Is your tenancy agreement up to scratch?
The Assured Shorthold Tenancy Agreement encapsulates all that is legally binding between you as a landlord and your tenant(s). It’s the most important document that you sign in respect of that relationship. And like many detailed legal documents, there is a high probability that you skim read it, if you read it all, before you signed it.
It’s human nature for most people to trust the subject matter expert that is handing it to them to sign or to be put off by the legalese and assume they won’t understand it even if they do take the time to read it.
It is critical that landlords are confident their agent has provided an accurate, complete and up-to-date Shorthold Tenancy Agreement to protect your legal rights as a property owner and therefore your investment.
Here are some examples of what can happen, connected to that little piece of paper:
Not only is the document important in itself, the way in which it is provided to tenants is also key to the actions that can subsequently be taken. As an example, a Section 21 notice to quit cannot be served if the tenant was not provided with a current copy of the Government’s guide ‘How to Rent – the checklist for renting in England’ at the start of their tenancy. This would be galling if you needed to try to evict a tenant and found that an agent not taking this simple action prevented you from serving notice to quit.
Failure to provide supporting documents or include adequate clauses to the Tenancy Agreement may severely impede a Landlord’s ability to gain possession of their property when required. In specific circumstances, it could even lead to the Landlord having to repay 3 times the original deposit to tenants.
Handling a client’s deposit money in the right manner is also tied in to the tenancy agreement and is highly legislated (as one would expect) to protect tenants. All professional agents now keep a clients deposit in a separate account
Compliance requirements have been increasingly onerous and the fines that landlords face are punitive. There is the potential for fines up to £30,000 or even imprisonment for failure to comply. It is essential, therefore, that every private residential landlord has a professional agent that they trust, who supports them and understands the serious nature of a landlord’s responsibilities. Agents must be members of a professional body that ensures they comply with a code of conduct, stay up to date with industry training, and keep abreast of changes in legislation to ensure they can minimise the risk of their landlords falling foul of the law. In our article on ‘The right training and partnerships lead to success’, we documented that Capital is a member of the industry body Propertymark and what that means in terms of training, standards and landlord protection.
The agreement must be the latest version of the shorthold tenancy agreement to ensure it covers all the most up-to-date legislation. And with the pandemic there have been regular changes to things like notice periods, which might be crucial to you in the event of a problem with your tenants. Any clause that is not in agreement with the statutory rights granted to tenants under UK tenancy law is unenforceable in court and could even render the whole document unbinding as a legal document.
It’s far too risky for a landlord to attempt to write up a legally binding tenancy agreement without legal help. That’s why it is just as important to ensure that if you do assign the service to a letting agent, you trust them to be creating a landlord/tenant agreement that is embodied in a complete, accurate and up-to-date document that would stand up in court.
If you would like to speak to Capital Estate Agents to find out more about our lettings service for landlords please call 0208 313 0010 or email us on info@capitalestateagents.com