Residential Tenancy Agreement

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Residential Tenancy Agreement

A residential tenancy agreement is the document agreed between a landlord and tenant which sets out the legal terms and conditions of the rent contract. This agreement allows the tenant to live in a property as long as he pays rent and follow the rules.

What is Room Rental Agreement?
Rent a Room Agreement (often referred to as a House Share or Lodger Agreement) is specifically for circumstances where the landlord is also resident in the flat or house where rooms are being let. Common applications include that where a lodger is taking a room in a family house, or where a number of people share a house, one of whom is also the landlord.

This is not residential tenancy agreement. The tenants in room rental agreement cannot claim the same rights, as they are sharing the landlord's own home.

Difference between Residential Tenancy Agreement and License
A tenancy gives the tenant a legal interest in the land - in effect, legal ownership for the period of the tenancy. The tenancy can even be sold (assigned) to another tenant, though residential tenancies usually forbid this.
The grant of a license does not create an estate in land and the licensee does not gain an interest in the property, purely permission to occupy it. Stays in Hotels, Hostels, Lodgings (where the "landlord" is resident) (letting a room in your own home) holiday lettings, and employees of a business living on the premises, are all license agreements.
Does a Residential Tenancy Agreement have to be in Writing?

Tenancy agreements can be either written or oral. However, there are pitfalls to be aware of when using an oral tenancy agreement. If an oral tenancy agreement is used, in the case of a dispute there is no proof of the terms agreed at the start of the tenancy, and this can lead to problems.
Types of Residential Tenancy Agreement
There arethree types of tenancy agreement used by landlords and tenants:
Assured Shorthold Tenancy (AST)
This is the most common type of tenancy agreement used when renting private residential properties. Most lettings which began after 28 February 1997 are likely to have an AST in place. You may have an AST if all of the following apply:

  • your rented property is private
  • your tenancy started on or after 15 January 1989
  • the property is your main accommodation
  • your landlord doesn't live in the property

All new tenancies are automatically ASTs

Assured Tenancy
This type of tenancy agreement is used for properties let by a housing association or by a housing trust. The tenant has a higher level of security with this form of tenancy, as it allows them to remain in the property as long as they comply with the terms of the agreement. They must show the court that they have a good reason for wanting possession, using one of the grounds for possession in the legislation.

Regulated or ‘Protected' Tenancy
If a letting began before 15 January 1989, this type of tenancy agreement may be in place. A regulated tenancy offers the tenant the highest level of protection against eviction and increased rent.
A tenant may have a regulated tenancy if all of the following apply:

  • you moved in before 15 January 1989
  • you live in a different building from your landlord
  • you do not get other services included, like cleaning

All three types of tenancy agreement set out the rights and responsibilities the landlord and the tenant have to each other and the property. Tenancy agreements ensure landlords and tenants are entitled to their statutory rights.
What should Residential Tenancy Agreement Include?
It is important that both parties are fully aware of what is included in the agreement.  Standard information that should be in all residential tenancy agreements includes:

  • All parties involved (this includes the guarantor if there is one).
  • Address of the property (or room) being rented.
  • Start and end date of the tenancy.
  • Name and address of landlord.
  • Name and address of any letting agent.
  • Amount of rent to be paid and the date it should be paid.
  • Method of payment.
  • Any additional charges.
  • Whether a deposit must be paid, what it covers and the amount paid.
  • Whether the tenancy can be ended early by the landlord or tenant and if so how much notice must be given.
  • Who is responsible for minor repairs.
  • Whether a tenant is allowed to sublet.
  • Whether a tenant can have lodgers.
  • Whether the tenancy may be passed on to anyone else.
  • Rules regarding pets, smoking etc.

Remember, an agreement can be amended by adding or removing any terms as required, as long as they do not conflict with law. When approved by both landlord and tenant, a tenancy agreement is a legally binding document

Who will keep Agreement?
A tenancy agreement is read and signed by both the landlord and tenant, and the tenant is entitled to receive a copy of the agreement. Landlords should provide the tenant with sufficient time to read the agreement and raise any questions they have before signing and agreeing to the terms.

Tenancy Deposit Protection Scheme

All landlords and letting agents who take deposits for Assured Shorthold Tenancies in England and Wales must join a Government-authorised tenancy deposit protection scheme. Within 14 days of receiving the deposit the landlord must provide the tenant with details of the scheme chosen by him to safeguard the deposit. For more details see Tenancy Deposit Protection Scheme.

