things right.
In short the relationship between landlord and tenant is one of trust.
Things can, and sometimes do go wrong. But in most cases disputes arise from misunderstandings rather than wilful dishonesty or unthinking carelessness. And this is where the tenancy agreement comes in. It sets out the duties and responsibilities of each party, so that each knows precisely where they stand.
Since introduction of the 1988 Housing Act most tenancy agreements will be what are known as assured shorthold tenancy agreements. These are most commonly for six months – the minimum period, after which tenants can be required to leave if the landlord simply decides he or she wants the property back.
When the first six month term expires, the landlord can grant the tenants a further fixed term tenancy agreement (say another six months), or simply allow them to stay on under the same terms and without any additional paperwork. In such circumstances the tenancy becomes a ”periodic tenancy”. Tenants can quit periodic tenancies by giving the landlord one month”s notice, while the landlord can require them to leave if he or she gives them two months” written notice.
Tenancy agreements set out landlord and tenant rights and obligations. But they cannot take away minimum legal duties and obligations set out in various Housing Acts, and embedded in common law. So, for example, tenants have the right to ”quiet enjoyment” of their rented homes, while landlords cannot shed their responsibility to provide a safe environment, and must give tenants the minimum notice periods spelled out in the law – usually, but not always, two months.
Neither must tenancy agreements be ”unfair” (under the Unfair Terms in Consumer Contracts Regulations). According to the Office of Fair Trading”s Guidance on unfair terms in tenancy agreements, ”any term may be unfair if it gives the landlord, or the agent, excessive power to decide whether the tenant should be penalised or obliged to make reparation, or deprived of any benefits under the tenancy agreement”.
Unless stated otherwise, private sector tenancy agreements drawn up since February 1997 are automatically shorthold assured tenancy agreements unless they state otherwise. There are exceptions to the rule – holiday lets, where no rent is paid or the rent is very low, or is more than 25,000GBP, where the tenant is a company, or where the accommodation is shared with a resident landlord. For these exceptions, different types of agreement are needed – ”common law” tenancy agreements which stand on their own merits outside the restrictions and protections of the Housing Acts.
For holiday lets, all that is needed is a simple agreement stating among other things that the rental is for a defined period and is for holiday accommodation only.
Lodging agreements for rental of rooms in houses shared with landlords can amount to tenancies (in general terms if the tenant has exclusive use of a room) or a licence to lodge. Either way ”lodgers” have fewer rights and less secure tenure than tenants who are party to assured or assured shorthold tenancy agreements.
For low or high rents, and for company lets, a full tenancy agreement is needed setting out rights, duties and tenure in some details. As rights and duties are not covered by statute, common law tenants have, in general, less secure tenure than tenants with an assured or assured shorthold tenancy.
However, this also means more needs to be spelt out in the agreement – such as what notice is required, who may live in the house, rights of (or restrictions on) assignment, and what happens if the lease expires but no notice is given (if nothing is said about the lease being renewed monthly it is likely to be deemed to have been renewed for the length of the original lease).
Statutory deposit protection applies to assured shorthold tenancies only, so landlords of properties with common law tenancies need not cover the deposit in a Government approved scheme. However, neither does the important ”section 21” possession procedure apply (gaining possession by simply giving notice).
In England and Wales, unless the tenancy agreement is to be for a fixed period of over three years, the tenancy agreement can be verbal (although this is not advised).
Tenancy agreements may be between the landlord and one tenant or the landlord and a number of tenants – for example a couple living together as partners. From the landlord”s standpoint, two or more signatories to the tenancy agreement are better than one since this will make each tenant ”jointly and severally” liable for the full rent – meaning that if one does not or cannot pay, the other tenant is responsible in law for the entire amount.
Houses can also be divided into multiple tenancies where each tenant has exclusive use of a particular part of the property (say a bedroom) as set out in the tenancy agreement, with use of the common areas in the property. It makes sense to have multiple rather than joint tenancies where the tenants are not related and may intend to live in the property for different periods.
Tenancy agreements are important documents, enforceable in law, and both landlords and tenants should take great care before signing such agreements. They should not be taken lightly, but should not be feared – they are, after all, a tenant”s best friend.
About The Author
http://www.tenancy-agreements.net is a website that offers up to date and reliable tenancy agreements that are available for immediate download.