The Importance of Having a Rock-Solid Tenancy Agreement

Tenancy agreements are legal contracts that stipulate the responsibilities and obligations of both the landlord and the tenant. While some landlords may think of it as a bit of an afterthought or feel a verbal agreement is enough if a disagreement arises, a poorly written agreement (or verbal one) could result in it being void, which may lead to fines or worse.

A tenancy agreement acts as a layer of protection for both the landlord and the tenants, and can save both parties a lot of money and heartache down the line. Not to mention avoiding potential penalties that can affect landlords if they don’t take proper care when managing their properties.

Reasons You Need a Tenancy Agreement

Not having a tenancy agreement is a bad idea for a number of reasons, starting with:

1. With no provision for rent in advance, tenants without a written agreement are entitled to pay rent in arrears rather than in advance.
2. Landlords won’t be able to deduct damages from the deposit.
3. Without a forfeiture clause in your agreement, you cannot evict tenants during the term of their tenancy.

Additionally, if you don’t stipulate otherwise, it will be very hard to enforce policies around pets, smoking, redecorating, subletting, etc. All of these could end up damaging your property and costing you money, or worse. This may even put you in breach of your insurance or mortgage policies.

Do You Need a Lawyer to Draft Your Tenancy Agreement?

An improperly drafted tenancy agreement may not be legally binding. For example, if it conflicts with the unfair terms rules (now part of the Consumer Rights Act 2015) where you are taking away a right a tenant would normally have – your clause needs to provide for the tenant to ask for permission to do whatever it is and say that permission will not be unreasonably refused or delayed.

Many landlords totally fail to understand this and, in so doing, invalidate sections or clauses of the tenancy agreement (in particular, pet prohibition clauses). This gives the tenant greater flexibility and control. For example, an invalidated pet clause means they can have whatever pets they want!

With that being said, you don’t have to spend a fortune getting your tenancy agreement drafted up. There are some alternatives. For example, the UK Government provides a model assured shorthold tenancy agreement, which many landlords can use as a reliable starting point. Alternatively, services like the National Residential Landlords Association (NRLA) offer customisable tenancy agreement templates online.

Related: What Is an Assured Shorthold Tenancy? [+Free Template]

A Tenancy Agreement Will Help You Stay Compliant

There is more to a tenancy agreement than just preventing tenants from doing things you don’t want. You can also put in clauses that help you comply with the law and protect you if your tenants do something that could otherwise make you vulnerable to prosecution.

An example of this is to outline exactly who is allowed to live in your property. This will protect you from potentially breaching HMO regulations or right to rent checks.

HMO Regulations

In the UK, a property is classed as a House in Multiple Occupation (HMO) if it is rented to three or more unrelated tenants who share facilities. Landlords must meet specific safety standards and, in many cases, obtain an HMO licence—especially when five or more tenants occupy the property. Councils can also impose additional licensing schemes with lower thresholds.

For example, if you have carefully limited your property to four tenants to avoid mandatory licensing, it’s vital to control who lives in the property. A clear, written tenancy agreement helps ensure tenants understand they cannot move in additional occupants without your consent. Without this protection, an extra person could push the property into licensing territory, leaving you at risk of fines and prosecution for non-compliance.

Right to Rent Check Rules

If the Home Office learns that someone is living in your property who does not have any right to rent in the UK, they will bring a prosecution or fine you, which is definitely not something you want.

The best way to protect yourself is to have all of the people entitled to occupy the property listed on the agreement.

A Tenancy Agreement Is Often Essential for Your Insurance Policies

Landlord insurance policies often have clauses, designed to minimise the risk for the insurance company. For example, the policy might become void if the property is left vacant for more than 28 days. As such, in the tenancy agreement, you can stipulate that the tenant must notify you if they’re going out of town for longer than this period so you can arrange additional cover.

If your tenant then doesn’t tell you, and something happens whilst they’re away, while your insurance won’t cover it, you will have the right to pass on the cost to your tenant.

New Legal Considerations for 2025

If you’ve been out of the game for a bit, there are some specific rules and regulations you should be aware of in 2025. 

Transition to Periodic Tenancies

With the Renters' Rights Bill expected to come into force in 2025, several changes are being made to the structure of tenancy agreements. The abolition of Section 21 'no-fault' evictions means landlords must be clearer than ever about the terms of the agreement, grounds for eviction (which will rely more heavily on Section 8), and tenant obligations. Periodic tenancies will become the default, ending the use of fixed-term ASTs in their current form. This makes it even more important that you review your agreements and make sure you’re happy with them. 

Digital Signatures and E-Signing

It's now common practice to issue and sign tenancy agreements digitally, using e-signature platforms that are legally recognised under the Electronic Communications Act 2000. This makes the process quicker, easier to track, and safer for both parties.

Tenancy Deposit Protection and Prescribed Information

Tenancy agreements should now also reference deposit details, including: 

• Which tenancy deposit scheme is being used
• When will the deposit be protected
• The statutory timeframe (30 days)
• Provide links to schemes like TDS, MyDeposits, DPS

GDPR and Tenant Data Protection Clauses

It has also become good practice to include a clause in your tenancy agreement which explains how you will handle tenant data under GDPR rules. This should cover what data you collect, how it's stored, and for how long.

Final Thoughts

In this article, we’ve explored some of the risks of either not having or having a badly drafted tenancy agreement. However, there are, of course, more nuances to it that we’ve been able to cover. The type of tenancy agreement, for example, will depend on the property type (eg, commercial, holiday lets, HMO) and the tenancy type (e.g., assured shorthold tenancy agreement). On top of this, you should ensure your tenancy is kept up to date, and regular changes to legislation mean reviewing it regularly

With upcoming legal changes like the Renters' Reform Bill, keeping your tenancy agreements and compliance paperwork up to date has never been more important. 

Landlord Studio makes it easy to manage your documents, send reminders, and store key safety certificates securely.

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