Tenancy Agreements

The tenancy agreement process step by step

A tenancy agreement is a document that is rarely read closely until something goes wrong. At that point unclear terms become expensive.

Stamping a tenancy agreement is not a formality

An unstamped tenancy agreement is not admissible in evidence in court until stamp duty and a penalty have been paid. That means if a dispute arises, the party relying on the agreement has to pay the duty and penalty before it can be produced.

Stamp duty at the time the agreement is signed is far cheaper than duty plus penalty later.

Tenancy agreement terms that most often cause disputes

Based on the matters we handle, three things most often lead to disputes: who is responsible for particular repairs, in what circumstances a deposit may be withheld, and how much notice is required to end the tenancy.

All three can be settled with clear terms in the agreement, written before a problem arises rather than after.

A tenancy agreement inventory for furnished property

For property let furnished, an inventory signed by both parties is the single most useful document when a dispute about damage arises. Without one it is difficult to establish the condition of the property when the tenant moved in.

The deposit and what can actually be deducted

A tenancy deposit is not the last month’s rent. It secures against damage beyond fair wear and tear and against arrears. The distinction matters, because a tenant who treats the deposit as the final month’s rent leaves the landlord unsecured in the riskiest month.

Set out in the agreement what may be deducted and how it is calculated. Without that list, a dispute becomes a question of two memories, and two memories rarely agree.

The utility deposit is separate from the rental deposit. It covers bills unsettled at the date the tenant leaves, and should be returned once the final bills arrive, not on the day the keys come back.

An inventory that is actually useful

A useful inventory is not just a list of items. It is a list with the condition of each and dated photographs. A sofa already scratched before the tenant moved in has to be recorded as scratched, or it becomes a dispute at the end of the term.

Walk the inventory together on handover day and have both parties sign it. Ten minutes then saves weeks of argument later.

Repeat the same exercise on the day the tenant leaves. Compare against the original record, not against memory.

What your lawyer handles

• Preparing a tenancy agreement setting out the term, rent, deposit and the responsibilities of each party
• Reviewing an agreement put forward by the other side before you sign it
• Setting out terms on repairs, maintenance and permitted use of the property
• Setting out the consequences if the tenant misses rent or damages the property
• Attending to stamping of the agreement with the Inland Revenue Board
• Advising on your options where either side breaches a term

Documents you need to prepare

• Copy of the identity card of the landlord and the tenant
• Copy of the title or proof of ownership
• Details of the rent, deposit and term agreed
• An inventory of furniture and fittings if you let the property furnished

Costs people often overlook

• Legal fees for preparing the agreement
• Stamp duty based on the annual rent and the term
• Cost of copies and certification
• Service tax of 8% on legal fees

When to stop and get advice first

Frequently asked questions about tenancy agreement