What is
ARLA?
The Association of Residential Letting Agents, ARLA, is the only professional
body that is solely concerned with the self-regulation of letting agents and for
nearly 25 years has been actively promoting the highest standards across every
aspect of residential lettings and management in the Private Rented Sector.
ARLA is viewed by government, consumer groups, academia, think
tanks and the media as the leading voice in the industry. ARLA members are
seen as being at the forefront of the Private Rented Sector, ready, willing and
able to comply with existing and anticipated government legislation.
ARLA members successfully create, on average, over a
quarter of a million new tenancies a year as well as arranging the renewal or
extension of thousands more of existing tenancies every month.
Why Should A Landlord Or Tenant Seek Out An ARLA Member?
Probity and Protection - ARLA leads the industry in setting and regulating the
highest standards in the industry and demands certain levels of professionalism
and commitment to customer service from its membership.
ARLA members are required to work within a robust Code of
Practice, which covers the key stages in letting and managing a property. There
are comprehensive membership Byelaws which include compliance with such issues
as handling and accounting for Clients’ money; the mandatory ARLA Client Money
Protection Bonding Scheme; Professional Indemnity Insurance; Dealing with
Complaints and Disciplinary Procedures.
ARLA members are required to employ a minimum of at least
one member of staff, in any office, who holds a suitable industry qualification,
recognised by the Association.
ARLA keeps it members up to date with changes in legislation
and provides wide-ranging training and guidance to help members understand and
interpret all aspects of letting and managing a property.
Some Golden Rules For
Landlords And Tenants.
- Read such important documents as tenancy agreements and
terms of business carefully; never sign anything you don’t understand – ask
questions – seek advice.
- Don’t have unreasonable or unrealistic expectations. If
in doubt about what to do, or your obligations or responsibilities in any
particular circumstances that arise – communicate, seek clarification.
- Confirm important issues in writing – keep a copy.
Are There Any
Rules About What Comes With A Property If Its Fully Furnished, Furnished, Part
Furnished Or Unfurnished?
No, there are no strict rules but both expectations and reality can vary in
different areas of the country and even within different niche sectors within
the local markets.
Generally, a property offered as “fully furnished” would come with all the main
fixtures, furnishings and fittings, white goods etc., plus the standard
crockery, cutlery, glassware, pots and pans etc., that a reasonable tenant would
normally use on a day to day basis.
At the other end of the scale, an “unfurnished” property would normally be
provided only with such basics as carpets, curtains and light fittings.
Clearly, there are infinite variations between these two extremes of what might
be included. Therefore, the critical aspect, whether you are a landlord or
tenant, is to make sure that everyone clearly understands what main items are,
or are not, included before finalising the tenancy agreement.
What
About Safety Regulations For Rented Property?
There are specific legal obligations and responsibilities on a landlord with
regard to Fire safety for Furniture & Furnishings; Gas supply and appliances;
plus Electrical wiring and appliances; these are more fully explained in the
ARLA leaflet “Lets make it Safe”.
What
About Insurance?
Landlords and tenants should take care to review any
existing policies when renting or letting a property for the first time as some
standard insurance products will either not provide cover, or might place
restrictions on cover, for rented property and/or its contents.
A failure to inform your insurer that you are renting/letting
a property could invalidate any subsequent claim. It is for a landlord to insure
the building and his/her contents, fixtures and fittings.
The tenants are responsible for insuring any of their own
possessions. There are various specialist insurance products designed for
landlords and tenants and rented property: - Buildings, Contents, Legal
Expenses, Emergency Repair cover, Rental Guarantee cover etc.
[After the 14th January 2005 it will be illegal for a letting
agent (or anyone else) to advise on or sell such general insurance products
unless they are authorised by the Financial Services Authority (FSA), or,
directly regulated by a broker registered with the FSA.]
What About An
Inventory/Schedule Of Condition?
This is an absolutely essential document that provides a written benchmark,
which should be amended, updated and recreated before the beginning of each new
tenancy. A properly constructed Inventory/Schedule of Condition details the
fixtures and fittings and describes their condition and that of the property
generally. Landlord and tenant often share the costs involved in preparing and
checking the inventory; such costs should be seen as a necessary investment that
helps protect the interests of both landlord and tenant.
