Creating a Tenancy Agreement
The first thing that you need to do when you’re creating a tenancy agreement is use a standard form. These are easy to find from stationers and can often be downloaded online too. It’s important to make sure that you use the right type of tenancy agreement – especially if you will be living in separate accommodation in the same property or letting out more than one room in a shared property (to students for example.)
You also need to make sure that the forms are up to date, as the wording on tenancy agreement forms that were printed before 2007 is unlikely to comply with the tenancy deposit scheme. A form that dates back as far as before 2002 might not comply with the Office of Fair Trading guidance on the Unfair Terms in Consumer Contracts 1999.
How Long to Set The Tenancy Agreement ForIt’s not a good idea to set the initial tenancy for any longer than six months, unless you know and trust the people who are going to be moving in. The reason is quite obvious – if they turn out to be nightmare tenants, you don’t want to be stuck with them!
It is normal for a tenancy period to term be six months or sometimes a year, but there are no legal rules on length of tenancy – it can be any amount of time that’s agreed by you and your tenant. In a normal assured shorthold tenancy the tenancy carries on after the initial six months (or whatever period you agree) on a monthly basis if rent is paid monthly.
Don’t amend a standard tenancy agreement without talking to a professional. If you amend a clause, in some cases it could make the entire tenancy agreement invalid because it makes the agreement non-compliant with the law.
What Other Information Should I Include in a Tenancy Agreement?You must make sure that the agreement contains and address for you in England or Wales, to ensure that the tenancy agreement complies with the Landlord and Tenant Act 1987. If you will be living abroad, you can insert the address of your agent in England or Wales instead.
You also need to state very clearly which payments the tenant is responsible for and which will be covered by you as part of the rent. If you’ve agreed to pay bills such as water, council tax gas and electricity, you should also insert a clause in the agreement that allows you to increase the rent if and when the cost of the utilities or council tax increases.
It’s best to also include an inventory of all the property contents and the condition they are in at the beginning of the tenancy agreement. Agree this with the tenant when they move in so that there are no disputes at a later date.If you have asked the tenant for a guarantor, you need to have the correct documentation signed and agreed before the tenant moves in, and ideally even before the tenancy agreement is signed.
You need to do this even if the house is unfurnished, to cover things like damage to carpets, decor, and light fittings.
It sounds obvious but you also need to make sure that the tenancy agreement is properly signed by the tenants, and that you have a copy of it with their original signatures on before you give them the keys to your property.