Between the 1st and 8th March of this year, Direct Line for Business carried out a survey of fifty private landlords that revealed an interesting statistic about formal tenancy agreements. Apparently, a staggering 10% of landlords who had tenants occupying their investment properties did not have such agreements in situ.
Another interesting statistic was that 58% of landlords who do not bother to use the services of a letting agent to assist in the letting out of their investment properties are actually utilizing rental contracts that they themselves have adapted rather than get a solicitor to check them. As a result, some may not be binding from a legal point of view. In fact, in the last 24 months, 13% of landlords have actually had rental contract disputes with their tenants. We are sure that you will agree this is a very high percentage and anything that can be done to reduce this figure has got to be welcomed.
It is important that a suitable, legally binding tenancy agreement is in place as this document clearly sets out the basis on which the property is being let out. This document is therefore beneficial to both the landlord and the tenant. It is also particularly useful in the event of a dispute between the parties to the agreement.
After all, a landlord has no doubt invested a substantial amount of money in setting up a rental properties business in terms of purchasing one or more properties to rent out. Whether that has been a cash purchase or by putting down a deposit and raising the balance by way of a buy-to-let mortgage(s).
So, if you are a landlord, do make sure that a suitable formal tenancy agreement is in place to help reduce the possibility of getting into a dispute with one or more of your tenants. Some disputes could become protracted and costly.