Tips On Tenancy Deposit Disputes 16: The Role Of Tenancy Agreements

Tip 16: The role of the Tenancy Agreement

Most landlords now understand that, except in very limited circumstances, a failure to send in a copy of the tenancy agreement will result in you losing your claim, and if you have any doubts, do refer back to Tip 1, however, a surprising number of people still think that sending the first page and the signature page is sufficient. It isn’t.

Although letting is one of the most heavily legislated areas in our society, beyond the very basics, the exact content of a tenancy agreement is not regulated. While sending in the first page of the agreement may be sufficient to convince the ADR department that a valid tenancy existed, all that will achieve is to persuade the scheme that this is a dispute over which they have jurisdiction.

A tenancy agreement creates a specific contractual relationship, defined by the exact wording of agreement. Failure to give the adjudicator a copy of the precise words that the tenant agreed to means that the adjudicator has no idea whether the tenant has broken the terms of the agreement.

Take a good look at the tenancy agreements you use. There is probably a clause in there stating how much the rent is and how often it should be paid, how the property is to be treated, whether smoking is permitted and even what you are legitimately allowed to keep the deposit for. The adjudicator needs to see this in order to decide the case in your favour, so make sure you send a full copy, signed by all the tenants.

Tom Derrett is the Principal of Deposit Claim, an ex-adjudicator and an expert on the Deposit Protection Schemes.

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A Landlord’s responsibility

Whether you own a single rental property or an entire portfolio, it is always your responsibility as a landlord to look after your properties and make sure that you are not liable for any harm to tenants.

Dependent on the level of property management package you currently have to look after your properties, your letting agent may look after all regulatory aspects for you. If not, you need to ensure that you are aware of all current health and safety regulations for the size of your particular property, and must make sure that your properties are compliant.

One of the most important aspects is gas safety within your property, making sure that all gas appliances are safe, minimising the risk of carbon monoxide poisoning. All residential rental properties must have an annual Gas Safety check up, aiming to spot any potential flaws in gas appliances before they occur.

In addition to gas checks, you will need to pay close attention to furniture and furnishings, electrical equipment safety and smoke detectors, ensuring that they are compliant with any lettings regulations at all times to protect your liability as a landlord.

If you are a landlord of a HMO (Houses in Multiple Occupancy), regulation may be different so it is always worth obtaining professional advice.

The ideal tenant....

I was chatting to Nigel an old mate in the pub last week about his landlording days. We started on the topic of who makes the ideal tenant?

Many landlords would say a young professional lady in her early twenties perhaps?

The reasoning behind this assertion is that being female they are bound to be tidy, home loving individuals that potter about at the weekend with their idea of a wild party being having a few girlie friends to watch the latest video of 'sex in the city'.

Well not necessarily so. Some girls party hard. They also are quite likely to be bringing their bevvy of boyfriends to stay, stopover, or quite likely stay on a semi permanent basis. Not quite subletting but near as dam it.

The other thing is that being young professionals, these tenants will 'know their rights'. If there is ever a minor problem with a noisy fridge, a light that flickers or a kitchen door that doesn't close correctly. Woe betide you as a landlord. You could well end up having the riot act read at you.

Equally, being young and ambitious and also on the hunt for Mr Right; it wont be long before they are looking to move out to make their way up the property ladder so don't expect a long let.

The perfect tenant

Actually in many ways the perfect tenant is a single bloke in his forties. Why's that?

Several reasons. Firstly, the chances are that their partying days are over. They are more likely to go down the pub for a couple of pints but not want to turn your prized buy-to-let into party central. Middle age blokes are often a solitary breed. This means chances are they are not going to have gangs of mates stopping over potentially trashing the joint. Forty something blokes could well be in the sad bachelor category. This means the chances of them 'pulling' & then moving out by the time they get to 40 is a likely as finding a poor solicitor. Blokes are more tolerant of the odd maintenance issue and are much more likely to tolerate it and if you are lucky even fix the odd minor impairment.

So all in all in my opinion and my mate Nigel, a single man in their 40s is ideal.

They might not be the most communicative of individuals or the most attractive to look at but if you want to keep your property let for the long-term with the least amount of hassle a single bloke in his forties could well be your ideal tenant.

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First time landlord mortgage 4.99%

First time landlords looking for finance will be interested in the new buy-to-let mortgage released by the Darlington BS.

The mortgage offers a 4.99% discount for just over 3 years (until 31.10.13). Unusually its available for first time landlords and has a LTV of up to 70%. The fee for this buy-to-let mortgage is also a very reasonable £574. They are also offering an incentive of a free valuation for certain selected postcode areas.

This buy-to-let mortgage comes with a 4 star emoneyfacts rating

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Selective landlord licensing

Research by ARLA shows that only 12 out of 400 local authorities have used powers granted to them under the 2004 Housing Act to create selective licensing regimes for landlords. Phew!

Even better their research shows that only 15 landlords have been prosecuted for failing to comply with their licensing requirements. ARLA argue that this proves that local authorities are not the right bodies to enforce licensing and are calling for a national scheme to regulate the Private Rental Sector.

“We again urge the Government to re-examine Selective Licensing, and as a bare minimum, strengthen the obligations of local authorities and landlords to provide adequate protection for tenants in the Private Rented Sector.”

I would argue differently. To me this shows that it is not a great priority for local authorities or their electorate to license landlords. This low priority means that if any scheme were to be introduced would end up being poorly enforced.

The reality, it would be only the law abiding landlords who would follow the rules, register and thereby bear the costs. The bad or the dissenting landlords would seek to evade payment.

All this regulation would have little real impact on improving the standards in the rental sector, but would cost a hell of a lot.

Something at the moment, landlords, the country, tenants could all do without.

Paragon to resume lending

Get the bugles out ready for the fanfare

Paragon are entering the buy-to-let lending market. No really this time they really are lending again! There have been several false dawns to date.

The fact that Paragon are back is not so fantastic in itself, lets face it their rates were never that great. No, the most significant thing is that lenders like Paragon can now once again access funds in the wholesale markets to lend to landlords. Unlike building societies Paragon and other similar types of lenders cannot use retail deposit funds from saving to use as funds to advance as buy-to-let loans. Instead their business model relies on funds from the capital markets. Once the loans are made to landlords lenders like Paragon securitise the debts and then sell them on to investment institutions allowing them to repeat the process and create more buy-to-let loans.

In this case Paragon have managed to secure a £200m mortgage warehouse facility from Macquarie Bank. Commenting on the loan Paragon statement reads:

“The facility will allow the group to recommence lending to the private rented sector, a segment of the UK housing market that has seen considerable expansion in recent years and in which the group has been a major participant. Demand from tenants for rental properties in the UK has been strong and is expected to remain buoyant going forward.”

Lets hope that other lenders such as Paragon will re-enter the buy-to-let market, increasing the number of lenders and in so doing drive down the cost of borrowing for landlords.

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