Renting a Property: A Complete Guide And Checklist
Recently there has been an increasing trend towards renting accommodation. Not only is it the obvious option if you can’t afford (or don’t want) a mortgage, but it’s also an excellent choice if you’re going to be in an area for only a short period.
Renting a property is also a good option if you’re moving into a new area, as it gives you time to get to feel for the place before you decide where to buy.
Before you rent, make sure you check the tenancy agreement, (especially the common problem areas such as deposits and the length of agreement) so that your time renting goes as smoothly as possible.
If you’re sharing with friends, there are some special issues about being joint tenants that are worth thinking about at the outset. During your rental period, it is important that you report any damage or repairs to your landlord, and that you leave the property in good condition at the end of your tenancy.
- The Assured Tenancy
- The Tenancy Agreement: Five Important Issues
- Check Before You Sign
- Renting with Others
- Reporting Repairs
- The End of the Tenancy
The Assured Tenancy
All tenancies for residential property entered into after 15 January 1989 (with a few minor exceptions), are known as ‘assured tenancies’. The most common form of assured tenancy used in the private sector is known as an ‘assured shorthold’ (or sometimes just ‘shorthold’).
All tenancies signed after February 1997 are assured shortholds, unless the agrement states expressly that it is an assured tenancy with no mention of the word ‘shorthold’.
The main principles of the assured shorthold tenancy are that it must be for a fixed term of not less than six months, and can be brought to an end by the landlord serving two months notice on the tenant. At the end of the six-month period the tenant, if given two months prior notice, must leave.
An assured shorthold tenancy will become periodic (i.e. will run from week to week) when the initial term of six months has elapsed and the landlord has not brought the tenancy to an end. A periodic tenancy can be brought to an end with two months notice.
The landlord will have an absolute right to possesion of the property at the end of the tenancy – as long as they give two months’ notice. Although the landlord cannot evict you without obtaining a court order, they will have an absolute right to such an order.
If your tenancy is an assured tenancy, then the landlord can only obtain possession if they can prove the existence of one or more ‘grounds for possession’, that is, circumstances which justify them requiring possession.
These are many and various, but include non-payment of rent and breaches of other terms of the tenancy agreement. Some grounds are ‘mandatory’, which means that on proof of the ground, the court must make an order for possession against the tenant.
Other grounds, however, are discretionary, so that even if the ground is established, the court has discretion whether or not to order possession.
If you have an assured tenancy and you receive a notice claiming possession, you should immediately seek legal advice as to your rights.
The Tenancy Agreement: Five Important Issues
There are five important issues in the tenancy agreement you need to know;
1. Tenancy Length
What length of tenancy are you looking for? Be wary of signing up for too long, because if you decide to leave early, you’ll be liable to pay rent for the rest of the time you agreed.
However, most landlords will take a favourable view if you can find an acceptable replacement tenant for them.
It’s usual for a landlord to require a prospective tenant to pay a deposit as well as a month’s rent in advance. Normally the deposit will be equivalent to one or two months rent.
You should not agree to pay more than the equivalent of two months rent as a deposit – this would almost certainly be unfair. The idea behind a deposit is that if you fail to pay the rent, or cause any damage to the house or contents, a landlord can use this money as compensation without the need for expensive court proceedings.
Many tenancy disputes arise out of the repayment of deposits at the end of the tenancy. Landlords sometimes claim that there is damage, which is then disputed by the tenant. Equally, there may be a disagreement as to the amount that should be deducted as compensation for the damage caused. The landlord has the advantage – as the tenant you have already handed over your money and it is unlikely to be returned unless you go to court.
The tenancy agreement should make clear the following:
- That the deposit is held on trust for the tenant. Otherwise there is a risk that the money will not be recoverable by the tenant if the landlord should become insolvent.
- What the landlord (or the letting agency) can use the deposit for – either just for arrears of rent, or for breakages as well.
- Whether the landlord can require you to top up the deposit to the original amount if they make use of the deposit during the tenancy for the agreed purposes.
- Whether the tenant is entitled to receive interest on the deposit for the time it is held by the landlord.
The government has introduced a Tenancy Deposit Scheme, which aims to provide security for tenants’ deposits and independent resolution of disputes.
From April 2007, all deposits (for rent up to £25,000 per annum) taken by landlords for Assured and assured shorthold tenancies must be protected by this scheme. More details are available on the Communities and Local Government web site http://www.communities.gov.uk/housing/.
3. Right of Entry
Landlords frequently keep keys to the properties they elect, but the law does not allow them right of entry unless this is specifically stated in the agreement.
A landlord may arrange to come round to see what repairs need doing, but otherwise, they have no more right to enter the property that a stranger has.
