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Written tenancy essential

A written tenancy agreement is vital.  The tenancy agreement will set out the terms of the tenancy and the obligations which each party undertakes.  The lack of a written agreement will in practice make it impossible for a landlord to evict a bad tenant during the initial fixed term of the tenancy if there is one.

If rent is payable weekly, the landlord must provide a rent book.  This has to contain certain information prescribed by legislation.  Forms of rent books can be bought from stationers.

Obligations of the tenant

It is usual for the tenancy agreement to contain quite detailed obligations.  See Forms for a specimen tenancy agreement.

Obligations commonly undertaken by the tenant are:-

• To pay the rent.
• To pay for all electricity, gas etc supplied and often to pay water rates and drainage charges.
• To keep the interior in good repair.
• To decorate the interior.
• Sometimes the tenancy agreement will say that the tenant must NOT re-decorate.
• Not to sublet the property.
• To allow the Landlord to inspect the condition of the property.

It is usual for tenants to be responsible for paying council tax except where the house is in multiple occupation, where it is usually the landlord’s responsibility.  In those instances, council tax is usually factored into the rent and paid by the landlord.

Tenants  should also take responsibility for payment of other utility bills and it is always a good idea to ensure that readings are taken and agreed with the tenant in respect of gas and electricity at the commencement and at the end of a tenancy. 

Obligations of the landlord

The main obligation of the landlord is of course simply to make the property available and a typical tenancy will not impose many obligations on the landlord.  Obligations commonly imposed on the landlord are:-

• To give "quiet enjoyment".
• To insure the property.

Quiet enjoyment is a legal term for a bundle of rights which the tenant has, basically the right to live at the property undisturbed.

In residential lets for a fixed term of less than 7 years the landlord is nearly always responsible for repairs to:-

• The structure and exterior of the property (including drains, gutters and external pipes).
• The installations for the supply of water, gas and electricity and for sanitation (including basins, sinks baths and other sanitary conveniences).
• The installations for space and water heating.

These duties are imposed by section 11 of the Landlord and Tenant Act 1985.  If repairs are required to structures or appliances covered by this legislation, then the landlord must carry out the repairs within a reasonable time after the tenant has given notice of the problem.  A landlord who fails to do that exposes him/herself to a claim for damages.  This duty does not cover things which the tenant is entitled to remove from the property.

Specimen agreement

There is a specimen assured shorthold tenancy agreement in Forms.  This contains quite a large number of clauses and in many cases not all of them will be necessary.  Every landlord should use a tenancy which fits his particular requirements.  There is no "one size fits all".  Special provision, to in the specimen, are needed where the property to be let is a leasehold flat.

Bringing the tenancy agreement into force

Make two identical prints of the agreement.  Obviously the tenant should read it carefully and the terms of the document should be acceptable both to the landlord and the tenant.  Once it is agreed the usual procedure is for the landlord to sign one print (which he gives to the tenant) and at the same time the tenant signs one print and gives it to the landlord.  It is equally correct for both parties to sign both copies.  Always observe these golden rules:-

• Do not date the document until both prints have been signed.
• The commencement date for the tenancy should never be earlier than the date on the agreement.
• Never let the tenant into the property until the tenancy agreement has been signed as above, dated and the landlord has a copy of a print signed by the tenant.
• Always get the rent for at least the first month before letting the tenant into the property.  The same applies to any deposit which it to be taken.

Houses in multiple occupation (HMOs)

There are new legal requirements relating to the registration of houses in multiple occupation (HMOs).  This is very important indeed because of the sanctions for non-compliance which are draconian.  From 6 April 2006, the Housing Act 2004 brought into force a new, compulsory system for the licensing of HMOs.

Definition  The definition of an HMO is contained in section 254 of the 2004 Act. It is too complex to describe fully.  Broadly the following are likely to be HMOs:-

• An entire house or flat which is let to 3 or more tenants who form 2 or more households and who share a kitchen, bathroom or toilet.
• A house which has been converted entirely into bedsits or other non-self-contained accommodation and which is let to 3 or more tenants who form two or more households and who share kitchen, bathroom or toilet facilities.
• A converted house which contains one or more flats which are not wholly self contained (i.e. the flat does not contain within it a kitchen, bathroom and toilet) and which is occupied by 3 or more tenants who form two or more households.
• A building which is converted entirely into self-contained flats if the conversion did not meet the standards of the 1991 Building Regulations and more than one-third of the flats are let on short-term tenancies.

