Tenancy Agreements and how to get them right

This is the 9th post in my 2017 Legal Update series.

All tenancies should have a tenancy agreement. It is legally possible to create a tenancy without one but you would be foolish to do so.

For example, I was contacted a while ago by a landlord who had allowed his tenant into the property without signing a tenancy agreement first.

“I got in touch with my tenant when he failed to pay the rent” he told me “only for the tenant to say that he was exercising his right to pay rent in arrears. Can he do that?”

My answer was, I am afraid “Yes, he can”. Under the common law, rent is payable in arrears. Tenants are only obliged to pay rent in advance if their tenancy agreement says so.

This is just one of the many ways in which landlords can protect their position by using a properly drafted tenancy agreement.

Unfair terms

One of the things covered by the consumer law I discussed in an earlier post (Consumer Law and why you should be worried about it) is the legislation prohibiting unfair terms in consumer agreements. These ‘unfair terms’ rules are now part of the Consumer Rights Act 2015 but have been with us for a long time.

They are the main reason why it is unwise for landlords to hack into their professionally drafted tenancy agreements and change them without legal advice.

For example, a clause will normally be unfair if it takes away a right a tenant would normally have in law. But how can you know whether you are doing this unless you have an encyclopaedic knowledge of what tenants’ rights are in the first place?

Then there are prohibitions. If you want to prohibit something a tenant would normally be able to do, such as re-decorate the property or keep a pet, your clause must contain wording providing for the tenant to request permission to do whatever-it-is and say that the permission will not be unreasonably refused.

Countless landlords have invalidated their pets clauses by removing this wording on the basis that “we will never allow pets in our properties”.

Maybe you won’t allow cats and dogs (and this will usually be reasonable) but what about a stick insect in a jar? Or (as per the leading case for this) a goldfish in a bowl?

The fact that tenants can request permission for something does not mean that you have GOT to grant it. Often it will be totally reasonable to refuse your permission (and you should do so). But if you deny tenants the chance to request permission – this will invalidate the clause, meaning that there is nothing to stop them keeping whatever pets they like.  Or doing whatever else the clause is prohibiting.

Protecting your position

Tenancy agreements need to be fair and ideally written in plain English, but this does not mean that they cannot include clauses to protect the landlord’s position. For example:

Data Protection – you should include clauses notifying tenants that you will provide their details to utilities if they default on payment and to your own tracing agents if they leave owing you money

Right to rent – make sure that everyone living in the property (not just the tenants) are named in the tenancy agreement and include a clause saying that no-one else is allowed to live there.

Contractual periodic tenancies – a recent case (Leeds City Council v Broadley) has held that although tenants are not liable for Council tax where a tenancy is a statutory periodic, a contractual periodic tenancy counts as part of the original tenancy and so satisfies the requirement that a tenant has a ‘material interest’ of 6 months or more’ in the property. Meaning that the tenants will be held liable by the Council. Not you. (NB All Landlord Law tenancy agreements provide for contractual periodic tenancies for this reason).

Further information:

You will find a lot of guidance in the ‘Tenancy Agreements 33 Days of tips’ series on my Landlord Law Blog.

Turning to our Conference Course, I do a talk on Tenancy Agreement Clauses, plus the Consumer Law talk has a lot of useful information about unfair terms (which come under the consumer legislation).

You will find more information about the Conference Course here.  There is a discount voucher for Property118 readers which is pp118cc30 – apply this on the checkout page and it will reduce the payment by 30%.  Note however that the coupon will expire after 16th September.

If you are looking for a tenancy agreement for your property, Landlord Law has a huge selection of templates plus you can always ask me (if you are a member) to help you draft any special clauses you may need or ask me any questions you may have about the correct tenancy agreement to use for your situation.

Our special tenancy agreements include HMO type agreements for a room in a shared house and agreements where the landlord pays the bills.  If you are a student landlord we also have special student tenancy agreements designed to protect landlords – for example if you agree to rent the room over the summer at a lower rent.

There are also special forms you can use if you want to permit one of your tenants keep a pet, which incorporates special pet related clauses to help you, and we have similar forms (but with different clauses!) if you agree to allow your tenant to run a home business or rent a room to a lodger, along with our guarantee and renewal forms.

Note that Landlord Law members get unlimited use of all our tenancy agreements (plus also the letters, notices and other documents which you can create via our ‘document generator system’).

You can find out more about Landlord Law here

Next time I will be writing about fire safety.

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

To see all the articles in my series please Click Here

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