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Grant the tenancy in writing

There are no hard and fast rules about how to create a tenancy.  It can be as simple as agreeing a rent and handing the keys to the tenant.  However it is best to have a written agreement as this will set out the terms agreed between the landlord and the tenant and can avoid problems at a later stage.  The lack of a written tenancy agreement will probably mean you cannot evict a defaulting tenant during any initial fixed term of an assured shorthold tenancy.

Use a good tenancy agreement

A properly drawn tenancy agreement will comprehensively set out the obligations of the parties and will deal with more than just the rent and the length of the term.   See Forms for a specimen tenancy agreement.   It is essential to make sure that the form of agreement which in the end you decide to use accurately meets your own particular requirements.  Ensure that the agreement gives you the right to require rent to be paid by standing order.

Choose your tenant carefully

Carefully selecting the people to whom you let your property is one of the best ways to avoid things going wrong later on.  How choosy you can be will of course depend on the market you are aiming at.

Take up references

Insist on references from previous landlords and the tenant’s bank.  If the tenant supplies names and addressees of referees, make a point of taking up the references. Credit searches are commercially available from companies such as Experian and Equifax and can provide a guide to a potential tenant’s credit history.

Plan in advance

It is a good idea to list in advance your criteria for vetting applicants for tenancies.  Take care however not to exclude people on the grounds of race, disability or gender because this is illegal.

Keep good records

It is a good idea to keep careful records of all information provided by a tenant in an application for a tenancy, as the Housing Act 1996 introduced a new ground (ground 17) which protects landlords against false or misleading information provided by a tenant.  This can then be used by a landlord to seek possession of a property if it is apparent that a tenant has obtained the property by providing such false or misleading information.

Guarantors

In some cases you may have concerns about a tenant’s ability to pay the rent, or you may just want some security if a tenant loses their job and cannot pay.  It is possible therefore to ask a tenant to provide a guarantor.  This person will need to sign a form in which they agree to be responsible for any rent arrears (or other sums due) if they are not paid by the tenant and to guarantee that the tenant will perform his other tenancy obligations.  A specimen form of guarantee agreement is set out in Forms.

Inventories

In order to ensure that there is no disagreement about any furniture or fixtures and fittings in the property to be let, always prepare an inventory and get the tenant to sign it.

Deposits

It is also beneficial to ask the tenant to pay a deposit at the beginning of the tenancy to cover cleaning, damage or breakages that might occur during the tenancy.  It is usual to ask for one month’s rent although you should take care not to ask for more than 7 weeks' rent as this could give rise to difficulties related to tenancies known as premium leases.  The deposit will remain the property of the tenant throughout the tenancy.  The landlord must comply with the tenancy deposit protection scheme which aims to protect tenants.  There is a dispute resolution procedure as part of the scheme.  Landlords failing to comply with the scheme suffer serious disadvantages.

Keep the grass short

Finally don't ever let the grass grow under your feet.  If the rent is not paid, chase immediately.  React immediately to any other problems with the tenant.  They will always get worse not better and the sooner problems are tackled the better.