How do you read a tenancy agreement? Fixed term and break clause, deposit, stamping and Form CR109
Check five things before signing a tenancy agreement: the term and how it can be ended early, the deposit and rent in advance, what the rent includes, who is responsible for repairs, and the stamp duty and Form CR109 after signing. Write any verbal promises into the agreement so that you can rely on them later.
Term: fixed term and break clause
The fixed term is the part of a tenancy that neither side can end early. The break period follows, when either side can end the tenancy by giving the notice the agreement requires. Residential tenancies commonly run for “one year fixed and one year with a break clause”, but the actual arrangement is for the two sides to agree and is as the tenancy agreement states.
Note the length of the notice period and the earliest date on which notice can be given. Some agreements allow notice only after the fixed term has ended, while others allow it to be given in advance during the fixed term.
Deposit, rent in advance and other charges
The common “two months' deposit and one month in advance” means paying a deposit of two months' rent and one month's rent in advance at the start of the tenancy. The agreement should state when deductions can be made from the deposit, and how many days after the tenancy ends it must be returned.
Ask whether the rent includes the management fee, rates and government rent. Water, electricity, gas and internet charges are generally paid by the tenant.
- Pay everything by bank transfer or cheque, and keep the receipts.
- Confirm that the payee is the landlord or someone the landlord has authorised in writing.
- Confirm the amount of the agent's commission when you sign the estate agency agreement.
Repairs and the condition at handover
The usual practice is that the landlord repairs the structure and main installations, such as the external walls, the pipes and any appliances the landlord provides, and the tenant is responsible for wear caused by everyday use. The agreement should list the furniture and appliances the landlord provides.
At handover, photograph the condition of the walls, floors, doors, windows and appliances, and have both sides confirm the record. It can prevent a dispute over the deposit when the tenancy ends.
After signing: stamping and Form CR109
A tenancy agreement must be stamped within the time limit after it is signed. The landlord of a residential tenancy should also submit Form CR109 (Notice of New Letting or Renewal Agreement) to the Rating and Valuation Department within one month. A landlord who has not submitted it cannot take legal action to recover unpaid rent from the tenant.
Common questions
Can I leave early during the fixed term?
Unless the tenancy agreement provides otherwise or the landlord agrees, the tenancy cannot be ended by one side during the fixed term. A tenant who moves out early generally remains liable for the rent for the rest of the fixed term, or pays compensation as the two sides agree.
How do I confirm that the other party is the owner before signing?
You can carry out a land search at the Land Registry and check that the name of the registered owner matches the identity document of the person signing. If someone else signs on the owner's behalf, ask to see the owner's written authorisation.
When is the deposit returned?
It is returned within the time the tenancy agreement states, generally a set period after the tenant hands back the flat and settles all charges. The landlord may deduct unpaid rent and compensation for damage caused by the tenant, as the agreement provides.