After finding a suitable tenant, you’ll need to sign a tenancy agreement with them. Throughout the duration of this tenancy, both you and your tenant are expected to follow this agreement, so it’s crucial that both parties understand their obligations. The best way to make sure both parties understand these obligations is to have a clearly drafted tenancy agreement.
Creating a tenancy – AST
The assured shorthold tenancy agreement (AST) was introduced in 1989 and is now the default type of tenancy for residents of England and Wales. A shorthold tenancy agreement is most often used when renting out a property as an individual’s main residence.
The term joint tenancy refers to renting out a whole property on one agreement. Tenants who sign these agreements are equally responsible for paying the rent listed on the lease. Furthermore, if the property is damaged or the contract is breached by one tenant, then all tenants are liable for the loss.
It is often the custom of a landlord to let out one room at a time in a house of multiple occupations (HMO). It is the tenant’s exclusive right to occupy the room, but the landlord retains control over the communal areas. As a result, you will have easier access to the property so that you can carry out your HMO management duties. In addition, if one tenant leaves, the agreements between the tenants will not be affected if the other tenants leave.
How to rent guide
When you enter into an assured shorthold tenancy agreement, you are required to provide each tenant at the beginning of the tenancy a copy of ‘How to rent: a checklist for renting in England’. In the event that a document has been updated since then, you are required to provide an updated copy when renewing a tenancy. There are no older versions of the booklet on the gov.uk website. The document is regularly updated. Consequently, landlords may miss the chance to serve a valid document if they don’t provide a copy at the beginning of the lease.
Contractual and Statutory Periodic Tenancies
After your assured shorthold tenancy expires, your tenants are entitled to stay on a rolling periodic contract until they or you terminate the tenancy. There are two ways to create this periodic tenancy, either through the contract itself or through a statutory periodic tenancy, if there is no mention in the contract itself. These two types of periodic tenancies are treated differently by law in several ways.
Property management
It is important to decide whether you want to let out an HMO as a joint and several tenancies or on a room-by-room basis.
Either way, staying on top of your fleet is necessary. Using Lofti’s property management software you can centralise all properties and have separate units for HMO’s allowing for effective management on a room-by-room basis. Rent, maintenance and all things property management are accessible on an individual unit level for the landlord and the tenant. See how Lofti can allow you to save operational costs and admin time today.
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