Using the wrong type of tenancy agreement
The most well-known agreement is an assured shorthold tenancy (AST), which is signed by a tenant who intends to reside in the property as their main or only home. There are types of tenancies that an AST is unsuitable and should not be used. If you have a lodger, you should draw up a lodger agreement. you need a property-let agreement is you let your property to a company.
Entering into a rent-to-rent scheme without a legal contract
Rent-to-rent schemes can make a landlord`s life far easier. For example, they can go travelling and hand over the responsibility of their property to someone else. Many local authorities offer to lease properties from private landlords. This is done in an effort to solve housing shortages. And there are certain circumstances where these schemes are attractive for a landlord. At the end of the three or five year period, the landlord receives the property back in the same condition. Also, the rent-to-rent company tends to be responsible for any maintenance work. And finally, the landlord doesn’t need to pay for any void periods.
However, there are companies renting rooms individually to maximise the income from a property without disclosing their full intentions to the landlord. So it’s crucial with rent-to-rent schemes to thoroughly research the company or individual, do your due diligence, be mindful of all the pitfalls, and have a legal contract drawn up by your solicitor. It’s also worth bearing in mind that you can only regain possession of the property if there is a breach of contract.
Name all individuals on the tenancy agreement that lives in the property
Include all adults in the tenancy agreement. So, if a couple and their children over the age of 18 live in your property, ensure they are all named in the agreement. You must reference each of them. You must be very careful when subletting. If a tenant in a privately rented property sublets, they have breached their tenancy agreement. Breaching the agreement is a condition for seeking possession in court. Preventing this comes back to due diligence. If only one person wants to rent a two-bedroom flat, or a couple wants to rent a three-bedroom house, do find out their reasons for needing more space.
Not complying with regulations at the beginning of a tenancy
You must comply with certain rules at the beginning of a tenancy. Otherwise, there will be problems if you try to seek possession of the property:
- The landlord must protect the deposit within 30 days from its payment.
- The landlord must supply information about the deposit scheme.
- Also, the landlord must give tenants a copy of the EPC, the current gas certificate, and the ‘How to rent’ booklet.
- The final issue to bear in mind is licensing. If your property needs an HMO licence, you must have this before you are able to regain possession of the property.
Contravening rules set by the Competition and Markets Authority is one of the common issues with tenancy agreements
Letting agents quite often devise their own tenancy agreements. And some add in clauses and certain conditions, believing that they are favourable to landlords. However, some contravene the Competition and Markets Authority rules. One example is a clause stating that the landlord will give two months’ notice if they require possession of the property at the end of the fixed term. A similar one is that the tenant will give two months’ notice if they want to end the tenancy. However, the law says that the tenant only has to give one month’s (rental period) of notice. It is not a fair term under the Competition and Markets Authority rules and can’t be enforced.
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