A tenancy agreement is an important legal contract between a landlord and his/her tenant(s). If you’re planning to rent your residential property, it’d help to know the fundamentals of these agreements and how you can write an effective one. It’s important to understand that in the absence of a tenancy agreement, you and your tenants won’t have any record of the agreement that you can refer back to in case of a dispute or disagreement.
When it comes to creating a tenancy agreement, either you can write one on your own or use a template from a reliable source. However, if you’re taking the former route or adding personal clauses to a template, it’s strongly advisable to seek legal advice to avoid future troubles.
How to write a tenancy agreement?
A fair tenancy agreement should be in plain English and include almost all eventualities. Here are the sections that you must clearly express in your tenancy agreement.
- Details of the parties involved: These include the names and contact details of the landlord (you) and the tenant(s).
- Details of the tenancy: These include the start date, duration of the tenancy, and its end date.
- Early ending of the tenancy: This section mentions whether it’s possible to end the tenancy early and the procedures to do so along with the applicable notice periods and associated costs if any.
- Details of the deposit: It refers to the deposit made by the tenant and will be retained by you. Express this clearly in both words and figures to maintain clarity.
- Rental deposit protection details: Once you’ve received the deposit from your tenant(s), you must protect the money according to the legislation and let the tenant(s) know of it. This section may also include the circumstances when deductions from the deposit might be made along with reasons for which it can be partly or fully withheld.
- Rental amount and payment dates: The amount you’ll be receiving as rent, how frequently it’ll be paid, and payment dates. It can also include circumstances when you may increase the rent.
- Method of rent payment: This is the method your tenant(s) will use to pay you the rent.
In addition to these, a tenancy agreement needs to include things such as the rights and responsibilities that need to be adhered to by both the landlord and the tenant(s). You may also want to include aspects such as pet clauses, smoking clauses, rules on subletting, and others that you may consider important. However, it’s important to understand that additional considerations that you include in the tenancy agreement have to be signed by the tenant(s) and need to be legal and reasonable.
Tenancy agreements and section 21 notice
Tenancy agreements can be of different forms among which the most common one is AST or Assured Shorthold Tenancy. If you want the tenant(s) to vacate your rental property at the end of the fixed term of the tenancy, you can use a section 21 notice (Notice of Possession). It’s important to understand that you won’t be able to serve this notice if you haven’t provided your tenant(s) with the following documents.
- An AST
- A copy of your property’s EPC (Energy Performance Certificate)
- A current CP12 (Gas Safety Certificate)
- A copy of the official “How to rent” guide
You should also note that though you can serve a Section 21 notice whenever you want to after the beginning of the tenancy, it cannot end before the fixed term’s end.
How to change a tenancy agreement?
There could be varied reasons to change a tenancy agreement. It can be done only when both the landlord and the tenant(s) agree to the same. You can either make written changes to your existing agreement or sign a new one.
How to end a tenancy agreement?
While there can be different reasons to end a tenancy agreement, the most common ones include:
- The fixed term ends
- Both parties agree
You can also end the contract before the completion of the fixed term if there’s a breach of the tenancy agreement by the tenant(s). In that case, you’ve to serve a Notice to Quit (a Section 8 notice) to regain possession of your rental property.
Put simply, a tenancy agreement acts as a solid reference manual for both the landlord and the tenant(s). So, it’s extremely crucial to keep the above-mentioned things in mind when creating such an agreement to avoid future risks and confusion.