Landlords urged to check their tenancies are ‘compliant’

Landlords are being urged to check that their tenancy agreements are legally compliant after an investigation revealed that one in 10 landlords do not have any form of legal contract with their tenants whatsoever.

The findings come from insurance firm Direct Line for Business who say that landlords may be unknowingly using tenancy agreements for tenants to sign that are not legally compliant.

Of the landlords questioned, 58% said they were using modified agreements based on an old letting agent’s agreement, while 38% used tenancy agreements from other landlords.

Landlords are using a tenancy agreement they found on the Internet


However, 20% of landlords are using a tenancy agreement they found on the Internet.
Direct Line says that from its investigation it is apparent that when landlords start out they utilise the services of letting agents and then use their original tenancy agreement as a template when renewing a tenancy.

The lack of having a legally reviewed tenancy agreement might help explain why 13% of landlords confess to having difficulties with disputes that arise from a tenant’s agreement, says the firm.
The survey also reveals that 9% of landlords admit to not telling their tenant that they were legally obliged to hold the deposit in a legally-recognised scheme and, surprisingly, 4% of landlords said they had not taken a deposit from their tenants at all.

Landlords and tenants need a contract to protect their interests


The firm’s head Nick Breton said: “Landlords and tenants need a contract to protect their interests and to help make clear what’s expected from both parties when renting property and help minimise disputes.

“If landlords use an adapted old contract it may not comply with legislation or even be relevant for the market. With the volume of disputes from tenancy agreements it’s important that a legal professional sees the contract before it is signed.”

Landlords will see tougher lending criteria for BTL mortgages


Meanwhile, the Prudential Regulation Authority, which is a branch of the Bank of England, has revealed its proposals that tougher underwriting standards be imposed on landlords with four or more properties to reduce the number of buy to let mortgages being agreed.

The idea is to reduce the number of new BTL mortgage approvals by a fifth over the next two years.
The PRA says it’s been moved to highlight its worries because of plans by lenders to boost business and they are worried that will meet their tough targets by relaxing their underwriting standards.

Among the new criteria for lenders is to see how a landlord will be able to repay a buy to let mortgage should there be a 2% rise in interest rates.


About S Thompson

Simon Thompson is Editor of Landlord News and CEO of

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