Category: Updates

Creating a Residential Tenancy – Getting the paperwork right!

12th April 2021

When creating a residential tenancy (these days called an Assured Shorthold Tenancy (AST)) it is imperative that all of the paperwork is in order to avoid creating a tenancy with greater security of tenure than intended. In addition to the requirements listed in our article ‘Are your let properties up to standard?’ there are additional items that need consideration when creating a tenancy.

Written tenancy agreement

The tenant should be provided with a tenancy agreement encompassing all agreed terms, which should also to prevent delays to the landlord obtaining vacant possession of the property should the eviction process need to be actioned. Over time circumstances change and unexpected situations arise so the AST should ideally be prepared by a professional in the first instance to ensure all bases are covered.

Tenancy Deposits

The Housing Act 2004 requires all tenancy deposits to be held in a government backed Tenancy Deposit Scheme to ensure that the monies held are safe (from unscrupulous landlords) and disputes are dealt with fairly.

Once payment of the agreed deposit is made it must be transferred to or registered with a Tenancy Deposit Protection Scheme within 30 days. The landlord must provide the tenant with a copy of the scheme’s prescribed information, and the certificate confirming that the deposit has been registered with one of the available schemes.

It should also be noted that the Tenant Fees Act 2019 introduced a cap on tenancy deposits. This means for tenancies where the annual rent is less than £50,000, the maximum deposit that a landlord can hold is the equivalent of five weeks rent.

How to Rent Guide

The government guide was written to ensure both landlords and tenants understand the rights and responsibilities each party have in their tenancy. A copy of this guide should be provided by the landlord to the tenant prior to commencement of the tenancy.

Agricultural worker?

If certain conditions are met, agricultural workers can automatically be entitled to greater security of tenure. Whilst a standard AST can be used, it should be pre-empted by what is known as a Form 9 Notice. This will prevent an assured agricultural occupancy being created, and in doing so will remove the tenant’s potential right to lifetime security of tenure.

Right to rent checks

Since 1st February 2016, it has been a legal requirement for landlords to ensure that prospective tenants have the right to reside in the UK. Acceptable documentation, such as a passport, must be obtained from the tenant, and the check evidenced and recorded. A new online system was launched on the Home Office website in November 2020 to provide a streamlined system for carrying out the necessary checks remotely.