Don’t get caught out – make sure your tenancies are legal

Mary Latham, NLA Regional Representative for the West Midlands, provides some top tips for ensuring your Assured Shorthold Tenancy Agreement (AST) does not fall foul of the law.

While there have been major changes to landlord and tenant law over the last 20 years, the legal focus is still on protecting the rights of the tenants rather than safeguarding the landlords business interests.

Therefore, it is up to me to protect myself and my business.

Tedious as it can seem, my best protection is a thorough paper trail and the most important document is the tenancy agreement; usually an Assured Shorthold Tenancy (AST). There is no legal requirement to use written AST but any landlord who lets without one is taking a huge risk.

ASTs should be written in plain, intelligible English and should clearly state all the important details. Most off the shelf AST’s are fairly straightforward when it comes to the basics. However, I find the ‘small print’ regularly causes problems, which can be significant should problems arise down the line.

If a landlord takes a tenant to Court based on a clause in the AST, the Court will look at whether that clause is ‘fair’. If the Court decides the clause is ‘unfair’ they will remove the clause and the landlord will not be able to rely on it.

For example landlords frequently include a term like: “The tenant will not keep any pets or animals”.

Although this sounds perfectly acceptable to many, as it represents a complete ban on keeping pets, it will be classed as unfair and the landlord will be unable to rely on it in Court.

This is easily remedied though, by adding the caveat:  “without the express prior written permission of the landlord which will not be unreasonably withheld”.  This demonstrates that the landlord is willing to consider their tenants request and should be deemed fair.

In my 38 years as a landlord I have seen many clauses in tenancy agreements that breach consumer protection legislation.

Here are three common unenforceable  clauses I have seen over the years which are almost certain to see a landlord’s case thrown out of court:

1. “Allow the landlord or his/her agent to enter the property with prospective tenants or to inspect the property, during reasonable hours, 24 hours notice will be given where possible”.

The words “where possible” cause problems here as tenants have a right to the quiet enjoyment of the property. A minimum of 24 hours written notice must be given

A landlord cannot enforce any term which requires a tenant to give the landlord access to the property. A landlord may only enter with the agreement of the tenant, or failing that a court order.

2. “At the end of the tenancy, following the return of keys to the landlord, if it is necessary for the landlord to deduct an amount from the deposit for the cost to make good any damage caused to the premises or the furniture the Landlord must inform the tenant in writing within one month of receiving keys and proof of payment of bills. The deposit will only be returned once all outstanding bills have been paid and proof of payment correspond with the final readings”.

This clause has two problems. Firstly, it breaches the Tenancy Deposit Protection rules. The undisputed amount of the deposit has to be returned within 10 working days – together with quotes and receipts to justify any amount to be withheld.

Secondly, if the tenant is the bill payer they have a separate contract with the utility provider meaning that the landlord is not responsible. Therefore you cannot require proof of payment before returning the deposit.

3. “In the event of the rent or any part of it being unpaid for more than 14 days after it has become due whether legally demanded or not if there shall be a breach of any of the obligations on the part of the tenant … the landlord may re-enter the property or any part of it in the name of the whole and immediately the tenancy shall end without prejudice to any other rights or remedies of the landlord”.

This one is straightforward – a landlord cannot repossess a property for any reason without a court order, this is misleading and cannot be relied on in court.

Do not risk writing your own agreement or using one you found on internet. Use a tenancy agreement that has been checked by legal experts to ensure that you do not fall foul of these regulations.

My advice would be to save yourself some time and trouble by using the free NLA AST on our website. Otherwise it could end up costing you hundreds if not thousands of pounds.

If you feel that you need to add clauses to this AST members can call the NLA Advice Line to make certain that your clause is legally enforceable.

37 thoughts on “Don’t get caught out – make sure your tenancies are legal

  1. Thanks Mary. Sound advice for all landlords especially for those new to the business. Keep it coming. Maggie

  2. Mary, thank you for this helpful and insightful blog.
    It was clear and easy to digest and makes an important, and often over-looked point, about the importance of a correct AST set up.
    I am getting to know you through your much valued contributions to the Property Tribes forum, and it is clear you have a great deal of experience to share. I hope you continue to blog and post.
    You are one of those quiet, unassuming Landlords who just gets on with the job of Landlording in a professional, ethical, and legal manner.
    Don’t go changing! :)

  3. A great insight in to a very dificult area. Far too many people under estimate the power that the tennant posses.

  4. Thank you Mary,there are some excellent points of which I was not aware.I will study my AST to make sure I am protected.Terry

  5. Great blog Mary.

    I agree with your point regarding utility bills. I’m not sure why landlords insist on that approach as it’s more hassle and work for the landlord. Just don’t get involved with utility bills in the first place, it’s not worth the headache.

