Landlords! How do you deal with creating a new tenancy?

July 31, 2019

QuestionSetting up a new tenancy is an important business and you need to be sure that you get things right.

There are many things you need to do at this stage and documents you need to serve, which if you forget, could lead to penalties and prosecutions and prejudice your right to use section 21.

Here are some of the things you need to do

  • Ensure that the property is in a proper condition
  • Make sure that your tenant or tenants are suitable and that all the proper checks have been done
  • Serve all the correct documents on the tenants
  • Make sure that you have an appropriate tenancy agreement and that the tenants sign it before they are given the keys

Lets take a look at these:

Ensuring the property is in a proper condition

It is particularly important that you do this nowadays as the new Homes (Fitness for Habitation) Act 2018 gives tenants rights to bring compensation claims if it is not ‘fit for human habitation’.

We have a number of resources to help you here, all of them linked from our Property Checklist.  This is our step by step guide which also links out to other content on the site.

One of the pieces of content it links to is Dave Princep’s training seminar on preparing a property to let which should be required watching for everyone.

Making sure your tenants are suitable

This is probably the most important thing of all.  If you have good and reasonable tenants, most problems can be overcome by agreement.  If you have ‘difficult’ tenants you will have problems.

The worst situation is if you find you have rented the property to criminals (often they use ‘respectable’ people as a front, just to get a foot in the door) who will then use your property for criminal purposes, such as a cannabis factory.

Although if you make it clear at interview that you will be carrying out regular Property Inspections, this may put them off.

Your best guide here is our New Tenant Checklist which will guide you through everything that you need to do when choosing tenants, with links to content elsewhere on the site, including our detailed guide to checking and referencing.

DON’T accept tenants without proper checks because they offer large sums of money up front in cash.  This is a typical ploy of those criminal tenants.

That up front cash could end up being very expensive with a wrecked property to deal with when they move out and no way to recover your losses (as your insurers will have expected you to have done proper checks so may reject claims).

Serving all the proper documents

There is SO MUCH paperwork involved with renting property nowadays.

How to rent booklets, gas safety certificates, deposit prescribed information, EPCs, data protection notices, the list goes on and on.  Not to mention the tenancy agreement itself.

Our  New Tenancy Checklist is what you need to help you.   This recaps all the things you should have done already, and then lists all the things you need to do now.

When preparing this checklist I also did a few new forms:

  • A meter reading form (so there can be no arguments later)
  • A form on smoke and carbon monoxide alarms, and
  • The New Tenancy Receipt form – a form which could end up being really important as it is your proof (so long as you get tenants to sign it) that you have served all this stuff on them.

Tenancy Agreements

This is the paperwork everyone thinks of when you mention paperwork, and indeed it is very important.  It should be like a manual setting out all the information you and the tenant need to know about the tenancy.

Sadly many tenancy agreements are so stuffed with jargon and so confusing that most tenants can’t even read and understand them – let alone use them as a  reference document later.

At Landlord Law all our tenancies are written in a plain English style and I have tried hard to make them understandable to non lawyers while remaining legally sound.

They have also had the benefit of Landlord Law member feedback and contain many clauses suggested originally by members.

If you are not sure which agreement is suitable for you, we have a free Which Tenancy Agreement Guide here.

You then need to be really careful to ensure your tenancy agreement is signed by the tenants before they go in – as you can’t force them to sign anything once they are in the property.

In summary

Renting out a property to tenants is now beset with regulations and you need to be really careful to ensure you have done everything necessary.  Otherwise penalties can apply.

Landlord Law and the Landlord Law Checklists can be your step by step guide.

Make sure you use them!

How to rent a property to tenants and comply with all the rules at #landlordlaw

Not a Landlord Law member?  Find out more here.
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