New research by Direct Line for Business reveals that one in ten private landlords has no formal tenancy agreement in place with their tenants.

Even where contracts are in place, landlords may unwittingly be asking tenants to sign documents that are not legally compliant. Of the landlords who don’t use a letting agent, 58 per cent used adapted tenancy agreements from either old agent contracts or other landlords (38 per cent) or an updated template they found online (20 per cent).

Direct Line said that it appears that some landlords employ letting agents when they first rent out the property, then use the old contract template when agreeing a direct rental with new tenants or upon renewal with their existing tenants. The lack of professionally reviewed tenancy agreements may explain why more than one in eight (13 per cent) landlords have experienced disputes specifically arising from tenants’ rental contracts in the last two years.

Also concerning is that nine per cent of landlords have not informed their tenants that their deposit is held in a government-backed tenancy deposit protection scheme (TDP).

Nick Breton (left), Head of Direct Line for Business said, “Tenants and landlords need a contract in place to protect both their interests. Contracts, deposits and deposit protection all help to make clear what is expected from each party when renting a property, and which can help minimise disputes where possible.  If an old contract is adapted it may not comply with new legislation or be relevant for the current market. Given the volume of disputes arising from tenancy agreements it’s important to get the contract seen by a legal professional before it’s signed.”