A tenancy agreement is a legal document between a tenant and a landlord stating the terms and conditions applicable to the tenancy. It helps if it also states the rights and duties of both parties. Under the present laws, an agreement cannot be enforced in England; Scotland and Northern Ireland, however, are both going through a spate of reviews concerning this, and a tenancy agreement is required in most provinces already. Though many people still go for an oral agreement (mainly based on trust or to save costs radically), this is being increasingly discouraged.
What does the Agreement Have?
Tenancy agreements are of two types – assured shorthold tenancy (for all private sector lets) and assured tenancies (for public or council house tenancies). In the latter case, the rules are quite stringent and formal; therefore, there is no question of going for a lease without an agreement. As for the first instance, there are two ways of classifying the document further. One is on the basis of time (i.e. how long the tenant would stay), and the other is based on space available (i.e. room, floor, or house rent). The agreement must contain certain information to have any validity.
The amount of rent agreed upon.
When it's due (monthly or weekly).
Amount of deposit required, and when it should be deposited.
Notice period from both the tenant and landlord’s side if either party wishes to discontinue.
Who is handling the council and other taxes, what is the mode of payment and other details concerning this?
Is the property centrally heated, and if so, who is paying for it, and maintaining it?
Who is taking care of the water, electricity and other costs?
Whether pets are allowed.
Can the apartment be shared, if the tenant so wishes, and the number of people staying in it?
Who is taking care of repairs as and when it may be required?
What are the other amenities to be provided – like food, furniture etc?
Apart from this, counsellors suggest that a tenant should take two more precautions. One is to take photographs of the premises while moving in, so that disputes concerning repairs or damages may be avoided later on. The other is an inventory of items that come with the premises – for example television, refrigerator, furniture etc.
The Uses of the Agreement
The obvious use of the agreement is to avoid conflict between the two parties over petty issues like the gas and electricity bills, who will repair the refrigerator, and what is to be done about the heating in winter. Apart from the obvious, there are some other factors too, that may not strike either landlord or tenant at the time of drawing it up, but are important nevertheless.
The agreement is an identity proof of sorts. If the landowner needs to validate the presence of his tenant, it will be needed.
The tenant would need to show address proof in a number of places if he is new to town. The agreement helps at bank, university, work, just to name a few vitally important places.
Any disputes over money can be eradicated, if the conditions are stated clearly in the agreement.
For security reasons, it is best to have the agreement formally in writing. Maybe everything will be normal, but what would you do if the unassuming-looking boy who rented your room turns out to be a terrorist? And what if the landlord is using his premises for some illegal purposes and the tenant becomes implicated one fine day?
Needless to say, an oral agreement is of little use to the law. If you ever have to go for any legal help, it would be very difficult without a written agreement.
The points discussed above illustrate adequately what can go wrong if the tenancy agreement is not drawn up. There is no guarantee that there won’t be little tiffs even then, but it is better to be cautious.
These written agreements should be signed by either party and a copy of the signed versions must be retained by both the landlord and the tenant. And, in case of multiple tenancies, each retains a signed copy.
Contents of a Tenancy Agreement
A tenancy agreement regulates the terms and conditions of the tenancy tenure. The agreement contains the following details:
The names of the landlord and the tenant (In other words, the names of both the signatories of the agreement.)
The address of the house
The contents in the property that has been leased out
The tenure for which the property is leased out
The amount of rent to be paid each month
The mode of rent payment
If electricity and other charges are included in the rent.
The deposit amount given by the tenant to the landlord
Whether the tenant is given the right of subletting the house.
The duties of the tenant relating to the proper upkeep and maintenance of the property. These are explicitly mentioned.
The landlord is expected to carry out the repairs and painting work.
The tenant or the landlord may want to terminate the tenancy before the expiry of the stipulated tenure. But the agreement can be terminated only after a notice period. The required notice period also finds mention in the tenancy agreement. The legally permissible notice period is 4 weeks. If the agreement stipulates a notice period of lesser duration it is not valid.
Other clauses found in some agreements pertain to the permission of having pets, etc.
Finally, both the parties read and sign the agreement. Only the agreements that contain the signatures of both are valid. And it should be signed before the tenant occupies the premises. However, the tenants hold the right to refuse signing an agreement that can be termed unfair.
The Use of Tenancy Agreements
Tenancy agreements (in writing) are useful in preserving the good will between the landlord and the tenant. It is useful for future reference.
Verbal agreements are bound to lead to disagreements. And, if disagreements get heightened over a period of time, the landlord cannot get the tenant to vacate the premises.
Importance of Tenancy Agreement
As mentioned above, tenancy agreements are necessary to prevent landlord-tenant dispute. Over the last two decades, almost 50% of the landlords had asked their tenants to vacate the premises at least once.
Tenants and landlord disagreements are quite common. The usual sequence occurs thus. The tenant asks the landlord to carry out some much-needed repair works. The landlord due to lack of time or money postpones the job. This angers the tenant who withholds the rent or resorts to late payment.
Survey results prove that the late payment of rent is the most common cause of conflict.
Other conflict-causing factors of lesser importance are the disturbing behaviour of the tenant and lack of proper maintenance of the premises.
These minor factors lead to constant altercations and almost all the landlords have asked the tenants to vacate the house at least on one occasion during the last two decades. And 8 out of 10 landlords filed court cases against their tenants. Of these, 60% of them had not signed tenancy agreements and subsequently entailed huge losses.
To prevent such occurrences, landlords and tenants must sign detailed tenancy agreements that contain all the terms and conditions of tenancy. The agreements are important for they ensure peace of mind for both the signatories. Landlords are happy as they can be assured of a good maintenance of the house. Tenants are also satisfied for their continued tenancy will not be disrupted as long as they adhere to the terms laid down in the agreement.
James Walsh has sinced written about articles on various topics from Small Business, Binding Machines and Divorce and Infidelity. James Walsh is a freelance writer and copy editor. To download a legally binding , see. James Walsh's top article generates over 368000 views. to your Favourites.