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IS YOUR TENANCY AGREEMENT FAIR

Many landlords and letting agents may be using tenancy agreements which contain terms that are unfair to tenants says David Lawrenson of LettingFocus.com.

The Office of Fair Trading (OFT) often updates its guidelines for landlords and tenants covering tenancy agreements, following concerns that too many contracts contained clauses that took away a tenant's legal rights or were not written in plain English.

The detailed guidelines are contained in a huge and fairly complex document which we have summarized here.

 

THE OFT AND UNFAIR TENANCY AGREEMENTS

Some of these unfair terms are quite obvious. For example, any term which makes the tenant arrange or pay for repairs to things like heating is clearly wrong. Similarly, any term that tries to waive the normal landlord’s duty to repair - such as making sure the property has met the gas safety and safe furnishings requirements – would be unfair too. 

Another term that is clearly wrong is where it is implied a tenant should hand back a property at the end of a tenancy in a better condition than it was at the start.

This is unfair because a landlord has a duty to allow for fair wear and tear (and indeed can claim the cost as a deduction from income for tax purposes.)

Terms that allow the landlord complete freedom to stipulate the amount of the tenancy deposit they will retain at the end of the tenancy without challenge are also wrong.

At LettingFocus we check our agreements every 6 months to ensure they are fully up to date.

 

UNFAIR TENANCY AGREEMENTS

We see quite a lot of agreements where it says that the tenant should not do anything that compromises the landlord's insurance policy or the head lease.

This term is quite common but it is really only okay to include it if the tenant is given a copy of the policy and head lease so he knows what he can and can’t do.

Making up your own agreements is probably best avoided. Tessa Shepperson of website Landlordlaw.co.uk says, “Landlords need to be careful about amending their own agreements because it’s so easy to make a term invalid.” 

It’s clear that the OFT is worried that some landlords do not try to keep costs down, but are too often tempted to pass on costs to the tenant which are well above the real cost to the landlord. 

For example, most good landlords would accept that if their tenant had paid £5 in error under the correct rent, it would be unfair to charge them £50 for a letter telling them about it - when a phone call could easily rectify the situation.

 

OFT GUIDANCE ON UNFAIR TERMS IN LANDLORDS TENANCY AGREEMENTS

However, there are other occasions, where the OFT guidance goes much further. For example, one of the more surprising comments concerns what happens when a tenant wants to leave half way through a six month fixed term contract. 

In these circumstances, the OFT suggests it would be unreasonable to make the tenant pay rent until the end of the agreement if someone else acceptable to the landlord could be found to take over the tenancy.

Whilst they sweeten this by saying that the landlord could recover from the old tenant reasonable costs associated with the re-letting, many landlords would still be surprised at this.

The clear advice to all landlords and tenants is to carefully check if your agreement is still up to date.

Find out more about this by joining me at one of my one to one consultancy sessions, where I can also check whether your tenancy agreement will be compliant with the new rules.

 

ABOUT DAVID LAWRENSON AND LETTINGFOCUS

At LettingFocus.com our main work is our consultancy, in which we help organisations and public bodies with their products and services for the private rented sector.

But in addition to our work for organisations, we also offer a limited amount of unbiased consultancy advice for private landlords.

Check the links below to find out more and to JOIN our Free QUARTERLY NEWSLETTER simply send an email.

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Copyright 2011 David Lawrenson. This article must not be copied or re-used without the author and copyright owner’s prior permission. 

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