Buy to Let: A guide to drafting residential tenancy agreements

Tue 14th Feb 2023

Drafting a solid tenancy agreement is one of the most important steps in letting a property. So, what key considerations do landlords need to make? Laura Noble from our residential property team explains…

When drafting residential tenancy agreements, every landlord should have a thorough understanding of EPC certificates, deposit protection schemes and other components of an agreement.

A comprehensive agreement covers you in the event of any problems or misunderstandings throughout the length of the tenancy.

A quick search online will present you with several templates for drafting a tenancy agreement. However, the majority of these will not be legally sound or tailored to your individual circumstances.

What information should always be included in a tenancy agreement?

Even the most basic of tenancy agreements will need to include straightforward information. This will include names and contact details of both parties, plus the type of tenancy and the duration.

The cost of the rent and any fees should be included, as well as when and how to pay. The deposit amount, including information regarding how the deposit will be protected is also crucial.

A tenancy agreement should also lay out the rights and responsibilities of both the landlord and the tenant. This includes whether there is an option to end the tenancy early and what the process or fee involved will be. Who is responsible for repairs and whether the property can be sublet should also be included in any standard tenancy agreement.

Problems that can occur

As well as the above information, the creation of a tenancy agreement should include all necessary legal paperwork. This is to ensure the tenancy abides by the law and covers the landlord should anything happen.

A right to rent check is a compulsory part of the letting process. Landlords can be prosecuted for failing to carry out these checks and will have to evict anybody who does not qualify.

Most tenancies will be smooth sailing if the tenancy agreement and accompanying documents are drafted properly. For first-time landlords, it can feel overwhelming as there are many legal responsibilities involved with letting a property.

From inventories to deposit protection schemes, there is a lot to think about. So, it’s important to get it right the first time.

Pets, children, and benefit recipients

If your tenancy agreement is not drafted properly, there are several problems you can run into. Often, landlords don’t know the full extent of what they should and should not include in a tenancy agreement.

For example, if you wish to exclude tenants with pets, children, or those receiving benefits then you can. However, this must be written into the tenancy agreement before it commences. Should you choose to allow tenants with pets or children, you can alter the deposit amount. This covers any additional maintenance or insurance fees that may result or as a precautionary measure.

Many landlords don’t know this and put a blanket ban on children and pets in their properties. This could be limiting your scope on tenants, and you may find it harder to let.

Gas safety and energy performance certificate (EPC)

The gas safety and energy performance certificate (EPC) can cause the biggest problem. Lots of landlords don’t realise that they need one or that they expire. If these are not up-to-date at the start of the tenancy, you will not be able to evict or serve a Section 21 notice to gain possession of your property. These need to be supplied with a tenancy agreement and are a legal responsibility—set out in statute.

A gas safety certificate needs to be updated every 12 months and for an EPC it is every ten years. Currently, you need to secure an EPC rating of ‘E’ or above. As of 2025, properties will likely need to secure a rating of ‘C’ or above.

For many, this will mean the property as it currently stands is not fit to rent. The government is allowing for a crossover period of up to 2028. This gives landlords time to comply with the new changes in respect of tenancies that are active when the law changes. The date of this change is still to be confirmed, however, it will give property owners enough time to carry out the required work to achieve a ‘C’ standard.

Repairs

When something goes wrong with the property, something breaks or requires maintenance, whose responsibility is it? Confusion regarding repairs is often something that comes up throughout the length of a tenancy.

As a landlord is typically responsible for most structural repairs, pipework, electrical and so on, this should be set out in the agreement. Costs for these types of repairs also fall to the landlord. Setting all of this out in the tenancy agreement eradicates any confusion between landlord and tenant.

Furnished or unfurnished

Different clauses will need to be included in a tenancy agreement depending on whether it’s furnished, part-furnished or unfurnished. Where there are furnishings, a separate inventory will have to be prepared alongside the tenancy agreement. Landlords also need to consider the repair of white goods if they are included in the tenancy and that soft furnishings, if included, must meet fire regulations.

Other key considerations

As well as the legalities, there are other key considerations to be made when it comes to drafting a – tenancy agreement.

Landlords must enter a tenant’s deposit into a government recognised deposit protection scheme within the prescribed timeframes. This is a legal requirement to ensure security on both sides of the tenancy.

Legislation regarding letting is changing all the time. The most recent piece of legislation being proposed is the Renters’ Reform Bill which has the potential to really shake things up. Tenancy agreements need to keep up with the legislation. Redrafting and making retrospective changes can easily be done with the help of a solicitor.

At Coodes, we provide a checklist of what to include in any tenancy agreement from basic information through to EPCs and even council tax banding.

Coodes’ residential property team

The drafting and upholding of a tenancy agreement will be a major factor in the success of your Buy to Let. When drafting a tenancy agreement, it’s important to include vital information as well as up-to-date EPC certificates and use a deposit protection scheme.

Getting legal advice will ensure you’re letting within the law and will be fully protected. It also helps first-time landlords with being fully prepared and gaining an awareness of their obligations.

As landlord solicitors, we will ensure your tenancy agreement is structured in the best way possible, helping to make your investment a success.

For more information on EPCs or other landlord matters, speak to our residential property team by calling 0800 328 3282 or by using our online form.

Tue 14th Feb 2023

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