    Having said that, it’s a big anoyance for landlords when a property is returned and the landlord discovers card meters have been installed without their knowledge.

    PS Vanessa…….. “quiet”……….are you sure?

  6. Bob, You are right card meters are a problem, particularly where a landlord has an HMO with hard wired smoke detectors. If the card is not “fed” the smoke alarms will not operate for more than a short time on the back up battery.

    This is one of the reasons I always tell landlords to give advice to their tenants about their options for paying utility bills, especially when those tenants are young people (students for example) who may not have any experience of paying bills. Monthly direct debits from a “house” account into which they all make monthly payments is a good solution. Utility companies will fit card meters where there are arrears and they are far more comfortable with DD payments.

    I do see your point about not getting involved, and of course we have no legal obligation to do so, but it is good management to ensure that the property does not become known to utility companies for potential payment problems. It is always good practice to give tenants the information and help they may need to ensure that they inform the utility companies that they have taken responsibilty for the account and give a start up reading This avoids the situation where the bill remains in the landlords name throughout the tenancy and it is the landlord who will then be chased for payment. I have seen this happen many times.

    Vanessa has not met me yet Bob as you may have realised.

  7. I wonder what terms or conditions have other landlords seen that they think my not be fair terms?

  8. This is superb! Great advice – very easy to follow, and a brilliant way to “refresh” my memory and learn new tips. I really love this blog.

  9. I have just been asked this question by a landlord who read this blog I am posting it here because it is a good example of how an issue can be covered in an AST simply buy changing the wording.
    “I once spoke to a landlord who wrote into his tenancy that cooking curry was not allowed. He had complaints from neighbours resulting from a previous tenant who stunk out the block to the extent that he had to have all carpets and curtains cleaned and everything re-painted when the tenant had gone just to get rid of the smell of curry. I have always wondered whether that was legal.”
    The best wording to cover an issue like this would be
    Not to use the premises or allow others to use the premises in a way which causes a nuisance, annoyance or damage to neighbouring, adjoining or adjacent property; or to the owners or occupiers of them.
    Interestingly a landlord raised this issue on one of my seminars last year. This landlord owned a block of 20 flats. One of the tenants was an avid cook and constantly filled the building with cooking smells, other tenants were moving out because they could not tolerate the smells. The landlord said that the “cook” was a brilliant tenant and he realised that she was not intentionally causing a problem and he was reluctant to ask her to leave. One of the great things about landlord seminars is that there are landlords who often have other businesses and on this occasion, as luck would have it, there was a landlord who was a restaurateur. He told the landlord that there is a simple extraction system that is used by most restaurants and he even gave the landlord the suppliers details and part number. The solution was obvious once he had pointed it out but I certainly would not have thought of it without the input from the restaurateur.
    Finding ways to sustain tenancies should always be uppermost in a landlords mind – evicting tenants is a last resort.

  10. Valuable information, Printed off and stored with my other landlord do’s and dont’s.
    Ive passed this on to a couple of freinds who have recently become landlords. This really is useful information.
    Thank you Mary

  11. I found your article very informative indeed. It’s reassuring to know that members of the NLA have access to colleagues with this level of expertise and experience available, to offer good, sound and practical advice.

  12. Hi Mary

    Great insights and advise as always from my colleague. I would also add that if you use a letting agent to also check their tenancy agreements. I have seen so many ridiculous clauses from agents I’ve lost count. Particularly in the London area (my patch), the reason for the practice stems from the legacy of commercial tenancy agreements over £25,000 pa rent where of course you could write what you want. But of course that has all changed since the long overdue regulation was changed last year to bring all tenancies below £100,000 under the Housing Act AST. Yet I came across a high street letting agent still issuing commercial tenancies in January this year. So check your agents tenancy agreements before blindly signing them. Unfortunately, many tenants we deal with from overseas have no idea so agents continue to write in these clauses. Many are written to make an Agents life easier and Mary has quoted some classic examples. Finally I would also add that if you prefer not to have pets, smokers, or high heels on wooden floors or whatever it is, you can always state those ‘preferences’ in a seperate addendum BEFORE you sign up a tenant as Tenancy Guidelines. Especially so, if such terms already exist in the Head Lease, which is again very common in London type accoodation. Most tenants are reasonable and will abide by sensible guidelines. At the end of the day you can’t regulate a persons behaviour but only guide them towards sensible communal living.

