Checking a letting agreement

The tenancy agreement is one of the most important documents that you will sign during the renting and letting process. However, it’s surprising how few people take enough time to check contracts and ensure they know what to look out for.

The following checklist is useful for tenants who are examining the key clauses in the contract. The letting contract is most likely to be an assured shorthold tenancy agreement (AST).

Assured shorthold tenancy agreement checklist (for tenants)

The following information should be in an AST agreement. If you can’t find them, make sure you have the agreement checked by a lettings legal specialist.

• Details of the parties involved Includes the contact details of the landlord/tenant and anyone else involved in the let, such as a letting agent and/or guarantor.
• Date of the contract This is normally the start date of the tenancy. 
• Data protection Ensures a tenant’s details can be shared only with parties relevant to the let, for example an inventory clerk or utility company.
• The property Refers to the fixtures and fittings within the property (such as kitchen or a fireplace) and the outside space, and normally includes items recorded in the inventory.
• The deposit This is an essential clause which should detail how much deposit the landlord/agent will take and which tenancy deposit protection scheme is used to protect your deposit should there be a dispute.
• The rent This records how much the rent will be, when it’s due and how it is to be paid, for example by direct debit. It should also state what happens if you default on the rent and how the rent can be increased during your stay.
• Possession and notices These clauses set out the notice you have to give the landlord/agent if you want to leave the property and how the landlord can regain possession of their property.
• Tenant’s obligations This sets out everything a tenant should - or shouldn’t - do while renting the property. This would include such things as keeping it in good order, notifying the landlord/agent if there is a problem such as a leak. They can be quite extensive so make sure you read them very carefully and understand each one.
• Fair wear and tear This explains that some parts of the property may naturally deteriorate with age, such as carpets fraying, and that the tenant should not be liable for this.
• Signatures This is where you and the landlord (or letting agent) sign the agreement, which makes it binding.

Terms of business agreement between a letting agent and a landlord

Many terms of business for lettings are very long documents, typically 30 or 40 pages, and there are usually a series of costs in the agreement that can be charged while letting your property on your behalf. It is therefore essential that you check this agreement as carefully as the tenancy agreement. If you don’t, you could find yourself being charged by the letting agent for things you thought were included in their set-up, tenancy-find and/or management service.

The terms of business should be clear and written in plain English. It sets out the services that the letting agent offers, such as tenant-find, let-only, let with rent collection or full management.

As the landlord you need to ‘appoint’ the agent to act on your behalf – so make sure you agree the work that they will undertake during the let and what work you wish to do yourself. For example, you may want to handle
maintenance issues.

Either the letting agent or you as the landlord will need to ensure the property conforms to legal requirements, such as having an up-to-date gas safety certificate or meeting the Furniture and Furnishings Regulations.

Letting agent fees

Ideally the letting agent’s fees/charges should be set out in one or two pages which clearly cover everything that could be charged. It’s a good idea to look for an ‘hourly’ rate for unforeseen jobs the letting agent may do, such as going to court on your behalf if you need a tenant evicted. This usually means that the letting agent won’t spring any nasty surprise charges on you.

Liability and termination

Two other clauses to look out for will be the ‘exclusion of liability or indemnity clause’ and the ‘termination of the agreement’. The first states what the letting agent isn’t responsible for, which normally relate to errors you as the landlord may make. The second usually has a notice period for the letting agreement you have made with the agent to come to an end. This may be one or two months.

For more comprehensive checklists and questions about letting a property, buy Renting and Letting by Kate Faulkner.