This is a question I was asked in an email recently.
The answer is that, in most cases, with a free tenancy agreement you have no guarantee of quality or the suitablity of the document for your situation.
Why ‘free’ can be dangerous
There is among some people what amounts to an obsession for getting things for free. Although I can understand this to a certain extent, I think it is a dangerous way of working.
When you rent out a property to a tenant this is a serious business. You are losing control over your property for what could be a long period of time.
The document which regulates the arrangement between you and your tenant (the tenancy agreement) is an important one and you want it to contain everything you need.
When you download something for free – in many cases you get what you pay for.
Some free agreements are very good, but if you don’t know much about landlord and tenant law you have no way of telling this.
So you need to be very careful where you download it from. If you are using one of the agreements from a reputable source such as, for example, the National Landlords Association, you should be all right. Elsewhere? Its a bit of a lottery.
There is also the question of suitability for your tenancy. Not all tenancies are the same. For example:
- Are you renting a room in a shared house?
- Are you a resident landlord or
- Renting to a limited company (as these two will not be ASTs)
- Are there any special clauses you want to incorporate such as
- a break clause
- the right to keep a pet
- rights of access for your gardener
- etc
These special needs are unlikley to be satisfied by a free agreement downloaded from the internet.
If you want a bit of guidance on the type of agreement you should use for different situations see my (free) Which Tenancy Agreement Guide.
The problems of the ‘everything for free’ mindset
If you are an ‘accidental’ landlord or just have the one property, you need to realise that renting property is now a business activity and is heavily regulated. If you don’t know what you are doing you can come a cropper.
For example:
- If you fail to protect the deposit you will be unable to use the section 21 procedure to evict your tenant and will also be vulnerable to a claim for substantial penalty payments
- If your property comes within the HMO category there is additional regulation relating to management of the property and liecensing and you can be prosecuted and fined heavily if you fail to comply.
A landlord who uses free agreements downloaded from the internet is probably also a landlord who fails to invest in any training or professional advice. Long term this can cost you dear.
Just because you think of yourself as a ‘hobby’ landlord rather than a business person, this does not mean you will be treated any differently under the law.
After all the property you rent out is someone’s home. And they are entitled to have the same rights whoever their landlord is.
It doesn’t necessarily have to be free ones that aren’t right.
When we first started in business we paid a solicitor to draw up tenancy agreements. They looked okay when we first started using them. However a few months in we found the landlordlaw website. The agreements were so much more detailed and now we use nothing else.
Thank you.