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Why a tenancy agreement is necessary


1st Jan 2015 Insurance & Legal

Why a tenancy agreement is necessary
Ensuring the provision of a tenancy agreement is vital for any landlord. It protects the property, outlines the obligations of you and your tenant, and can prevent any disputes arising in the future.
The creation of an assured shorthold tenancy (AST) is not a legal requirement in England and Wales. However it is advisable for landlords to provide their tenants with a signed, written tenancy agreement prior to their moving in date.
This written agreement, as suggested by Beresfords, an apartment letting agency, helps clarify the terms and conditions of the rental  arrangement, thereby protecting the rights and responsibilities of both  parties throughout the tenancy.    
In Scotland the situation is different. A landlord must provide a written tenancy agreement in order for the tenancy to be classed as a short assured tenancy (SAT).

The pitfalls of not getting it in writing

  • Even after a clear discussion, disputes about the terms of tenancy can still arise, so it is better to not make informal arrangements and get things in writing.
  • Once in occupation, a tenant cannot be coerced into signing an agreement that changes the terms of their tenancy.
  • The accelerated possession procedure cannot be used to evict a tenant where the landlord has failed to provide a written agreement.

The advantages of getting it in writing

  • A formal agreement protects and regulates the landlord’s position and a tenant’s use of a property.
  • Deposits must be protected under a statutory tenancy deposit scheme that clearly outlines procedures for everyone in the event of a claim made against the bond.
  • If a landlord fails to provide a written tenancy agreement, the law will require them to implement one within six months. You can save yourself the legal trouble by getting this right from the start.
  • If a tenant is entitled to welfare assistance, such as housing benefit payments, the Departement of Work and Pensions requires a tenancy agreement to process a claim. 

Lettings not needing an agreement

All tenancies should have a formal written agreement but licenses don't always need them. The following instances do not require tenancy agreements.
  • Letting a room in your house to lodgers.
  • Bed-and-breakfast accommodation.
Though a tenancy agreement isn’t required in these instances it is advisable to draw up some paper work, such as a list of house rules, to manage everyone’s expectations and responsibilities.
For all you need to create a tenancy agreement click here.