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QUESTIONS AND ANSWERS WHEN LETTING A PROPERTY

What is a tenancy agreement?

A tenancy agreement is a legally binding contract between a landlord and tenant that sets out both the legal and contractual responsibilities and obligations of the two parties. It should be written in plain, intelligible language with no unnecessary jargon. The terms and clauses should be fair and balanced, taking account of the respective positions of the parties and should not mislead about legal rights and responsibilities.

What about an inventory/schedule of condition?

This is an absolutely essential document that provides a written benchmark which should be amended, updated and recreated before the beginning of each new tenancy. A properly constructed inventory/Schedule of Condition details the fixtures and fittings and describes their condition and that of the property generally. It is a document that helps protect the interests of both landlord and tenant.

What about insurance?

Landlords and tenants should take care to review any existing policies when renting or letting a property for the first time as some standard insurance products will either not provide cover, or might place restrictions on cover, for rented property and/or its contents. A failure to inform your insurer that you are renting/letting a property could invalidate any subsequent claim. It is for a landlord to insure the building and his/her contents, fixtures and fittings.?The tenants are responsible for insuring any of their own possessions.  There are various specialist insurance products designed for landlords and tenants and rented property; - buildings, contents, legal expenses, emergency repair cover, rental guarantee cover etc..

Who is responsible for council tax, water rates and other utilities? ?

A tenant becomes liable for payment of council tax, water rates (unless otherwise stated), gas and electricity supplies.

What kind of tenancy agreement will be used?

The most common form of tenancy agreement is an Assured Shorthold Tenancy Agreement (AST) under the 1968 Housing Act (amended 1996). This type of tenancy has the most flexibility to both landlord and tenant; has straightforward notice procedures for bringing the tenancy to an end and a special Accelerated Possession court procedure should tenants fail to vacate the property.?If certain specific conditions are met relating to the proposed letting, a ‘contractual’ non-Housing Act tenancy must be created. One example of this would be what is commonly referred to as a Company Let, where the tenant is a bone fide  registered company, another would be where the annual rent equates to over £25,000.?Very rarely, a prospective tenant may be offered a full ‘Assured’ tenancy that gives very significant and potentially long-term security of tenure to a tenant.  In this instance a landlord can only get possession in very limited circumstances.

What is an Assured Shorthold Tenancy?

Created by the Housing Act 1988 and in operation since January 1989, latterly revised by the Housing Act 1996, all residential premises are let on Assured Shorthold Tenancies (ASTs) unless otherwise stated. An AST must be for a fixed term usually being a minimum of six months.  At the end of a fixed term and unless a further period is agreed by both parties, an AST automatically becomes a Statutory Periodic Tenancy still subject to the terms and conditions contained within the original lease.?In order to end a tenancy the landlord/agent must serve the tenant with a Notice of Repossession at least two months before it is to take effect.  A tenant may give one months notice in writing. Notice would not be valid if the expiry date falls before the end of a fixed term.

Joint and several – what does this mean?

Mostly, where there is to be more than one (adult) person living in the property, the tenancy will say they are “jointly and severally” responsible.  This expression means that, jointly, the tenants are liable for payment of all rents and all liabilities falling upon the tenants during the tenancy, as well as any breach of the agreement. Individually, each tenant is responsible for payment of all rent and all liabilities falling upon the tenant, as well as any breach of the agreement until all payments have been made in full.

What is a ‘break-clause’?

This is a clause sometimes inserted in a fixed-term tenancy, typically if the initial fixed-term is for a year or more.  A break clause will usually be worded in such a way as to allow either landlord, or tenant to give two months written notice at any stage after a particular date or period of the tenancy, thus terminating the tenancy earlier than the end of the original fixed-term.

What happens if either party (landlord or tenant) unexpectedly wants to end an existing tenancy early?

There are only limited ways in which this can happen; the landlord cannot make the tenants move out, nor can the tenants lawfully walk away from the obligations to fulfil the contract. Either party might request of the other that a formal “surrender” of the tenancy be allowed. It would then be up to the parties to agree the terms and conditions of such surrender. This might include some financial compensation for inconvenience.

What about rights of access to the property – what are the rules?

A landlord, or his agent, or someone authorised to act on his behalf has a right to view the property to assess its condition and to carry out necessary repairs, or maintenance at reasonable times of the day. The law says that a landlord or agent must give a tenant at least 24 hours notice in writing (except in an emergency) of such a visit.  Naturally, if the tenant agrees, on specific or odd occasions to allow access without the 24 hours prior written notice, that is acceptable. A clause in the tenancy agreement which tries to diminish or override a tenant’s rights in this respect would be void and unenforceable.

What about repairs and maintenance?

A landlord, in very general terms, has a legal responsibility to repair the structure and exterior of the property, including drains, gutters and external pipes; to keep in working order the installations for the supply of gas, electricity and water; and for the installations for the provision of space and water heating. The landlord also has other legal responsibilities relating to the safety of such items as gas, electricity and furnishings, as well as the general standard or fitness of the property for habitation.?A tenant has an implied covenant to act in a ‘tenant-like manner’.  Broadly, this means to report disrepair promptly; to take reasonable steps to ensure that neither the tenant nor guests damage the property, its fixtures and fittings; to do the minor day-to-day things any home-occupier would normally do e.g. replace light bulbs, fit a new battery in a smoke or C02 detector, tighten an odd screw which has come loose on a door handle etc.; to keep the property reasonably warm and aired to help prevent condensation, or freezing of pipes; to leave the property secure when absent from it; to keep the garden and other areas reasonably tidy and free from rubbish.

Are there any rules about what comes with a property if it is fully furnished, part-furnished or unfurnished?

There are no strict rules about this. Generally, you can expect a property that is described as fully furnished to include all of the main fixtures and fittings, furniture, white goods, plus standard crockery, cutlery, pots and pans etc. This can and does vary though.?Conversely, an unfurnished property will usually be provided only with basics such as curtains, carpets and light fittings.