Konnexsion Property Manager

Tenancy Agreement Mistakes Made By Landlords

There are many positives about being a buy-to-let investor - but ensuring the paperwork is right every time isn’t often one of them. With ‘Right to Rent’ checks, council safety inspections, energy performance certificates - not to mention a complex stack of tax rules: the pile of regulation seems to grow month on month.Against this backdrop, it’s easy to miss how vital having a solid tenancy agreement is. Far from being a routine template, this document is central to the success of your investment – and your property business as a whole. This is because the more robust your agreement is, the less likely you are to run into misunderstandings, or worse: a difficult dispute. It also provides a framework for resolving minor issues before they morph into major problems. Most important, it helps secure your assets, reflects well on you as a professional, all while starting the landlord-tenant relationship on that all-important solid footing.So, are you getting your tenancy agreements right? To check, here’s a list of the pitfalls you should avoid:

Never sign a tenant without an agreement

There are situations where it may be tempting to bypass paperwork altogether. Take the “mates rates” scenario, for instance; where you let out the property to friends or relatives on the assumption that formalities aren’t necessary. Likewise, where a landlord is keen to start generating income and there’s a tenant lined up to move in immediately, you may wish to install them quickly and sort the paperwork later.Without an agreement, there’s much greater scope for arguments over what was and wasn’t agreed. Especially for shorthold tenancies, not having a written agreement stops you from relying on the accelerated possession procedure if a tenant refuses to vacate. Bringing the arrangement to an end can be more complicated, too. If you are letting to people you know, remember that even the closest relationships can break down – and you can never be absolutely sure that a tenant will sign anything after they are in occupation. No matter how tempting it may seem, do not hand over the keys until a tenancy agreement is signed.

Use a template from a reputable provider

It’s rarely necessary to draw up lettings agreements completely from scratch. Landlords, property managers and lawyers all rely heavily on standard forms and templates for their documents.So find an agreement, print it off, and hand it over to your tenant: what could be easier? Look a little closer, however, and you’ll find that most of these sites carry heavy disclaimers. Most are not regulated – and you can rarely be sure that these forms are up-to-date, or faultless.As a rule, if you are new to lettings or you have any concerns at all, a ready-made form is no substitute for advice from a solicitor who specialises in lettings arrangements. Your solicitor will advise you on an agreement suitable for your arrangement, and whether any particular terms will need to be changed or added.Solicitors may use templates as a starting point, but never an end product. Make sure you get legal advice to avoid sleepwalking into arrangements you didn’t intend to make.Once you become more comfortable with lettings, there are great contract solutions available from Landlord Associations. With these tools, you answer a number of questions based on your rental situation. These questions include: who is paying for the utilities, pets, and how you are going to protect your deposit. The Landlord Association will then produce a high-quality contract that will be fit for purpose. Note, however, if you are finding it difficult to answer the questions or you wish to add your own comments then you should really consider proper legal advice.

Tweaking the terms yourself is one of the biggest tenancy agreement mistakes

Even seasoned landlords can be guilty of this. Let’s say you have recently added to your existing rental property portfolio. You already have a draft tenancy agreement on file, which your solicitor drafted for another one of your properties. You decide to repurpose it, adding a few home-cooked amendments (regarding access rights or service charges, for instance).Please, please don't do it. Just because your tenant agrees to sign the agreement, doesn’t make those terms enforceable automatically. For a start, the tenancy agreement must be ‘fair’ and ‘clear.’ This includes ensuring there are no contradictory terms in the agreement. Also, a homemade clause cannot overwrite a tenant’s statutory right (for example, the right to ‘quiet enjoyment’ of the property or the obligation on the landlord to give 24 hours’ notice before entering the property).So if you do want to add a ‘special’ clause to an existing agreement, always seek legal advice.Oh, and coming back to that well-written contract you used last year. Don't use that either. Legislation changes, clauses become either irrelevant or more seriously are deemed no longer 'fair' or 'clear'. Always go back to your solicitor or reputable association for a completely new contract each time.

Forgetting about the “How to Rent” supporting documents

When starting a new tenancy arrangement, you must provide your tenants with:

•  A copy of the How to rent guide, designed to help tenants understand their rights and responsibilities. The latest copy can be found here. Current law states that with assured shorthold tenancies, failure to provide a copy of this notice can make it harder to bring the arrangements to an end once the fixed-term has expired.
• If you haven't by this stage already provided the Energy Performance Certificate you must do now. This provides information relating to your property's Energy Performance Levels
• You have a fixed number of days to protect your tenant's deposit and provide them with their 'Prescribed Information'.

If these documents change again refer back to the latest information provided by a Nationwide or Regional Landlord Association.

Failing to keep communication channels open

The tenancy agreement is basically the ‘rulebook’ that governs the relationship between you and your tenant. At the same time, communication is vital for this relationship to run smoothly. With repairs and maintenance, for instance, your tenants need an easy and reliable way to tell you if there’s a problem. You also need a way to coordinate inspections and repairs, while keeping your tenants updated.Keeping your communication channels open is key to ensuring all parties remain content.

Building Trust – While Staying in Control with help you avoid tenancy agreement mistakes

Even when you are fully aware of your obligations under the tenancy agreement, it can be easy to let important points slide. Rental increases are a good example: you intend to put an increase in place; you know you need to notify the tenant at least a month in advance – and yet, with so much else going on, you forget to issue the correct notice.Being on top of your obligations, and coming across as professional, means giving tenants the information they need to know when they need to know it. This is the recipe for a successful, long-lasting relationship. With all these plates to juggle, management platforms like Konnexsion are here to help. Konnexsion offers you a powerful management dashboard to automate tasks, set reminders, manage and audit communication channels with tenants and maintenance teams – ensuring professionalism and clear communication at all stages of a tenancy. For more tips related to tenancy agreement mistakes or on expanding your portfolio, or organisation and productivity, check out our blog, contact us, or try Konnexsion for a no obligation trial or demo.