The Tenancy Agreement: Five Important Issues
1. Tenancy Length
What length of tenancy are you looking for? Be wary of signing up for too long, because if you decide to leave early, you'll be liable to pay rent for the rest of the time you agreed. However, most landlords will take a favourable view if you can find an acceptable replacement tenant for them.
2. Deposit
It's usual for a landlord to require a prospective tenant to pay a deposit as well as a month's rent in advance. Normally the deposit will be equivalent to one or two months rent. You should not agree to pay more than the equivalent of two months rent as a deposit - this would almost certainly be unfair. The idea behind a deposit is that if you fail to pay the rent, or cause any damage to the house or contents, a landlord can use this money as compensation without the need for expensive court proceedings.
Many tenancy disputes arise out of the repayment of deposits at the end of the tenancy. Landlords sometimes claim that there is damage, which is then disputed by the tenant. Equally, there may be a disagreement as to the amount that should be deducted as compensation for the damage caused. The landlord has the advantage - as the tenant you have already handed over your money and it is unlikely to be returned unless you go to court.
The tenancy agreement should make clear the following:
- That the deposit is held on trust for the tenant. Otherwise there is a risk that the money will not be recoverable by the tenant if the landlord should become insolvent.
- What the landlord (or the letting agency) can use the deposit for - either just for arrears of rent, or for breakages as well.
- Whether the landlord can require you to top up the deposit to the original amount if they make use of the deposit during the tenancy for the agreed purposes.
- Whether the tenant is entitled to receive interest on the deposit for the time it is held by the landlord.
The government has introduced a Tenancy Deposit Scheme, which aims to provide security for tenants' deposits and independent resolution of disputes. From April 2007, all deposits (for rent up to £25,000 per annum) taken by landlords for Assured and assured shorthold tenancies must be protected by this scheme. More details are available on the Communities and Local Government web site http://www.communities.gov.uk/housing/.
3. Right of Entry
Landlords frequently keep keys to the properties they elect, but the law does not allow them right of entry unless this is specifically stated in the agreement. A landlord may arrange to come round to see what repairs need doing, but otherwise, they have no more right to enter the property that a stranger has. The whole essence of the tenancy is that the tenant has a right to exclude anyone and everyone from the property - including the landlord.
4. Rules and Regulations
It is usual for a landlord to include in a tenancy agreement various rules and regulations that state what you can or cannot do in the property. These will often aim to avoid causing a nuisance to neighbours. Whatever it is you agreed to, your signature on the tenancy agreement holds you to it. If you do not comply with these provisions, a landlord may well be able to bring the tenancy to a premature end. However, what a landlord cannot do is impose new rules after you sign the agreement - unless, that is, the agreement allows it.
5. Inventory
If the property is being let furnished, ensure that there is a detailed inventory of the contents. It should not only include everything in the house, but also describe its condition, detailing any damage. Go through it carefully and don't sign it unless you are sure it is accurate. This can save all sorts of arguments at the end of the tenancy when it comes to the repayment of the deposit. The landlord will often make a deduction because of a damaged item, despite the tenant's claim that it was in that condition to start with.
