It’s common. There’s no shame. When it’s time to write out a new contract, most landlords and agents just change the dates and names on the old one, hit ‘send’ and wait for the tenants to sign.
Given this, isn’t it insane that some agents charge £450 for a new tenancy agreement? For printing off an old contract? Truly crackers. But this isn’t what this post is about.
Landlords need to be aware that clauses from their old contract may now be illegal — and that by using the same contract template as a tenancy that was originally written in 2010, you may be including dodgy clauses without even realising.
Dodgy clauses which could get you in a lot of trouble…
Clauses Landlords Are No Longer Allowed to Include in Tenancy Agreements
Here are the most common examples of clauses that still creep into tenancy agreements despite being banned by recent legislation.
A very popular clause to include requires tenants to pay for professional cleaning of the property at the end of the tenancy. But this is not allowed. If your contract has this clause in, take it out!
Tenants must return the property in as good a condition as it was when the tenancy began, excepting wear and tear. The condition of the property includes its cleanliness. But that doesn’t mean the landlord can require the tenant to pay money for professional cleaning.
If you care about your property being cleaned to a professional level when the tenants move out, the only way to ensure this is to conduct an inventory at the start of the tenancy which describes the property as ‘cleaned to a professional standard throughout’, have the tenants agree in writing that the inventory is accurate, and then conduct another inspection when they move out.
If the property is not up to that standard, then you can attempt to deduct money from their deposit to pay for cleaning, but you may not succeed if the tenant disputes this claim and the deposit adjudicators agree with them.
Late Rent Fees
Before the Tenant Fees Act, it was common for landlords to include punitive fees for tenants who pay their rent late. For example, a fine of £10 per day overdue. If this was ever a fair and enforceable clause, it certainly isn’t now. The Act has limited late rent fees to 3% annually, plus the Bank of England base rate.
In reality, given record low interest rates, this means tenants have to pay very little in the way of late fees, even if they are in many months of arrears.
Charging a small fee for the admin involved in renewing a tenancy was the done thing but five years ago. Now, it is prohibited by law. If your contract includes any renewal charge to the tenants, you had better get out the tipex.
When creating a new tenancy, landlords are not allowed to charge anything but rent in advance, a refundable holding deposit and a refundable tenancy deposit. Charging for admin, postage and time is not allowed, even if it was included in a contract you signed with the tenants when it was still legal to do so. The TFA has banned this.
Deposit Is over the Maximum Value
Rental contracts usually include the agreed deposit value on the first page. Deposits are often some multiple of the rent, so if you are not changing the rent you may not even think to touch the clause describing the deposit.
But you should. Deposits have been capped at a maximum value equal to five weeks’ of rent. That means if you took a two-month deposit in 2017 and you are renewing your contract today, you need to refund any deposit amount that is over five weeks’ rent. Landlords frequently forget about this clause, but it could put them at risk of a large fine.
Get an Automatically Up-to-Date Contract for Free
Landlords who use OpenRent can renew their tenancy for free. We give you an up-to-date contract, including all recent law changes, at no cost when you renew.
Goodbye, risk of fines and embarrassing out-of-date clauses. Hello to easy tenancy setup.