What Is A Tenancy Agreement?
A tenancy agreement is a legally binding contract between a landlord
and tenant that sets out both the legal and contractual responsibilities and
obligations of the two parties. It should be written in plain and intelligible
language (no unnecessary jargon!) and its terms and clauses should be fair and
balanced, taking account of the respective positions of the parties and should
not mislead about legal rights and responsibilities. Landlord and tenant should
take care to individually negotiate any particular terms or conditions that are
important to them or especially relevant to the particular let or property.
What Kind Of Tenancy
Agreement Will Be Used?
The most common form of tenancy agreement used is an “Assured Shorthold” (an
AST) under the 1988 Housing Act (amended 1996). This type of tenancy offers the
most flexibility to both landlord and tenant; has straightforward notice
procedures for bringing the tenancy to an end and a special Accelerated
Possession court procedure should tenants fail to vacate.
If certain specific conditions are met relating to the
proposed letting, a “contractual” non-housing act tenancy must be created. One
example of this would be what is commonly referred to as a Company Let where the
tenant is a bona fide registered company, another would be where the annual rent
equates to over £25,000.
Very rarely, a prospective tenant may be offered a full
“Assured” tenancy that gives very significant and potentially long-term security
of tenure to a tenant and, for which a landlord can only get possession in very
limited circumstances.
Most ARLA members will have their own “in-house”
agreements which are usually much more comprehensive than ones bought in a local
stationers or Post Office etc. Following lengthy consultation with the Office of
Fair Trading, ARLA created and now sells a model Assured Shorthold Agreement to
both members and non-members.
Joint And Several – What
Does That Mean?
Mostly, where there is to be more than one (adult) person living in the
property, the tenancy will say they are “jointly and severally” responsible.
This expression means that, jointly, the tenants are liable for the payment of
all rents and all liabilities falling upon the tenants during the tenancy, as
well as any breach of the Agreement. Individually each tenant is responsible for
payment of all rent and all liabilities falling upon the tenant, as well as any
breach of the Agreement until all payments have been made in full.
What About The Tenancy Deposit?
It is quite common for a deposit of an amount equivalent to between four to six
weeks rent to be required to be held during the tenancy against the satisfactory
performance by the tenant of all the various obligations under the tenancy
agreement – but mainly, those relating to the cleanliness and condition of the
property.
The relevant clauses in the tenancy agreement should set out who is to hold the
deposit (e.g. agent or landlord), whether interest is to be paid or not, what
the deposit can be allocated for and the end of tenancy procedures and
timescales for its refund.
The best way for a tenancy deposit (bond) to be held during the tenancy is by
the ARLA member agent as “stakeholder” between the parties (landlord and
tenant). This means that at the end of the tenancy the agent should get the
agreement of both sides before making any deductions for damage, cleaning etc.
Ideally, the ARLA agent will be signed up to the Tenancy Deposit Scheme (TDS) which means that in the event of an unresolved dispute
or stalemate over the allocation of the deposit, it can be referred to the
scheme for a prompt, independent, third party adjudication – so providing a
resolution which is fair to both landlord and tenant.
New: Download the latest
information on the
Tenancy Deposit Scheme
(105k)
What Is A “Break-Clause”?
This is a clause sometimes inserted in a fixed term tenancy, typically if the
initial fixed term is for a year or more. A break clause will usually be worded
in such a way as to allow either landlord or tenant to give two months written
notice at any stage after a particular date or period of the tenancy, thus
terminating the tenancy earlier than the end of the original fixed term.
What Happens If Either Party (Landlord Or Tenant) Unexpectedly Want To End
An Existing Tenancy Early?
There are only limited ways in which this can happen; the landlord cannot make
the tenants move out, nor can the tenants lawfully walk away from their
obligations to fulfil the contract. Either party might request of the other that
a formal “surrender” of the tenancy be allowed. It would then be up to the
parties to agree the terms and conditions of such a surrender. This might
include some financial compensation for inconvenience or costs incurred.