  13. Hi Mary, great blog!..keep up the good work. I wonder if I may broaden the scope of “fair terms” a bit and introduce data protection? I’ll chance my arm here by stating that I’m one of those landlords who’s never happy unless I’m “tweeking” an AST… ouch! ;O)

    I’m not sure of the original source of the following text but it’s something I was encouraged to put at the beginning of my AST. I do respect your knowledge and experience so would value your opinion as to whether this is worthwhile, good, bad or whatever.. thanks

    “IMPORTANT: You are advised that the Data Protection Act 1998 does not prevent a landlord from releasing personal information where they have a legal obligation to do so. Furthermore the landlord may provide your details to government agencies, a tracing agent or debt-collection agency for the purposes of recovering money owed to them and by signing this agreement you consent to such information being shared.”

  14. At last someone to fight the corner on behalf of the often beleagured Landlord. More please!

    Phil.

  15. Debbie, In a single tenancy it is reasonable to expect a tenant to meet a clause which requires him to keep the garden tidy. It is good practice for the landlord to provide the appropriate tools, lawn mower, hedge trimmer etc., to enable him to do so. The landlord always remains responsponsible for the safety aspects of the property and this includes his land around the property. If a tenant failed to keep access clear or left overgrowth that presented a trip hazzard to those entering the grounds or passing by the landlord would need to enforce the clause or get the work carried out himself to keep himself safe from possible litigation/prosecution.

    The landlord of an HMO should always maintain gardens/grounds/pathways and this includes the removal of rubbish as part of his HMO Management responsiblities and duty of care.

  16. Data protection is a whole subject of it’s own Pat and any landlord who wants to be certain that he is not breaking the Data Protection Act 1998 should take legal advice. This is one of the many reasons why it is dangerous for landlords to write their own AST’s.

    The NLA does have a clause in our on-line AST about data Protection and ours has been checked for Unfair Terms by a fully-qualified senior solicitor who works exclusively in Landlord and Tenant Law.

    However, if you are concerned about any clause in your contract, I would recommend you contact a solicitor. If you are an NLA member, we have a firm of solicitors, Seddons, as a Recognised Supplier: http://www.landlords.org.uk/services/suppliers/all#legal

  17. Despite all the trials and tribulations of being a landlord it’s still a great business to be in. This report from NLA dropped into my in box today. All I can say is Roll on 2016!

    LANDLORDS REPORT GOOD TENANT RELATIONS
    AS RENTAL DEMAND CONTINUES TO RISE

    An overwhelming majority of landlords say they have a good relationship with their tenants, according to a survey* by the National Landlords Association (NLA).

    It found 61 per cent of landlords have “very good” relations with their tenants, while a further 34 per cent describe their dealings as “good”. Three per cent say their relationship is “adequate” while less than one per cent say it is “poor”.

    The survey also found 36 per cent of landlords communicate with their tenants at least every month, while about four in ten have contact “when the need arises”.

    The survey comes off the back of a surge in demand for rental properties. It has been predicted that one in five households will rent privately before 2016**.

    David Salusbury, NLA Chairman, commented:

    “The NLA believes that the private rented sector will play an increasingly important part in helping to meet the demand for quality housing in the coming years. It is pleasing to have confirmation that almost all landlords have a good relationship with their tenants and that both parties are content.

    “The best way to ensure good relations between the tenant and landlord is to ensure the right tenant is selected for the property. The NLA advises that all landlords should meet with the prospective tenant, view the property together, discuss the tenancy agreement in detail and explain how and when the rent should be paid.

    “Landlords should maintain this professional relationship by staying in touch with the tenant, and ensuring any problems are attended to promptly. It’s also important to do a background check on a prospective tenant. Tenant checks can help prevent fraud and any possible rent arrears.”

    Visit http://www.landlords.org.uk/tenantcheck for more information on obtaining a tenant check.

    To join the NLA and take advantage of the on-going support and up-to-date information for landlords, visit http://www.landlords.org.uk/membership

    -ENDS-

  18. Very useful advice, I am considering becoming a landlord due to being left a property.
    What would you three top tips for the new landlord be?

  19. These are my top tips, they are not all relevant to your situation but I think that they are worth knowing
     Know the law related to letting property and the many other pieces of legislation and regulation that cross over into our business BEFORE you spend your hard earned cash or saddle yourself with a major debt.
     Identify your market BEFORE you buy property
     Whatever price you pay will only be the beginning not the end and you need a good reserve of cash to maintain any property, even a new build and to cover voids
     Identify what your market requires – can you provide this and still make a profit?
     Property investment is for the long haul
     If you want to invest in property but do not want/feel you have the skills to manage the tenants and the property PAY someone who can – but make certain that they know their business before you hand over this huge responsibility which could seriously bite you on the b*m
     Join a landlords association to get the support, information, early warnings, helpline, forms and networking opportunities
     If it sounds too good to be true – it usually is – but you know that one don’t you!

