In my last article, I discussed my top tips on tenancy agreements to help avoid problems and unlock the advantages of property management. This article expands on those tips, and will help to ensure that your tenancy terms and conditions include all the essential details to make it watertight. I’ll start with the simple items that need little explanation, and work through to the conditions that need extra thought and might form the basis of property management inspections.
1. The names of all people party to the tenancy agreement
Remember to include the names of anyone aged 18 or older that will be permanently resident at the property.
2. The property address
3. The start date and end date
4. The amount of rent and form of payment
This should include not only the agreed rental price but also stipulate how it is expected to be paid (for example, by direct credit) and the date on which the rent falls due (most commonly the same date on a monthly basis).
5. Details about rental reviews
You’ll want this included, and in the tenancy agreement terms and conditions, you should state how the rent will be reviewed and when it will be reviewed. Some landlords think that putting an automatic increase in place is a good idea, but I’d advise against this: you could be limiting rental potential in a strong market, and in a stable market you might lose the tenant to a more competitive rental price.
6. Deposit details – part one
How much will the deposit be, and how will it be protected (this is a legal obligation that we’ll discuss in more detail in an upcoming article Everything a landlord wants to know about tenancy deposit protection but is afraid to ask).
7. Deposit details – part two
You’ll also want to put into writing the circumstances under which the deposit can be withheld (either in part or in full). For example, this might be to cover damage caused by the tenant, or cleaning costs, loss of property on the property inventory, and so on.
8. Tenant obligations
This is where things begin to get a little more complex. For example, you might want to include a ‘no-smoking indoors’ rule in the tenancy agreement terms and conditions; or limit the number of people allowed to live in the property; or include a clause that prohibits pets. In a nutshell, these are the conditions that detail how the tenant should treat his or her home (your investment).
This isn’t quite as straightforward as it might appear: you can’t include conditions that would break the law (so, as an example, you can’t enforce a condition that provides the tenant with less notice to leave than is provided for in law).
9. Landlord obligations
These conditions detail how you act under the terms of the tenancy. You might include how communication is made; what happens in the event of required repairs; inspections details; and so on.
10. What bills the tenant has to pay
Apart from the rent, there will be other household bills. You are likely to want your tenant to pay utility bills and council tax, for example. Detail all costs that will be down to the tenant, and don’t miss anything out.
The little extras in tenancy agreement terms and conditions
While the above ten items are essentials in a rock solid tenancy agreement, there may be other conditions that you’d find useful. Examples of these include:
- Tenancy break clauses
- Responsibility for minor repairs
- Conditions on lodgers
Make sure you rental contract does what it should, and what you want it to. If you want an idea of how detailed the tenancy agreement terms and conditions need to be, you could download the government’s model tenancy agreement. If you want to discuss writing a bespoke tenancy agreement that is personal to you, feel free to contact us today on +44 1522 503 717.
Yours in Effortless property Management,