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Article > Terms in a Residential Tenancy Agreement: Part 2

 

 

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Introduction
This is part two of a two part article that discusses terms commonly found in residential tenancy agreements. It does not seek to explain every clause or paragraph that might appear, but give an easy to digest overview of why a term may be included. We dive straight in below.

Part 1 of the article can be found HERE

Access
Tenants have the right to quiet occupation. The tenancy agreement should state that the landlord or an agent (such as a tradesman) should be allowed to enter the property if reasonable notice is given in writing and the tenant consents. It should also state that in emergencies this requirement will not apply.

The tenant must consent to access. If he does not, the landlord cannot enter under any circumstances. However, constant refusal may put a tenant in breach of contract, so it is not in the interest of the tenant to refuse. Landlords should ensure that they always keep at least one set of spare keys.

Transfer of the lease (assignment) and subletting
Most tenancy agreements would contain clauses preventing the lease being transferred to anyone else, or the tenant subletting some or all of the property to someone else. Allowing the tenant to do either reduces the control the landlord has over who lives in the property, what rights the tenants have, and how they can be removed.

Not allowing assignment may be deemed "unfair". One way round it (subjectively) could be to allow a tenant to end the tenancy if he finds a suitable replacement and if the landlord's costs are covered. The landlord can then enter into a new tenancy agreement with the new tenant. The landlord could be able to approve the new tenant, but his approval should not be withheld unreasonably.

Insurance
A tenancy agreement will usually specify that the landlord should provide building insurance and the tenant may or may not provide contents insurance for his own possessions. A landlord cannot force the tenant to insure the tenant's poessessions, nor can he specify who the insurance company should be, or what level or insurance should be taken out.

If the landlord does insure the property, the tenancy agreement may specify any prohibited activities that would invalidate the insurance. The tenant may be responsible for any insurance premiums as a result of his action - although this can be difficult to prove.

A landlord should give the tenant a copy of the insurance policy and a summary of key terms so that the tenant knows what he may or may not do under the terms of the insurance.


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Tenants' property left after the tenant has vacated
The landlord cannot (by law) dispose of any property left by the tenant after the tenant moves out. If he does, and the property has value, he may be subject to a claim for damages from the tenant. Most tenancy agreements therefore have terms that allow the landlord to deal with property left behind that allow a landlord to dispose of items with the tenant's permission (perhaps for a fee payable to the landlord), or sell them and return the proceeds to the tenant or to forward them on to the tenant (at the tenant's cost).

Landlord's address for service
The tenancy agreement has to include the address at which the landlord (or his agent) can be reached for the sake of giving notice. If it does not, then rent is not due until the address is given.

This term is particularly relevant for landlords who are resident abroad or who are owners of property in England or Wales but who live elsewhere in the UK.

It is not a legal requirement to provide the landlord's address if the property is in Scotland.

Guarantor
It is a good idea always to obtain a guarantee from a third party if you are in any doubt as to whether the tenant has the means to pay.

Parental guarantees are usual. If the tenant or guarantor is not a householder, then obtain proof of his financial substance.

A guarantor can either sign the tenancy agreement, or he can sign a separate document that brings the guarantee into the contract. A guarantor is only liable on the terms when he signs, so if the terms change (for example, the rent) he will need to sign new documentation.

A further safeguard against an absconding tenant is to obtain a parental address, even if the parent is not guaranteeing the payment. The address given when the lease is signed is by definition, an old address!

Forfeiture
A forfeiture term is essential because it allows a landlord to evict a tenant during the fixed term under specific certain circumstances (as laid out in Housing Act 1988 or the Housing (Scotland) Act 1988).

A forfeiture clause ends the tenancy agreement, but doesn't give the landlord any rights to re-enter (which can only be done by a court bailiff or a Sheriff Officer in Scotland after a possession order has been given by court). So if a tenant fails to pay rent, the tenancy may end but the tenant might stay on living at the property. To evict the tenant, a court order would need to be sought.

Forfeiture clauses are often drawn badly, rendering them "unfair" and therefore void. The circumstances under which the tenancy become forfeit, and the process that will be followed if it does need to be clear, reasonable and not contravene statute law (for example, state that the landlord has a right to re-enter).

Inventory (or schedule of condition)
Even in unfurnished properties, an inventory is usually made for the carpets, fixed installations such as sinks and baths, windows and doors, and the decor. For furnished properties, the inventory would also include items of furniture and soft furnishings such as curtains and lampshades.

The inventory is a record of state. The state of cleanliness of the property is recorded, as is every item and it's condition. It is common for the inventory to record gas, electricity and water meter readings, and also the date and result of tests on electrical items (such as a refrigerator).

The inventory prevents either the landlord or the tenant disagreeing about the original state of the property at the end of the tenancy. A landlord will usually commission an independent (and hopefully impartial) inventory clerk to make the inventory so that there are no claims that the landlord pressured the tenant into accepting it. It is a good idea to have the inventory made while the tenant is present in the property (so that he can contest any incorrect descriptions) and to take photographs of the condition of rooms and valuable items. Photographs need to be clear and include a ruler or other measure to show scale, especially of existing damage.

The inventory should be signed and dated by both the landlord and the tenant and a copy attached to the tenancy agreement.

The tenancy agreement should state that an inventory will be prepared, who will prepare it and who will bear charges relating to the preparation. The tenant could be reasonably expected to bear half the total costs (of both an inventory at check-in and at check-out), but it a term that makes the tenant bear all costs would be likely to be deemed unfair and void under the Unfair Contract Terms Regulations.

Further information and useful documents

If you require a tenancy agreement template, you may be interested in looking at our collection of assured shorthold tenancy agreements, or our residential tenancy agreement drafting service .

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