In order to be an HMO the property must be used as the tenants’ only or main residence and it should be used solely or mainly to house tenants. Properties let to students and migrant workers will be treated as their only or main residence.

There are two levels of licensing.

Mandatory licensing

This applies to HMOs which consist of three or more storeys and are occupied by two or more households comprising five or more people. If a property falls into this category the Landlord must apply for a licence from the local authority. In order to obtain a licence, the premises must be suitable and the landlord a fit and proper person.

Additional licensing schemes

In addition, individual local authorities have power to widen the scope of HMO licensing to cover other types of HMOs. Each local authority must make it own decision as to whether to introduce an additional licensing requirement. Before making such a scheme the local authority must:

• Identify the management problems arising from the types of HMOs in the area for which it intends to make the scheme, including the extent to which those HMOs have been managed in accordance with any approved code of practice for HMO management that is in force.
•  Consider whether there are other courses of action available to them that might provide an effective means of dealing with the issues which the scheme is intended to address and whether the scheme will significantly help them in dealing with those issues.
• Ensure that the making of a scheme is consistent with its overall housing strategy and is co-ordinated with its approach to dealing with homelessness, empty properties and anti social behaviour in the private rented sector.
• Consult on the proposed additional licensing scheme with those persons who are likely to be affected by it, including landlords, tenants and local recognised resident associations, and consider their representations.

An additional licensing scheme requires the consent of the appropriate national authority. The Secretary of State intends to extend general approval for additional licensing schemes to those authorities in England classified overall as "Excellent" or "Good" in Comprehensive Performance Assessment. In all other circumstances an individual scheme will require confirmation from the appropriate national authority.

Sanctions

These are significant:-

• Operating an HMO without obtaining the required licence is an offence and the landlord can be prosecuted. The current maximum fine for this is £20,000.
• In the case of an assured shorthold tenancy, the landlord cannot validly serve a section 21 notice to recover possession if the property is required to be licensed and is not.
• The Landlord can be required to repay the rent he has received in respect of any period where premises have been let without a licence where a licence is required.

Fees

Inevitably, landlords seeking to licence a property will have to pay a fee. The levels of fees will be set by each local authority and it is thought likely that a typical fee will be several hundred pounds. It is expected that more details information and details of the additional licensing scheme and the fees to be charged by local authorities will emerge in due course.

Identity of landlord

The landlord must give written notice to the tenant of an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant.  See Landlord and Tenant Act 1987, section 48.  This is usually done in the tenancy agreement.

Every written rent demand must specify  the name and address of the landlord.  If that address is not in England and Wales, the demand must specify an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant.

Changes in ownership

Where a property with a tenant in it changes hands, the new landlord must give the tenant written notice of the change and of his name and address (which can be his business address).

Failure to do this can result in prosecution and a fine.  See Landlord and Tenant Act 1985, section 3.

Also:-

• The old landlord can be liable for breaches of the tenancy occurring after the change of ownership and before the notice is given - so the old landlord has an interest in ensuring that notice is given.
• The tenant may continue to pay rent to the old landlord until notice is given.

Other regulatory matters

Gas and Electrical Safety - It is a legal requirement for the landlord to ensure that all gas appliances are maintained regularly and annual safety checks carried out by a CORGI qualified and registered engineer.  The landlord must keep records of the checks carried out and provide the tenant with an annual safety certificate.  He must do this either at the commencement of the tenancy or within 28 days of the annual inspection.

Electrical appliances  Also, the landlord must make sure that any electrical appliances that he supplies for the tenant’s use, such as cookers, washing machine etc are safe to use.

Furniture and Fire Safety  If a landlord supplies furniture, that furniture must meet the relevant fire safety requirements contained in the Furniture & Furnishings (Fire) (Safety) Regulations 1988.

Utility meters  Arrangements should be made for all meters to be read when the tenant takes over and again when he leaves.  This includes the water meter if there is one.

Television licence  The parties should consider who is to pay for this.  A well drawn agreement will provide for the tenant to buy a licence.  For more information see www.tvlicensing.co.uk/information/landlords.jsp