5 questions to help you pick the right tenancy agreement
One key consideration for a landlord or landlady is the terms and conditions upon which they are renting out their property. What do they intend to do for their tenants? (E.g. cover any bills?) What do they expect of their tenants? (E.g. not keep pets?) Legally, what status do they want to have with the tenants? These are all questions which a tenancy agreement (the contract between landlord and tenant) is supposed to answer. Read on to find out which kind of tenancy agreement is right for you.
Question 1: Exclusive possession?
Do you intend to have the right to exercise unrestricted access to the part of the property you are renting out? Maybe you plan to enter to do a service like clearing the bins or maybe you just want to maintain control of the room? If you intend to keep possession of the property, then you should look at having a lodger agreement. This contract gives the occupier a license to occupy the property, but you remain in control of it. On the other hand, if you want the occupier to have exclusive possession of the property, you want a tenancy agreement which grants them a lease. This way, you can still enter the property but you will need to give the tenant at least 24 hours’ notice. The most common type of tenancy in England is the assured shorthold tenancy (AST).
Question 2: Shared facilities?
Will the tenant be sharing the property or any facilities on the property with other tenants? If there are shared facilities such as a communal bathroom, toilet, kitchen or living room, then your tenancy agreement needs to address how they are to be used. Where there are common areas in a property, tenants may be restricted from using these spaces in a way that negatively impacts other tenants or may be responsible for their upkeep. Look into a tenancy agreement for a bedsit. On the other hand, if your tenant (and their direct family members) will live in the building alone, then look into a tenancy agreement for a sole occupancy.
Question 3: House in multiple occupation?
How many people will the tenant be sharing the property with? This is an important question because if there are at least 3 people living in one property who make up more than one household, then the property is legally classified as a House in multiple occupation (HMO). The landlord of an HMO is under certain additional responsibilities, and you want your tenancy agreement to explain them. On the other hand, if your property doesn’t meet the requirements to be an HMO but will have more than one tenant, you should look into a tenancy agreement for a bedsit.
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Question 4: Live-in landlord?
Will the tenant be sharing the property with you? If yes, then you will be a live-in landlord (aka resident landlord) and your tenant will have the legal status of excluded occupier. Depending on whether or not your tenant will have exclusive possession of the part of the property they are renting, you can choose to sublet the property or sign a lodger license agreement. Your obligations if you decide on the latter option are discussed here. On the other hand, if you will not be a live-in landlord, then you should look into granting an assured shorthold tenancy.
Question 5: Student tenants?
Are the tenants going to be enrolled in full-time education? If yes, then your tenancy agreement should cater to their student status for several reasons, such as the fact they will almost certainly want a lease that runs in sync with the academic year rather than from January to December. A good student tenancy agreement will therefore reflect the unique needs of students and even impose on the tenants the duty to restrain from activities which may harm other tenants’ studies. On the other hand, if your tenants are not students, then you can start looking into a regular AST.
From looking for the right tenant to making a property safe, creating a tenancy agreement is only one of several responsibilities of a landlord. Legislate is a contracting platform where you can create easy-to-understand and legally valid agreements on your own terms. You can read how to create your first Legislate agreements in our tutorial and watch a short demo. If you would like to try Legislate, please book an introductory call.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.