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Assured Shorthold Tenancy Agreements – why are so many poorly drafted?

Chris Sykes looks at common problems with the ASTs which come across his desk.

I often have draft ASTs come across my desk, mainly from clients or sometimes from agents, asking me to have a quick look at them. It is surprising how many of these contain clauses which are either poorly drafted or contain potential pitfalls for the landlord even though they are supposedly ‘standard’ precedents or have been drafted by a solicitor.

Here are some common ones which are bug-bears of mine:-

  • A clause which permits the tenant to assign or further sub-let. Why would a landlord want to allow their property to be rented to or occupied by someone who was not an original tenant or occupier? When I ask agents why they have such wording in their standard AST they usually say “well it was drafted by a solicitor”. I point out to them that they could have an extremely unhappy landlord who finds themselves with another tenant imposed on them. Even though there may be a proviso which makes the right subject to obtaining the landlord’s consent, the landlord could still be put in the position where consent could be difficult to refuse and with the possibility of a claim for unreasonably refusing consent. From a landlord’s point of view it is clearly better to have complete control over tenants and occupiers. If there is a situation where a tenant requests a change, for example where there are joint tenants who are unrelated and one of the sharers wishes to leave, then the landlord has complete discretion.
  • Break Clauses which are ambiguous or not strict enough. Break clauses for one or both parties are a fairly common occurrence in longer term ASTs but on a number of occasions I have seen that despite the importance of such clauses I guess for the sake of expediency, agents sometimes try to cobble together the wording themselves. This is not advisable. Break clauses and their interpretation have been the subject of enormous judicial scrutiny and they are often a trap for the unwary. The timing of the exercise of a break clause and the manner in which it is exercised should be precise and clear. In the case of the exercise of a break by the tenant, one would expect this to be conditional upon them having paid the rent up to the date of expiry and giving vacant possession. 
  • Not taking into account the terms of the landlord’s own lease. If the property is a flat any further letting needs to be in accordance with the terms of the headlease and sometimes the consent of the freeholder is required, particularly in more upmarket buildings. It is common that no account is taken of the obligations under the headlease the tenant should covenant to observe the covenants under the headlease other than to the payment of rent and service charge. As for obtaining the freeholder’s consent where necessary, sometimes this is observed in the breach but that is another story.
  • Permitting pets to be kept at the property. Even though I am an animal lover I would caution a landlord in giving a broad permission for keeping pets, even if subject to obtaining their consent. Pets can cause considerable damage and as in the case of assignment and sub-letting, it is best that there is a complete prohibition unless permission is negotiated specifically with the tenant before the agreement is entered into. Otherwise the landlord can exercise their discretion should they wish to agree to a later request.

The most important commercial aspect of a residential letting from the landlord’s perspective is of course the choice of tenant. The administrative formalities, such as the terms of the agreement, are also important. It is tempting for agents just to pull a precedent off the computer but sometimes these precedents are not in themselves properly drafted, they need to be tailored properly to the specific circumstances for letting. If you are an agent why not get your precedent agreement checked by a specialist solicitor? If you are a landlord presented with an AST to sign it is also worth your while getting your solicitor to ‘cast their eye’ over it.

Christopher Sykes
August 2016