Tenancy agreements

Contents
1. Tenancy agreements 1.1. Main clauses 1.1.1. Implied terms 2. How to set up a tenancy 2.1. Types of tenancy agreement 3. Taking on a lodger 4. Obligations of a landlord 5. Deposits 6. Health and safety 7. Gas safety 8. Fire safety 9. Electrical safety 10. Rent

In this section, the advice applies equally to England and Wales and Northern Ireland, unless otherwise specified.

A tenancy agreement is a contract between one or more parties ('tenants') who pay a sum to occupy property belonging to another (the ‘landlord’). A tenancy agreement may be written or oral, but it is in the interests of both parties to enter into a written agreement so that if a dispute arises, the terms and conditions of the agreement are clear. A tenancy agreement gives certain rights to both you and your tenant, for example, your right to receive rent for letting the property and your tenant’s right to occupy the property. You and your tenant will have made specific arrangements about the tenancy, such as its duration and these will be part of the tenancy agreement as long as they do not conflict with law.

A written tenancy agreement should state what kind of tenancy it is. Landlords must always give tenants their name and address, regardless whether the tenancy is written or not. A tenancy agreement may include any terms that are agreed by both the tenant and landlord so long as they do not conflict with the law. The most important terms to include in a tenancy agreement are:

• Your full name and address
• The full name of the tenant(s)
• The address of the property you are renting
• The amount of rent to be paid, when it is due, how it should be paid and what it covers (for example does it include any bills?)
• The length of the agreement
• The amount of the deposit
• Whether the tenant has permission to leave before the end of the tenancy, and if so, the notice he or she has to give
• A schedule of contents
• Any other agreed rules, for example, about pets, guests or smoking

There are some terms which will apply to any tenancy agreement automatically. These are known as ‘implied terms’.

Some of the most common implied terms are:

• Landlords must carry out basic repairs
• Landlords must keep the installations for the supply of water, gas, electricity, sanitation, space heating and heating water in good working order
• Tenants have the right to live peacefully in the accommodation without nuisance from the landlord
• Landlords must not treat tenants unfairly because of their race, sex, sexuality, disability or religion. There may be some exceptions, for example, if the tenant lives in the same accommodation as the landlord
• Tenants have an obligation to take proper care of the accommodation

Before any tenancy is set up there will be many organisational steps that you need to take. First and foremost you need to find a suitable tenant and should conduct proper checks including at least two references. The references can be obtained from a previous landlord, a previous secured lender, an employer, a bank or a building society.

In addition, you should select a tenancy agreement (see ‘Types of tenancy agreement’ below).

For further information on how to set up a tenancy see: How to set up a tenancy

In England and Wales, there are three main types of tenancy agreement:

• Assured shorthold tenancies
• Assured tenancies
• Regulated tenancies

In Northern Ireland, there are only residential tenancy agreements. However, in certain circumstances, the rent payable under this tenancy can become a controlled tenancy. It should be noted that these notes only apply to tenancies created since the 1st of April 2007.

The type of tenancy that may best suit your needs depends on your individual circumstances. To read more about the different types of tenancy agreement see: What type of tenancy do I have?

When you take on a lodger you are strongly advised to get a legal agreement in place to protect your rights. If you are letting (or thinking of letting) part of your home it is important to understand your obligations. Lodgers are not seen as tenants in the eyes of the law. To find out more about taking on lodgers see: Taking on a lodger

The law protects tenants and it is vital that landlords are aware of their legal obligations to tenants. In particular, there are special laws and procedures that protect rental deposits (in England and Wales only) and govern health and safety.

In addition, when a tenant fails to pay rent on time or at all, certain steps and procedures should be followed. Landlords should not take the law into their own hands, irrespective of the circumstances; otherwise they may risk a fine or criminal conviction.

In England and Wales, landlords are obliged to place any deposit they receive for an assured shorthold tenancy up to the value of £25,000 per annum in a Government-authorised tenancy deposit scheme. There are two types of scheme: custodial and insurance-based schemes. For more information on a landlord's obligation in relation to deposits see: Deposits

In Northern Ireland, there is no requirement to place deposits in a deposit-scheme.

Landlords are generally responsible for the maintenance of and major repairs to a property. This includes repairs to the structure and exterior of the property.

A property must be 'fit for habitation', so a landlord is obliged to make sure that water, electricity, gas supplies and sanitation (for example, drains, basins, sinks, baths and WCs) are in working order and that the property is free from any damp that could damage the health of the occupier. There are also further structural obligations upon a landlord.

If the property you let out does not satisfy these criteria and there is a health risk to your tenant, then he or she may be able to take legal action against you.

Gas appliances and installations that are supplied with your property should be maintained in good order and should receive an annual safety check by a professional registered with GasSafe. A copy of each safety certificate should be issued to the occupier within 28 days of each annual check.

For further information on gas safety see: Gas safety

If you supply furniture or furnishings with the property, you must ensure that they meet the fire resistance requirements sometimes known as the ‘match test’ in the Furniture and Furnishings (Fire) (Safety) Regulations 1988.

Fire safety for any home is important, but if a property has multiple occupants, there are further precautions that should be taken since the risk of fire is greater. For example, considerations will need to be made in relation to the use of fire extinguishers, fire blankets, multiple fire alarms and multiple escape routes.

For more information on a landlord's obligation to take fire precautions see: Fire safety

Electric appliances and installations that are supplied should be maintained in a good order and should be safe. There is no legal requirement on a landlord to obtain a safety certificate. For further information on electrical safety see: Electrical safety

If the tenant falls into rent arrears and has not paid, you must act immediately, otherwise the situation will get out of control. The tenant must know that they cannot get away with it. In most cases, initial non-legal action will be sufficient. You should make contact with the tenant by sending a letter demanding that the rent be paid. Most tenants will respond when reminded and remedy the situation.

In the residential leases section, the advice applies equally to England and Wales and Northern Ireland unless otherwise specified.