    Since you already have a property that you want to let

    Join the NLA and read the Landlord Library – it is without doubt the most comprehensive online guide for any landlord and I often use it when the NLA advice line is closed. Use the NLA forms – they are safe because they have been checked by a solicitor who specialises in Landlord and Tenant Law. If you have specific questions you will have full access to the excellent, well trained, advice line staff who never make landlords feel like they are asking a silly question.
    Attend as many landlord meetings as you can – the networking opportunity is invaluable and landlords in your area will tell you things that you will never find out from any other source. NLA and Local authorities run regular landlords meetings – you will find them on their websites. At these meetings you will be given information that may save you making expensive mistakes.
    This is a quote from a landlord whom I respect
    “Being a landlord gives me freedom – my tenants pay for that. I give my tenants freedom to live in a safe and comfortable home – thats my way of thanking them.”
    Good luck

    Also see the Blog by my colleague Julie Woolfenden Getting off to a Good Start

  20. Liz, A landlord is always responsible for the maintenance of the heating system in any type of residential rented property. A tenant should use the system in accordance with the manufacturers In Use and Safety Instructions and therefore landlords must give their tenants a copy to ensure that they are able to meet this requirement. It is also good practice to demonstrate how the system works with every new tenant. It is a common mistake to assume that a tenant will understand how a heating system works and a landlord should never make this assumption. If a tenant damaged the system through lack of understanding it would not be reasonable for a landlord to expect him to pay for the damage, if however, the landlord had done everything reasonable to ensure that the tenant understood how the system worked it would then be reasonable to expect that it is used in “a tenant like manner”.
    The heating system must be maintained so that it operates as it should throughout the tenancy, even where it has been damaged by a tenant. It is good practice to offer some temporary heaters during cold weather, while the system is being repaired, but this is only a very short term emergency option and cannot be used to replace the system that was in place at the start of the tenancy.
    If the heating is fueled by gas a Gas Safety Certificate, issued by a Gas Safe registered engineer, must cover it at all time during a tenancy.

  21. Hi,

    if the tenant is in lodger agreement when initially started to rent as we wanted to leave there but later plan changed and it should have been AST now. Now i am trying to evict this tenant as she is such a trouble maker and one of the tenant from hell.

    Can i evict her with Section 21 notice?

  22. Nepasa, The status of this tenant/lodger is not clear from you post. You would need to give more information before I can say whether a Section 21 Notice would be appropriate.
    1. Is the tenant sharing your home?If so she is legally a lodger
    2.Is she living in a property that is soley occupied by tenants? If so she is legally a tenant
    Regardless of what your contract says the law defines her status and therefore which type of contract terms are appropriate. An S21 is only needed if this person is, in law, a tenant
    3. What date did the occupancy begin? A Section 21 Notice can be served but cannot require this person to leave until the expiry of the last day of the sixth month. The notice period that you must give in a S21 is a minimum of 2 months but there are other requirements depending on when the occupancy started.
    If you are a member of the NLA please call the advice line so that they can give you the relevant information to suit your situation, getting it wrong can be a costly mistake if this person is, in fact, a tenant in the eyes of the law.

  23. Certainly worth contacting the NLA advice line to talk through any AST problem areas. They are very helpful & have given welcome advise especially on old tenancy agreements. Particularly relevant to the financial stability of all landlords!

  24. Hi Graham nice to hear from you. I am sorry I have only just seen your post. You are right this is a problem, tenants seem to sign an AST whatever it says and I know for a fact that many do not read them. Last year I decided to check and I asked my new tentants to sign the AST without first giving them an Inventory, my AST says that the Inventory is part of the contract and is attached. Not one tenant asked for the Inventory before signing and seemed not to notice that it was not attached until I gave it to them. I always give my tenants a blank AST to take away and study before they sign, I ask if there is anything that they need to discuss or do not understand – I don’t know what else a landlord could do to ensure that the tenant understands what he is signing

    Regardless of whether a tenant reads the AST before he signs or not an unfair term is not enforceable and they have the protection of the law.

    1. Hi Mary,
      still soldiering on. I rely on younger self employed managers these days. I really cannot be bothered with the bureaucracy. God (or a landlords association) help the new landlords.
      Best Regards, remember me to all, Graham.

  25. Hi Mary

    Thank you very much for all the sound advice and the hard work you put in on behalf of landlords, you are doing a great job

    Wai-Lan Liu

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