What To Include In Your Tenancy Agreement

A tenancy agreement should have elements like the payment terms, tenant details and the financial responsibilities of both parties.

A well-crafted tenancy agreement is an incredibly important part of the rental process. This is because it sets clear expectations for both landlords and tenants from the outset.

Whilst you should always run your tenancy agreement past a professional before getting it signed, it’s worth getting to know the elements you should include.

If you need help or guidance crafting a watertight tenancy agreement, get in touch with the team at J Property Management today on info@www.jpropertymanagement.co.uk

 

What Is A Tenancy Agreement?

 

A tenancy agreement gives a tenant the right to live in a property for an agreed period of time. The agreement lays out the terms of this, so both landlord and tenant understand their obligations.

A tenancy agreement typically is used when:

• The tenant lives in the property as their main home.
• The landlord does not live in the property.

Most private landlords in England and Wales will use an Assured Shorthold Tenancy (AST), which gives tenants legal protections that cover deposit protection and eviction rights under the Housing Act 1988.

Different Types of Tenancy Agreement

 

Understanding the different types of tenancy agreement is incredibly important, as each type comes with specific legal obligations and rights.

 

The most common tenancy agreement in England and Wales is the Assured Shorthold Tenancy (AST). Options include:

 

Assured Shorthold Tenancy (AST)

An AST is the main tenancy type for most private landlords and applies when:

• The rent is between £250 and £100,000 per year.
• The tenant is renting the property as their main home.
• The landlord does not live in the property.

 

Excluded Tenancies or Licences

If a landlord shares living space with the tenant (e.g., a lodger arrangement), the agreement is usually an excluded tenancy or licence.

These agreements provide fewer tenant protections, and landlords can evict tenants without a court order, as long as they give reasonable notice.

 

Assured Tenancy

Assured tenancies provide tenants with long-term security.

Under this agreement, tenants have the right to stay in the property indefinitely as long as they pay rent, and landlords can only evict them under strict legal circumstances.

 

Regulated Tenancy

Regulated tenancies apply to long-standing rental agreements that started before 15 January 1989.

Tenants under this type of tenancy are able to have a form of rent control, meaning landlords can only increase rent based on specific government guidelines.

 

Fixed-Term vs. Periodic Tenancies

There are also two types of tenancies:

• Fixed-term tenancy: Runs for a set period (e.g., 12 months), after this, it has to be renewed or converted into a periodic tenancy.
• Periodic tenancy: Rolls on a month-to-month or week-to-week basis, giving both landlord and tenant flexibility.

 

 

 

 

What To Include In Your Tenancy Agreement

 

1. Details of the Tenancy

A tenancy agreement should start with the most important details of the tenancy, including:

• Names and contact details: Full legal names of all tenants and the landlord, as well as contact details.
• Property address: The full address of the rental property, including any flat or unit numbers.
• Tenancy start and end date: The fixed-term period (if you go this route) or a note that this is a periodic tenancy.
• Type of tenancy: One of the options above.

 

2. Rent and Payment Terms

Clearly lay out the rent payment structure, including:

• Monthly or weekly rent amount: The agreed rental price.
• Payment due date: When the rent must be paid each month or week.
• Accepted payment methods: Bank transfer, standing order, or other arrangements.
• Rent reviews: How and when rent increases will be applied, in line with government guidelines.

 

3. Deposit Protection and Deductions

Landlords must make sure they put all tenant deposits in a protection scheme. The agreement should include:

• Deposit amount: The total deposit required.
• Deposit Protection Scheme: The name of the government-approved scheme where the deposit will be held.
• Deductions: Clearly give reasons for withholding part or all of the deposit (e.g., damage beyond fair wear and tear, unpaid rent, cleaning costs etc.).

By law, landlords must register deposits within 30 days and provide tenants with deposit protection details.

 

4. Bills and Financial Responsibilities

The agreement should clarify who is responsible for:

• Council tax
• Water, gas, and electricity Bills
• Internet and TV licence Fees

This prevents any issues around unpaid bills and means tenants understand what they need to pay from the outset.

 

5. Repairs and Maintenance

Be clear around:

Landlord’s Responsibilities:

• Keeping the property’s structure safe.
• Keeping heating, plumbing and electrical systems in good working order.
• Working quickly to fix any health and safety hazards.

Tenant’s Responsibilities:

• Reporting maintenance issues quickly.
• Keeping the property clean and not damaging it.
• Carrying out minor maintenance tasks, like changing lightbulbs.

In addition to the above, the agreement should also mention how repairs should be reported and how quickly the landlord will respond.

 

6. Right of Entry and Property Inspections

The landlord’s right to access the property should also be clearly laid out, including:

• Minimum notice period: Landlords must give at least 24 hours’ notice before entering the property (except in emergencies).
• Frequency of inspections: How often routine inspections will take place.
• Access for repairs and safety checks: When tenants must grant access for maintenance and gas or electrical safety checks.

 

7. Ending the Tenancy Agreement and Notice Periods

Both landlords and tenants should understand the process of ending the tenancy. The agreement should cover:

• Tenant’s notice period: The amount of notice needed for tenants wishing to leave.
• Landlord’s notice period: The notice needed for landlords wanting tenants out.
• Break Clauses: Whether the tenant can end the tenancy early and under what conditions.

If the tenancy rolls into a periodic agreement after the fixed term, the contract should include how notice will be handled.

 

8. Restrictions and Additional Terms

Property rules should be made clear to avoid any issues, including:

• Smoking: Whether smoking is allowed inside the property.
• Subletting: Whether the tenant is allowed to sublet or take in lodgers.
• Use of the property: A clause stating that the property is for residential use only and cannot be used for business purposes without permission.

 

9. Vacant Periods and Security

If the property is left vacant for a long period of time, the agreement should include tenant responsibilities, such as:

• Informing the landlord if they will be away for more than a certain number of days.
• Taking steps to prevent damage, like turning off the water supply or leaving heating on in winter.
• Making sure the property is secure at all times.

 

The Importance Of A Well Structured Tenancy Agreement

 

A well-drafted tenancy agreement protects both landlords and tenants by clearly laying out rights and responsibilities.

Landlords should regularly review and update their tenancy agreements to make sure they comply with the latest UK rental legislation.

If in doubt, talking to a legal professional or using a government-approved model agreement can help you make sure you have all bases covered.

If you need help crafting a tenancy agreement, get in touch with the team at J Property Management on info@www.jpropertymanagement.co.uk