Landlords Are Forgetting to Take Illegal Fees out of Their Contracts

Originally published at: Landlords Are Forgetting to Take Illegal Fees out of Their Contracts | OpenRent Landlord Hub

It’s common. There’s no shame. When it’s time to write out a new contract, most landlords and agents just change the dates and names on the old one, hit ‘send’ and wait for the tenants to sign.  Given this, isn’t it insane that some agents charge £450 for a new tenancy agreement? For printing off…

Thanks for this Sam, I need to put something in the AST about cleaning to a professional standard.

More broadly, I’ve been having some problems with editing the AST generated by Openrent. For instance I need to put in a clause saying that not only is the tenant who failed referencing supposed to pay six months in advance; they will also need to pay a second payment of six months. (It won’t revert to monthly unless they pass referencing, because the risk remains the same.) I understand standard practice in lettings is for the second payment to be payable two months prior to the second set of six months, which relates to Section 21. It would be helpful if the editing could take place in a WYSIWYG environment for simplicity - I need to remove any mention of monthly rental payment amounts.

I would not advise you to insert any clause into a tenancy agreement unless you are legally trained as it can have adverse effects. In particular, what you are trying to do will likely make the period of the tenancy 6 months, which would mean that any notice you serve will be 6 months minimum even in normal times.

I take on board what you say about the risks of altering the contract.

My issue is, having agreed with the tenant’s suggestion that they cover my risk by paying six months in advance at the start and again before the middle of the year, I can’t edit the contract to reflect that. I don’t believe this is such an uncommon clause that it shouldn’t be possible to change it - again, at my own risk.

OpenRent has updated its guidance to confirm certain parts of the contract can’t be changed. Seems silly to allow custom clauses but not make the whole thing editable. How do I make changes to the contract? – Help Centre

If you are taking lump sums you are at risk when it comes to serving s21.
You need to take five months and a month not six months. On the contract the last month payment should read as one month
When we go back to pre-pandemic legislation, if we ever do, you don’t want to not be able to serve notice because the periodic term is not compatible with the notice period of a s21

You could draft an addendum to state that 6 months rent is payable in advance and that this represents 6x1 monthly payments and at the end of this period a further advance payment of 6x1 monthly payments will be due. I have no idea whether a court would recognise this clause. My feeling is that they possibly wouldn’t. If they didn’t then they might declare the period to be 6 monthly. Worst case scenario they deem at least one of the advance payments to be an unprotected deposit and make you pay a penalty of 3x its value, although that is perhaps less likely. You should really take legal advice before doing this.