There are a lot of things that you have to include in your Rent to Rent contracts, but these 3 specific things is what you really need to pin down with the landlord. It’s always recommended to consult your solicitor or lawyer when it comes to contracts. You should consider this as part of your start-up legal fees. If you are interested in downloading our Rent to Rent contract templates, you are welcome to grab your bundle here.
But there are 3 things that your Rent to Rent contract has to include in order to ensure that the agreement is viable long term:
1. You need to agree on a set amount of rent.
That sounds very logical, but I have seen very often that people set a fixed amount for the first year with the option of renegotiating or having the rent increased, but with no set amount guiding these new terms. What if the landlord suddenly wants to double the rent? So you need to be very specific when it comes to the rent amounts as well as any possible rent increases. You can also explicitly state in your contract that there will be no increases within a set amount of years. When landlords insist on an increase I recommend calculating this on 3% (which is a fairly standard inflation percentage).
2. You need a clause clearly stating that the owner is responsible for the insurance, mortgage and any other leases they have on the property.
In order for the landlord to accurately and fully take on the above mentioned responsibilities, you’ll need to be very clear on what you will be doing with the property; will you be HMO’s or Serviced Accommodation? How many tenants will be living on the property? Are there going to be locks on the bedroom doors? Any changes you are planning to make needs to be discussed with the landlord in order for him to ensure that his insurance, mortgage etc. can be updated accordingly.
Want to find out what the other MUST is? Then watch our short video here.
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