Changing the Tenancy Agreement

A tenancy agreement can normally only be changed if both tenant and landlord agree. If both agree, the change should be recorded in writing, either by drawing up a new written document setting out the terms of the tenancy or by amending the existing written tenancy agreement.
An oral agreement can also be varied. Usually the variation will be oral too. In the case of a dispute, evidence of the variation can be provided if there were witnesses to the new agreement or simply by both parties acting on the variation, for example, by paying and accepting a new rent.
Relevant Provisions of Law
All residential tenancy agreements must comply with statutory law. This is law that has been passed in parliament and is therefore legally binding and enforceable regardless of what is stated in the residential tenancy agreement. With all residential tenancy agreements there are rights by law for both landlord and tenant; even though these may not have been discussed between both parties, they apply to all tenancy agreements.

Rights and Obligations under a Residential Tenancy Agreement

All types of tenancies include the following rights and obligations.

Rights and obligations as a tenant

Tenants' rights include:

  • freedom to live in the property undisturbed
  • the right to live in a property in a good state of repair - your landlord should make repairs and maintain the property
  • the right to access information about your tenancy at any time
  • protection from unfair eviction

If you fail to pay rent or breach other terms of your tenancy agreement you can lose your legal rights as a tenant.

Rights and obligations as a landlord

As a landlord, you also have rights. You can:

  • repossess the property when the tenancy ends
  • take back the property if it gets damaged
  • access the property by giving 24 hours' notice
  • take legal action to evict your tenant in some instances - like non-payment of rent

You may have other rights and responsibilities specifically included in your tenancy agreement.

Ending a Residential Tenancy Agreement

If you are seeking possession because your tenant has not paid the rent or has broken one of the other terms of the tenancy agreement, different rules apply, depending on which type of tenancy your tenant has. For example, if the tenancy is an assured tenancy, you will need to use one of the reasons or 'grounds' for possession in the Housing Act 1988. 
If you use one of the grounds from the Housing Act 1988, either two or four weeks' notice may be required. Some grounds are mandatory – this means the court has no choice but to make a possession order if it is satisfied that the ground exists. 
Examples of mandatory grounds include:

  • more than eight weeks' rent arrears (unpaid rent)
  • repossession by mortgage lender (eg the property you own and rent out is being repossessed)

Other grounds are 'discretionary' – this means the court will look at the reasons and decide if a possession order is fair. 
Examples of discretionary grounds include if the tenant:

  • often pays rent late or does not pay rent
  • breaks the terms of the tenancy agreement
  • is a nuisance to neighbours
  • uses the property for illegal purposes (for example, dealing drugs)

For more details, see Section 8 Notice to quite.

Residential Tenancy Agreement should not be Unfair

The residential tenancy agreement is a form of consumer contract and as such it must be in plain language which is clear and easy to understand. It must not contain any terms which could be ‘unfair'. This means, for example, that the tenancy agreement must not put either tenant or landlord in a disadvantageous position, enable one party to change terms unilaterally without a valid reason. An unfair term is not valid in law and cannot be enforced.
Therefore, it is better to seek an expert advice. Net Lawman templates does not contain any unfair term which may make the agreement invalid and unenforceable.
Enforcement of Residential Tenancy Agreement
Tenancy agreements are partly contractual, i.e. an agreement between landlord and tenant which can be enforced by a court of law. And, particularly with residential tenancies (as opposed to commercial or business tenancies), they are partly governed by statutory (Parliamentary)rules which cannot be over-ridden by the contractual common law rules.
An important point to remember is that residential tenancy agreement terms must be deemed"fair" and are governed by the Unfair Terms in Consumer Contracts Regulations 1999. An unfair term in a tenancy agreement may well reassure the landlord, or indeed the tenant, on some point, but it would be unenforceable at law.

Point to Watch for Landlords:

  1. Once a tenancy has been created it cannot be changed to another type of tenancy by or on renewal.
  2. Rent Act Tenancies can seriously damage your wealth, and perhaps your health as well!
  3. Beware when buying properties with sitting tenants. Are there any Rent Act tenants? If there are early Shorthold tenants, has a Section 20 Notice been properly served and does a proper Shortlhold agreement exist?
  4. Never, ever create a tenancy on a casual basis - always have a substantial written agreement which is properly witnessed on signing.
  5. Make sure that all occupants in your property are documented tenants, having signed an agreement. New arrivals should be put on the agreement as soon as possible.
  6. Never try to force a tenant to leave - a court possession order must always be obtained if the tenant won't leave and the landlord wishes to end a tenancy.
  7. If in doubt about the financial security of the tenant or for younger tenants always try to obtain a surety agreement (guarantee) from parents or another home-owner willing to stand surety in case of default or damage. See personal guarantee.

Always screen and verify tenants very carefully before handing over the keys to your property. Remember, you are handing over a very valuable asset when you let out your property - would a bank lend you money without doing thorough

Our Residential Tenancy Agreement
Our outline agreements, which can be used both in respect of houses and flats, are suitable for residential tenancies agreement. Our Documents are drafted by expert Solicitors and Barristers and can be customize according to the wishes of Landlord.
Our all templates are in plain English with explanatory notes.

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This article was published on 2010/09/28