Today’s world is one of accessibility. Simply type ‘tenancy agreement’ into any search engine and you’ll have a template to make your own. So why should modern landlords bother using a letting agent when the internet exists?
While it might be tempting for landlords to save money by creating do-it-yourself (DIY) tenancy agreements, there are compelling reasons why this approach is a bad option.
Here are just some of the dangers of crafting a tenancy agreement without expertise.
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Legal complexity and compliance issues
Tenancy agreements are legally binding documents that must adhere to the laws and regulations of the jurisdiction in which the property is located.
These laws can be complex and vary significantly from one place to another. A DIY approach may not take into account the specific legal requirements, leaving landlords vulnerable to potential legal disputes and financial repercussions.
Laws regarding safety, security deposits, tenant rights, eviction procedures, and fair housing practices are just a few examples of the legal aspects that must be properly addressed in a tenancy agreement. Failing to accurately include these terms could lead to serious legal problems down the line.
Related: Top 10 mistakes that landlords make and how to avoid them
Inadequate protection for landlords
Tenancy agreements are not just about outlining the rights and responsibilities of tenants; they also protect the interests of landlords.
An improperly drafted agreement might lack crucial clauses that provide landlords with necessary safeguards, such as clauses related to property maintenance, rent increases, or handling tenant violations.
A professional tenancy agreement can include provisions that empower landlords to take appropriate actions when tenants breach the terms of the agreement, without violating tenant rights or legal requirements.
DIY agreements might lack the comprehensive language needed to address various scenarios that can arise during a tenancy.
Potential for ambiguity and confusion
A poorly written tenancy agreement can lead to ambiguity and misunderstandings between landlords and tenants. Clear and precise language is essential to avoid potential disputes and confusion over responsibilities, payment schedules, and other important terms.
DIY agreements may inadvertently omit important details or use vague language, creating room for disagreements that could have been easily avoided with a professionally drafted document.
Notice periods
A ‘freestyle’ approach to establishing a tenancy could mean that you fail to get the paperwork right regarding notices, which could subsequently invalidate any notice you serve.
A letting agent will be aware of all recent rule changes to notice periods, allowing you the peace of mind of complete legal compliance.
Possible financial implications
While it might seem like a cost-saving measure in the short term, opting for a DIY tenancy agreement can have long-term financial implications.
If legal issues arise due to improperly drafted terms, landlords might face expensive legal battles, fines, or even have to compensate tenants for damages or violations. Investing in a professionally-crafted agreement from the outset can prevent these potential financial setbacks.
For more help with managing your investment, contact Ellis & Co’s dedicated lettings team
