Landlords top 10 mistakes – no4

1 04 2010

This sequence of posts have proven quite popular. So today I’m bringing you mistake number 4. Hopefully these posts are being of use to some of you, it should certainly give you some ideas of things to consider, and potentially could save you from a few minor disasters. Please leave a comment with any feedback or suggestions of other topics you would like me to discuss.

Mistake number 4 – Poor Lease Preparation

It goes without saying that the lease is important. It is what binds your tenant to your property and ensures the rent is paid. This single document represents your legal protection if something goes wrong so it really is worth thinking carefully about. In spite of this however, some landlords write their own contracts to save money.

Writing your own contract can be tempting given the fees that solicitors charge, but saving money here can cost you money later. You may be able to find a standard tenancy agreement, and this is a viable option. However, standards differ a lot, and some lease contracts offer better protection than others.

Your lease must contain the rules of the relationship between you and your tenant that dictate conflict resolution, financial responsibility and terms of execution. This includes things like who is responsible for utility bills, whether pets are allowed, what the penalties for breach of the contract are etc.

If you do use a lease which has not been properly prepared you could find yourself forfeit to many of the rights you would usually have as a property owner. Further more, many standardised contracts will not take into account your own values and what you care about with regards your property.

Another critical point is that landlords are often asked for further agreements by the tenant after tenancy has begun. This is perfectly reasonable, and the landlord may well wish to accept. However, no matter how trivial it may seem, it is important to always put these agreements in writing, as if disputes happen later a verbal contract is much harder to prove, and verbal agreements can often be interpreted differently by each party.




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