How Often Can The Rent Be Put Up?
In general terms, rent of an existing tenancy can only be
increased once every twelve months. Where an assured shorthold tenancy holds
over as a statutory periodic tenancy, a specific prescribed form (a section 13
notice) must be used to notify tenants of a proposed increase in the rent.
It is usual, if creating a longer fixed term tenancy at the
outset (or one with a binding option to renew), to include a clause that allows
for an increase of the rent on an annual basis, typically linked to, or as a
multiple of, something like the Retail Price Index (RPIX) or similar.
What About Rights Of Access To The Property, What Are
The Rules?
A landlord, or his agent, or someone authorised to act on his behalf has a right
to view the property to assess its condition and to carry out necessary repairs
or maintenance at reasonable times of the day. The law says that a landlord or
agent must give a tenant at least 24 hours prior notice in writing (except in an
emergency) of such a visit. Naturally, if the tenant agrees, on specific or odd
occasions to allow access without the 24 hours prior written notice, that is
acceptable. [A clause in the tenancy agreement which tries to diminish or
over-ride a tenant’s rights in this respect would be void and unenforceable.]
Repairs & Maintenance Issues
A landlord, in very general terms, has a legal responsibility to repair the
structure and exterior of the property, including drains, gutters and external
pipes; to keep in working order the installations for the supply of gas,
electricity and water; and, for the installations for the provision of space and
water heating. The landlord also has other legal responsibilities relating to
the safety of such items as gas, electricity and furnishings as well as the
general standard or fitness of the property for habitation.
A tenant has an implied covenant to act in a “tenant-like manner”. Broadly, this
means to report disrepair promptly; to take reasonable steps to ensure that
neither the tenant nor guests damage the property, its fixtures and fittings; to
do the minor day to day things any home-occupier would normally do e.g. replace
light bulbs, fit a new battery in a smoke or CO2 detector, tighten an odd screw
which has come loose on a door handle etc.; to keep the property reasonably warm
and aired to help prevent condensation or freezing of pipes; to leave the
property secure when absent from it; to keep the garden and other areas
reasonably tidy and free from rubbish.
Are Tenants Entitled To Know The Name And Address Of Their Landlord?
Yes, there are two or three bits of law covering this and it is a criminal
offence for an agent (or whoever is collecting the rent) to fail to provide,
without reasonable excuse, this information within 21 days of formal written
request by the tenants.
What About
Renewals And Extensions Of A Tenancy?
This is a very common situation and the ARLA Agent will normally negotiate
between the parties and prepare the necessary formal documentation for a
replacement tenancy or fixed term extension.
If no further fixed term is created to follow on from the
end-date of original term, and assuming notice to end the tenancy has not been
served, the tenancy can simply hold over as a “periodic tenancy” e.g. rolling on
with basically the same terms and conditions and in line with how the rent is
due to be paid. This is usually monthly.
How Is A Tenancy Terminated?
The law around ending a tenancy is relatively straightforward as long as the
right timescales and procedures are followed, along with the use of the correct
format of notice. The timescales, procedures and format will vary dependent upon
the type, and the status of the tenancy at the time you wish to end the tenancy.
Your ARLA agent will be able to provide guidance.
What Happens If The
Tenant Doesn’t Move Out After The End Of A Tenancy?
First, try to quickly establish the reasons why. However, if a tenant does not
move out after a tenancy has been lawfully terminated then the landlord can
apply to the Courts for a possession order. Under the Accelerated Possession
Procedure (which can be used where the tenancy was an Assured Shorthold) the
process is usually fairly quick and inexpensive.
Agents’ Fees And Charges
These will vary dependent upon local market conditions and the particular
services being provided by the Agent. However, whether dealing with a landlord
or a tenant, an Agent should provide clear information on what costs would be
incurred, including any potential future financial liabilities to the agent that
are reasonably foreseeable and quantifiable.
Disclaimer
The brief information contained in this leaflet is believed to be accurate,
however, it should not be relied upon in place of formal legal advice..
