One in ten private landlords do not have a formal tenancy agreement in place with their tenants and many more could be relying on contracts that are not legally compliant.
New research by Direct Line found ten per cent have no document whatsoever, while a further 58 per cent of those who do not use a letting agent choose to rely on an updated tenancy agreement from an old agent and 20 per cent have signed a contract they found online.
Such contracts, even if they are signed in good faith by both the landlord and the tenant, may not be legally compliant.
It is not only landlords who are failing to protect themselves when letting a property, as local property specialist Leaders has also conducted research that reveals many tenants are not even aware that their deposit must be lodged with the Tenancy Deposit Protection Scheme.
Six per cent of tenants said they were unaware of this and another 12 per cent indicated they had heard of the scheme but were not sure of its importance.
Carole Charge, technical and compliance director at Leaders, says: “There are currently 143 pieces of legislation in the UK that relate to letting a property. Landlords must judge whether they are able to personally ensure they and their properties comply with each one.
“Legislation in the lettings market is designed to protect both landlords and tenants, so it is important all parties are fully aware of the many and varied regulations relating to the industry.
“Tenants should be aware that the only way to ensure their rights are being protected is to let through an experienced letting agent who is a member of a professional body such as ARLA and holds Client Money Protection. Using the services of such an agent is also the best way for landlords to guarantee they have complied with the law at every stage.”
A failure to draw up a bespoke and legally compliant tenancy agreement can leave both parties vulnerable and potentially lead to disputes between landlords and their tenants. Indeed, Direct Line found 13 per cent of landlords have experienced a dispute in the last two years as a result of the content of a rental contract.
For advice you can trust on all aspects of letting a property and to ensure you remain legally compliant at all times, contact your local Leaders branch.