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The following information applies to landlords who are not living in the same house as their tenant.
A new letting will be either an assured tenancy or an assured shorthold tenancy.
An assured tenancy generally allows the tenant to stay for as long as he wants.
An assured shorthold tenancy is for an agreed term, generally 6 or 12 months and will allow the landlord to take the property back at the end the agreed term as required.
Whichever the tenancy, landlords can charge tenants a market rent.
There are one or two rules, to prevent overcharging, but generally the rent you agree with your tenant is the rent that he must pay.
At one time it was difficult to get your property back when you wanted to. Now it is possible to let property for the length of time, which you find convenient and be certain that you can get it back even with dispute.
This type of letting is called an assured shorthold Tenancy.
When you let on an assured shorthold tenancy, you have the right to get the property back at your desired time, your tenant also has the right during the first fixed period of the tenancy, to ask the rent assessment committee to review and determine a rent they must pay.
This is an independent statutory body and they will only set a rate if there is evidence that you are charging significantly more than other landlords in your locality.
The rent they determine will be considered a market rent.
If you let under an assured tenancy, which is not an assured shorthold tenancy, you agree the rent they will pay with your and how it is to be increased.
No one can interfere with the rent, once it has been agreed between you and your tenant – although you can change the rent if both of you agree to it.
If you do not include in the initial agreement some means of raising the rent you cannot seek to increase the rent for which there is no rent review mechanism within the fixed term period but you can still do so in some circumstances after the fixed period.
Remember though, you will always be able to increase your rent if the contract says that you can.
Getting your Property Back
You have the right to get your possession of your property back at the end of an assured shorthold tenancy.
However It is not normally possible for the landlord to get the property back until after the initial 6 months unless there has been a serious breach of the tenancy agreement, or the tenant willingly agrees to leave at the earlier date.
The tenancy can be extended at the end of the initial term either by granting a further fixed term, or allowing it to continue as a periodic tenancy for as long as you wish.
If you let an shorthold tenancy run on as a periodic tenancy you still retain the right to seek possession of the property at any time by giving the tenant a section 21 notice which is two months’ notice of your intention to take possession, and a court must grant you possession.
A full assured tenancy (i.e. one which is not a shorthold) gives the tenant more security. But you can still get the property back in certain circumstances, and the law will not protect bad tenants and the court will grant possession if it considers it reasonable to do so.
With an assured tenancy there are many restrictions on the landlord so be very careful with your agreements with the tenant if you choose this route over the assured shorthold tenency.
Finding a Suitable Tenant
You may wonder how to go about getting a suitable tenant for your property.
It may be interesting to note that there are Five main tenant types:-
Business, Professionals, Workers, Students and LHA.
It is best not to mix the groups but match them for compatibility.
The first step is to decide how much rent you are going to ask for and how long, and on what terms, you are going to offer the property for letting.
Are you going to offer an assured shorthold Tenancy or an assured tenancy?
Who is going to be responsible for those repairs which the law does not automatically make your responsibility?
Do you want to make any special rules for the property, for instance about taking in lodgers?
Local shop windows may contain advertisements from people seeking rented housing in the area. Your local authority may be able to tell you of people in need of a home. Some local authorities have lists of local landlords and are prepared to refer potential tenants on to them. If there is a university or similar large institution near you they may keep lists of landlords in this way too. Alternatively you could advertise in a newspaper.
The questions that you must ask when a potential tenant presents themselves are:
Is this person going to be able to pay the rent?
Can they present to you references from the tenant’s bank, employer, a previous landlord.
You must also consider taking a deposit.
Once you have chosen your tenant,
You must set up a proper written agreement to cover all the terms of the tenancy.
This will help prevent difficulties if they arise later, for example if there is a dispute about who is responsible for what.
It also must make provision in the agreement by containing a clause permitting the landlord possession of the property where the tenant does not pay the rent or is in breach of the agreement.
If you do not wish to go through the process of finding your own tenants, although they will charge a fee you can employ agents to do the job for you.