Buying a property with good rental yield potential is one of the most effective ways to generate passive income. But just like with any investment or business idea, renting out a property comes with its own risks. To safeguard yourself and your property, and to avoid any legal disputes with your renter, it’s recommended to go with a short leasehold tenancy agreement.
A private landlord tenancy agreement is a written document signed by the landlord and tenant. This document answers questions like “what responsibilities do landlords have?” and sheds light on renters’ obligations, such as paying tenancy fees, late fees, and fines.
Usually, a property owner draws up the agreement, and then the renter will check it before signing. Once the agreement has been signed, it becomes legally binding.
If you’re a new landlord looking for tenancy agreement advice, read this guide to the end. We’ll discuss all the important details that need to be included in a short leasehold tenancy agreement.
Details of Tenant and Landlord
The first item that needs to be included in your tenancy agreement is the personal information of both you (the landlord) and the renter. This includes your name and address. If you’ve agreed on a joint tenancy, then both tenant’s names should be included in the agreement.
If your property is being managed by a block property agent who should be contacted in case of an emergency, you should also include their details, including their company name and contact details. As a landlord, if you’ve used a letting agent to find a tenant, their information needs to be shared as well.
You can also mention details such as the provision of subletting or allowing guests or other members on your property.
Rent Payment and Bills
Information on rent payments and bills is one of the most important points to be included in your short leasehold tenancy agreement. Clearly state how much rent needs to be paid, and when(weekly, bimonthly, or monthly). You should also mention things like late fees and when they can be levied, as well as the course of action you’ll take if the tenant defaults on the rent.
Your agreement should state all the relevant tenancy fees, the deposit amount, and the circumstances in which the deposit can be withheld or forfeited.
Don’t forget to mention any relevant details about utility bills (namely, who’s responsible for their payment) and council tax. Having these details in the contract will prevent disputes at a later date and will ensure your tenant will never be confused about what responsibilities do landlords have and what falls on them.
Tenant and Landlord Obligations
You must make it clear at the beginning of your tenancy agreement about what responsibilities landlords have and your tenant’s obligations, including who’s responsible for repair, maintenance, and upkeep. As a landlord, you’re responsible for keeping the property safe, such as providing an energy performance certificate and maintaining and repairing boilers, gas lines, electrical wiring, and plumbing.
As a landlord, you’ll also be responsible for maintaining fire safety and conducting any necessary repairs. It’s the tenant’s obligation to pay rent when it’s due and to allow the landlord (you) or their representative access to the property to undertake repairs and inspections.
Property owners must give at least a day’s notice when scheduling inspections or routine maintenance work, although this doesn’t apply in case of emergencies.
Subletting Rules
You must mention your stance on subletting in your rent agreement. There are certain legal repercussions to subletting, and the tenant needs to be aware of them before signing on the dotted line. Explicitly mention that subletting without the landlord’s consent is illegal and explain the action you can take, such as eviction or legal consequences, if the tenant breaches this clause.
If you do allow subletting, be clear of the terms and conditions, such as how many rooms can be sublet and for the duration.
Pet Clauses
Another rule to be explicit about in your private landlord tenancy agreement relates to pets on your property. The Renters Reform Bill has made it much easier for tenants to live in rented property with their furry friends. But as a property owner, you still have the last word. If you do allow pets, make sure you clearly mention any specific rules you have for pet owners. For example, if the pet damages your property, you may want to make it clear that the tenant is responsible for its repairs and any associated costs.
Change in Tenancy Agreement
A tenancy agreement is incomplete if you don’t clearly highlight the start and end date of the tenancy. You should also mention whether or not your tenant can cancel tenancy agreement in the middle of the tenure, and under what circumstances. If you allow cancellations, make sure to outline when the tenancy can be cancelled or changed, how much notice needs to be given, and whether or not any financial repercussions are involved.
As a property owner, you can also break a tenancy agreement, and the terms for cancellation on your behalf need to be mentioned in the agreement, offering transparency to your renter.
Contact Habitare for Secretarial Services and Property Upkeep
A private landlord tenancy agreement will help you make sure you and your property are legally protected. This makes it easier for you to communicate with your tenant if anything unexpected happens, such as a change in tenancy, delayed rent payment, or any other dispute. In case you need to seek legal help, having a tenancy agreement can work in your favour.
If you’re seeking tenancy agreement advice, we can help. As a leading block property agent, Habitare offers secretarial services and regular property maintenance. A well-maintained property often fetches a higher rental yield, and we conduct regular inspections and proactive maintenance and offer emergency assistance to make property management easier for owners.
Contact us for more details.