The whole essence of the tenancy is that the tenant has a right to exclude anyone and everyone from the property – including the landlord.
4. Rules and Regulations
It is usual for a landlord to include in a tenancy agreement various rules and regulations that state what you can or cannot do in the property. These will often aim to avoid causing a nuisance to neighbours.
Whatever it is you agreed to, your signature on the tenancy agreement holds you to it. If you do not comply with these provisions, a landlord may well be able to bring the tenancy to a premature end.
However, what a landlord cannot do is impose new rules after you sign the agreement – unless, that is, the agreement allows it.
If the property is being let furnished, ensure that there is a detailed inventory of the contents. It should not only include everything in the house, but also describe its condition, detailing any damage.
Go through it carefully and don’t sign it unless you are sure it is accurate. This can save all sorts of arguments at the end of the tenancy when it comes to the repayment of the deposit. The landlord will often make a deduction because of a damaged item, despite the tenant’s claim that it was in that condition to start with.
Check Before You Sign
It cannot be stressed enough that you must read and check the tenancy agreement carefully and thoroughly before sign it.
If in doubt, seek advice from a Citizens Advice Bureau (CAB) or free housing aid centre if there is one in your area.
Be wary of pressure to sign immediately because of the queue of eager tenants behind you. Although there may well be others waiting to snap up the property, any reasonable landlord will give you time to make sure you understand what you are signing – after all, this is in the interest of both parties.
Renting with Others
If you plan to share with others, you may be asked to sign the same agreement and become joint tenants. This means each tenant can be held responsible in full on all the terms of the agreement. The landlord can claim the full monthly rent from any of you – they are not bound by any arrangement you have made to each pay a contribution. And if one tenant leaves, the rest will still have to pay the monthly rent between them.
If one joint tenant leaves, the rest will almost certainly need the landlord’s consent to bring in another person to share. If you do this without consent, the landlord might well be able to obtain possession of the property.
A joint arrangement also means that if one tenant breaks the terms of the agreement by causing damage, the landlord can again claim against any one tenant for that loss, or retain some of the deposit at the end of the letting. If you end up paying more than your share, or losing your part of the deposit because of another’s breakages, you can claim that amount from that person – if you can find them and if they will pay up. If court proceedings are necessary, these may be expensive.
Alternatively, you may be asked to sign a separate agreement each, promising to pay a specified amount of the rent. If one of the tenant leaves, your liability doesn’t change – but it is up to the landlord to find a replacement tenant. You might want quickly to find a replacement who is acceptable to the landlord.
In the case of breakage or damage, although each occupier has signed a separate agreement, it will be impossible in practice for the landlord to know which of the occupiers actually caused the damage. Usually the agreement will allow the landlord to hold any tenant liable for any damage, no matter who caused it.
Landlords can only be expected to do repairs if you tell them what needs doing – until you have done this, they are not liable. It is advisable that you do this in writing, listing the repairs that need to be done.
Once you have reported a repair the landlord must do it within a reasonable period of time, although what is reasonable will depend on the nature of the repair.
The landlord must ensure that the repairs are done in an orderly and efficient way with minimum inconvenience to you.
If the works are disruptive or if property or decorations are damaged you can apply to the court for compensation or, if necessary, for an order to make the landlord behave reasonably.
Many landlords are very conscientious about maintaining their property. It is, after all, in their interests to keep it in good condition. But some landlords are not helpful and repairs can remain outstanding from a long time, often at great inconvenience to the tenant.
Going to court to force your landlord to do repairs is an option, but can be lengthy and expensive. What you cannot do is simply stop paying the rent – the fact that the landlord has vowed to do the repairs is not grounds for defence if they sue you or try to evict you for non-payment.
If persuasion, or persistence, does not work, you can warn the landlord that unless they carry out the repairs, you will have them done yourself, and then deduct the cost from future payments of rent. In such a case it is obviously safest to get at least two estimates first and send these to the landlord in advance, so they can be no argument that the cost is excessive.
The End of the Tenancy
The tenancy agreement will normally set out your obligations when the tenancy comes to the end of its term.
On the whole, tenants will have an obligation to:
- Have kept the interior clean and tidy and in a good state of repair and decoration.
- Put anything that they have moved or removed back to how it was.
- Have not caused any damage.
- Have replaced or paid for the repair of anything that they have damaged.
- Have replaced anything that they have broken.
Although normal wear and tear is allowed for, most tenancy agreements will require the tenant to pay for anything that is worn or damaged beyond this.
The landlord will normally recover any loss from the deposit given at the start of the tenancy. It is up to the them to negotiate compensation for any damage caused, but this should be within reason.