Contractual Tenancy Agreement – Furnished House
This Contractual Tenancy Agreement – Furnished House should be used where a Landlord wishes to grant a tenancy of a furnished house in circumstances where the tenancy cannot be an assured shorthold tenancy. Usually the tenancy will have a term of 6 or 12 months.
Examples of tenancies that cannot be assured shortholds include lettings of high value properties (where the annual rent exceeds £100,000), lettings where the tenant does not occupy the property as his only or principal home (e.g. a second home) and lettings where the Landlord resides at the property.
The Tenancy Agreement complies with relevant housing legislation and takes account of the OFT’s 2005 Guidance on unfair terms in tenancy agreements.
If the Landlord requires a guarantor for the Tenant, e.g. because the Tenant does not have a satisfactory credit history or references, the Tenancy Agreement Guarantee should be used in addition.
The Tenancy Agreement sets out the main details at the beginning, being the parties’ names, the address of the property, the term and the monthly rent. An Inventory should be completed and attached to the Tenancy Agreement to record the condition of the property and the furniture and contents.
Clause 1 is the grant of the tenancy.
Clause 2 contains standard legal interpretation clauses.
Clause 3 deals with the Tenancy Deposit. Although the Tenancy Deposit Protection legislation only applies to ASTs, it is recommended that Landlords protect contractual tenancy deposits in the same way as a matter of good practice and to be prepared for a situation where a contractual tenancy becomes an AST.
The amount of the Deposit should be inserted in clause 3.1. In clause 3.4 the Landlord must specify whether the Deposit will be protected in an insurance scheme or a custodial scheme. Please see the Guidance on Tenancy Deposit Protection for Assured Shorthold Tenancies for details of the different schemes and the procedural steps the Landlord must take. Please note that this clause should not be used if the Landlord is protecting the Deposit in the Tenancy Deposit Scheme (one of the insurance schemes). That scheme has its own clause which should be substituted – please see the Prescribed Information and Clauses document on the TDS website: http://www.tds.gb.com/agents-and-landlords-documents-and-forms.html.
Clause 4 contains the Tenant’s covenants. These cover payment of rent and other outgoings (Council Tax and utilities), repair and maintenance, use, allowing the Landlord access for inspections and end-of-tenancy arrangements. Clause 4 includes covenants requiring the Tenant to observe the terms of the Landlord’s insurance policy and any title documents such as a superior lease. These covenants will only have effect if the Landlord has given the Tenant copies of the relevant documents.
Clause 5 provides for interest to be paid on overdue rent.
Clause 6 is the forfeiture clause. This allows the Landlord to forfeit (i.e. bring to an end) the tenancy if the rent is at least 21 days overdue or if there has been a substantial breach of any of the Tenant’s obligations. Landlords should note that it will still be necessary to go to court in order to obtain possession of the property.
Clause 7 contains the Landlord’s covenants. These cover quiet enjoyment (the right of the Tenant to use the property without interference) and repair.
Clause 8 is an optional break clause for each party.
Clause 9 will contain the parties’ addresses for service of documents. Section 48 of the Landlord and Tenant Act 1987 provides that rent is not lawfully due from a Tenant unless the Landlord has provided him with an address where notices are served. It is vital that the Tenant is given an up to date address for the Landlord.
Clause 10 is a jurisdiction clause.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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