Do I need a tenancy agreement if I’m renting my property to my cousin?

Family members can make great tenants. As they already have a relationship with you, you should be able to rely on them to pay rent on time and take care of the property – two significant obligations that make or break tenancies.

An existing relationship is the reason some landlords don’t treat family members or friends in the way they would a stranger when it comes to renting their properties. They rely on assumptions or verbal promises that responsibilities will be met, because there is trust already in place. But this can be dangerous.

The risk of not properly agreeing terms at the outset is that there are misunderstandings about the arrangement and/or one of the parties takes advantage of the lack of formality. This can happen in a family situation as well as in others (perhaps even more so). And the best way of setting the tenancy up to succeed is to put in place a well-designed legal document so that both the landlord and tenant understand and accept what is expected of them.

As a minimum, a tenancy agreement should set out:

• The length of the tenancy – when it starts and when and how it can end
• Rent – how much and when it’s payable
• Responsibilities – those that fall to the landlord and those for the tenant
• Rules – any particular requirements about the use of the property

The benefit of working through this before the tenancy begins is that there is clarity on what the tenancy will look like and how the landlord and tenant should each contribute towards its smooth running. This should minimise the potential for expectations to be unmet and for disagreements. Both the landlord and tenant should see a tenancy agreement as a form of protection because duties and responsibilities during the tenancy will lie with both.

Perhaps the idea of asking a cousin to sign a tenancy agreement is uncomfortable. It may feel at odds with the relaxed, friendly relationship you enjoy. However, having seen the fallout from situations in which parties have avoided the more difficult conversations, we would always advise biting the bullet. Being upfront from the start should stand you in great stead.

For advice about putting a tenancy agreement in place, or to speak to us about any other aspect of the landlord and tenant relationship, contact our team on info@bsandi.co.uk or call us on 01264 353411.