Tenancy Agreements 31 days of tips – Day 29 – preparation

This is day 29 of my 31 days of tips on tenancy agreements series. To see the rest of the series click here.

Preparing tenancy agreements

After having sourced your tenancy agreement and found your tenant, you need to get it ready for your tenant to sign.  Here are a few tips for you:

• Make sure that you have all spellings correct, ie of such things as the address of the property and the names of the landlord and tenant.

• If possible have the agreement details typed rather than handwritten.  Handwriting is often hard to read, and if it is misread this could cause confusion.

• Generally try to have the agreement looking clear and professional.  A scruffy  photocopy with scrawled handwriting will not reflect well on you as a landlord. After all this is the document which will govern how the tenancy operates, and may well one day be scrutinised by a Judge (for example if you need to evict the tenant).  Take care with it.

• You need to have two copies, one for the tenant and one for you.  Traditionally the landlord will sign one copy and the tenants will sign another, and then swap them over, so both have a copy of the agreement signed by the other.  However there is no harm in having both parties sign both copies.  You only do one copy for the tenants even if there are several of them.

• If there is more than one tenant sharing on a joint and several basis, they should all sign the same agreement.

• If there are any other documents to attach (such as an inventory, house rules, insurance policy terms, headlease etc) they should ideally be initialed and dated by both parties at the same time as the tenancy agreement is signed.

Signature

So far as signature is concerned, the first thing to say is that if at all possible you should make sure you have a tenancy agreement with all the tenants original signatures on before you let them into the property.

Faxed or scanned copies, could prove problematic, and are not recommended.  Although I understand that some landlords have done this without problems – maybe this is because they have had good tenants and the validity of the tenancy agreement has not been called into question.

Under no circumstances should you let the tenants into the property before signing the tenancy agreement.

Once they are in, they can, legally, refuse to sign anything (whatever they may have told you previously), and the only way you can get them out is via a court order for possession.

I would also recommend that, where agents are instructed, the landlord signs rather than the letting agent (unless the agent has power of attorney).  In practice it would be very difficult for a landlord to refuse to ratify an agreement signed on his behalf by his agent, however it could cause problems.

Some tenancies need to be ‘signed as a deed’.  What does that mean?  It means, basically, that the tenancy agreement should say it is signed as a deed, and the signature should be witnessed by someone independent.  This means someone other than the other party to the agreement!

As mentioned on Day 12,  because a tenancy agreement is a ‘document of title’, it needs to be signed as a deed unless the exception set out in section 54 of the Law of Property Act 1925 applies.  This section says that so long as

• the term is less than three years,
• the tenant is paying a market rent, and
• the term starts immediately,

the tenancy will be valid if there is just a signature.

So if you are arranging for the tenancy agreement to be signed by the tenants a long time before they are due to move in, or if you want to give the tenant a three year term, or if you have agreed to an exceptionally cheap rent, you will need to sign as a deed.

Stamping

A tenancy agreement is a ‘stampable document’ and previously stamp duty was payable (particularly prior to December 2003).  However now stamp duty is only payable for tenancies with a rent of over £125,000 pa. If you need any further information about this see the HM Revenue & Customs website.

Do you have any comments on this section?   Do you have any views about the legality of faxed or scanned signatures, and agents signing on their landlords behalf? Have you ever experienced any problems with tenancy agreements not being signed as a deed?

Tomorrow I will be looking at renewals.

NB Read about my tenancy agreements service here.

Related posts:

1. Tenancy agreements and Julie’s big mistake
2. Tenancy agreements – why you need to know about them
3. How to create your own tenancy agreements