Small Landlord’s Solicitor Checklist Before Exchanging a Residential Tenancy Agreement

Solicitor Pre-Exchange Checklist for AST Tenancies

A solicitor’s pre-exchange checklist for a residential tenancy is the disciplined sequence of checks and documents that must be true before a landlord signs and dates the agreement. In practice, “exchange” is shorthand for the legal act of execution and delivery, and the default here is an assured shorthold tenancy in England. The payoff is simple: a clean file gives close certainty, preserves possession routes, and prevents penalties, insurance issues, and lender or superior lease breaches.

Focus the file on risks that matter

The goal is to remove defects that undermine enforceability or cash flow. Every item in the process should tie to a real risk: blocked possession routes, unenforceable covenants, jeopardized insurance, unlawful fees, or breaches of lender and head-lease conditions. If a step does not address one of those, question why it is in the pack. This mindset trims noise while maximizing protection.

Stakeholders and what they need from your file

Each party has incentives you can meet through a clean pre-exchange process.

Landlord outcome: Stable income, enforceable covenants, and credible exit options via valid notices and possession routes.
Tenant fairness: Statutory security of tenure, consumer-friendly terms, and prompt repairs supported by clear access provisions.
Letting agent discipline: Fee continuity with compliance under the Tenant Fees Act 2019, consumer law, and AML where applicable.
Lender comfort: No unlawful subletting and insurance maintained; breach risks addressed via consent and aligned clauses.
Superior landlord: Consent and notice obligations satisfied so building insurance and user restrictions are respected.
Insurer validity: Accurate risk disclosures, occupancy type, and safety evidence to avoid declined claims.
Local authority: Licensing, safety standards, and prohibited payment rules followed to avert enforcement and rent repayment orders.

Jurisdiction changes that reshape your checklist

The core steps are universal, but the labels, timelines, and documents vary by jurisdiction. Therefore, you must adapt the pack to the place.

England AST status: The assured shorthold tenancy regime continues; track the Renters Reform Bill, but operate on current law until commencement dates apply.
Wales contracts: Renting Homes (Wales) Act 2016 creates standard occupation contracts and requires a written statement within 14 days, plus fitness duties.
Scotland open-ended: Private Residential Tenancies are open-ended by default, with different notice, rent, and deposit caps. Do not reuse AST templates.
United States snapshot: State rules drive deposits, disclosures, screening under Fair Housing and the FCRA, and execution formalities. There is no “exchange” practice.

Run kill tests before you spend

Do these tests up front to avoid sunk costs on a letting that cannot lawfully complete.

Title and consent: Read the HM Land Registry title, the superior lease for underletting and user restrictions, and lender conditions permitting assured tenancies; obtain required consents or give notices and confirm relevant easements and access rights.
Licensing position: Test for mandatory HMO and additional or selective licensing locally to avoid civil penalties, rent repayment orders, and barred possession routes. For HMOs, see the HMO planning and licensing checklist.
Energy compliance: Confirm a valid EPC at E or better is on file before marketing and service to the tenant.
Safety readiness: Evidence gas, electrical, and alarm compliance before occupation, with access scheduled for remedials where needed.
Right to Rent: Verify identity and immigration status using a compliant route before occupation.

Mechanics and flow of funds that prevent disputes

Money control points reduce arguments and keep execution clean.

Holding deposit: Cap at one week’s rent, set a deadline for agreement in writing, and if retaining, issue reasons consistent with the Tenant Fees Act.
Tenancy deposit: Cap at five weeks’ rent below £50,000 annual rent and six weeks otherwise; protect in an approved scheme and serve prescribed information within 30 days.
Completion funds: Make key release and dating conditional on cleared first rent and deposit in a segregated client account.
Non-resident landlord: If the landlord is non-UK resident and an agent collects rent, withhold 20 percent unless HMRC gross payment approval is in place.

Document pack and execution sequence that closes safely

Assemble a pack that aligns legal obligations, lender and head-lease conditions, and insurer requirements.

Tenancy agreement: Use a current AST tailored to the property and parties; address pets, subletting and sharing, smoking, utilities, data, access, and alignment with lender and head-lease terms.
Deposit information: Include scheme certificate, scheme terms, and landlord or agent details.
Statutory deliverables: Serve the latest How to Rent guide, a valid EPC, Gas Safety Record before occupation with annual renewals, EICR before occupation with remedials in 28 days or sooner if specified, smoke and CO alarms tested on day one, compliant Right to Rent recordkeeping, and a proportional Legionella assessment note.
Ancillary evidence: Provide an inventory with timestamped photos and meter readings, guarantor deed with indemnity executed as a deed, privacy notice, any HMO or selective licence evidence, insurance endorsements, and lender or superior landlord consents and notices.

Execution order you can audit

A consistent order prevents gaps that block possession or insurance.

Agree heads: Open a compliance checklist that maps each risk and document.
Take holding deposit: Stay within TFA limits and issue a compliant receipt.
Complete referencing: If buying rent guarantee insurance, confirm underwriting criteria before issuing the tenancy.
Serve the pack: Circulate statutory documents and confirm receipt in writing.
Execute and date: Sign in counterparts and date only upon cleared funds confirmation.
Release keys: Release only after funds clear, documents are served, and safety checks pass.
Protect deposit: Protect and serve prescribed information within 30 days and diarise safety renewals.

Drafting choices that avoid later disputes

Good drafting does the heavy lifting. Keep terms clear, consistent, and aligned with external obligations.

Parties and liability: Use correct legal names and service addresses; for companies, include registered number and office; state joint and several liability.
Premises clarity: Define inclusions and shared facilities and attach a plan for flats.
Term and exits: Align with lender or head-lease constraints and any RGI requirements; use a landlord break only if there is a clear business case.
Payments and TFA: Specify rent, method, and what counts as “rent”; confine charges to permitted categories.
Utilities and council tax: Allocate responsibilities clearly; for HMOs, define inclusions and caps; note prepayment meters and top-up process.
Repairs and access: Mirror section 11 Landlord and Tenant Act 1985; set inspection and works access with notice and define emergency access.
Sharing and platforms: Prohibit subletting and short-term platform use without consent and align with the head lease.
Pets and fairness: Avoid separate “pet fees”; if consent is given, adjust rent if appropriate within market norms.
Guarantor enforceability: Cover all tenant covenants with indemnity language; execute as a deed with witnessing and avoid undue influence; reconfirm after material variations.
Notices and service: Permit email with consent; otherwise set postal addresses, deemed service rules, and align possession notices with statute.
Data protection: Refer to the privacy notice and define the lawful basis for referencing and credit checks.

Compliance checkpoints you can tick and prove

Program renewals and keep proofs. The ability to evidence compliance is as important as compliance itself.

Right to Rent: Check all adult occupiers via the correct route and keep records for at least one year after the tenancy ends.
Electrical and gas safety: Provide EICR and Gas Safety Records on time and store remedial evidence.
Alarm testing: Test on day one and document in the check-in report signed by the tenant.
Deposit protection: Protect and serve prescribed information in 30 days; reconcile certificates to cash received.
Prohibited payments: Demand only permitted payments and keep receipts and reasons for any deductions.
Consumer law and ads: Keep descriptions accurate and disclose material information; avoid unfair terms.
Data and AML: Register with the ICO if required, maintain records of processing, and carry AML checks for high-value lets.

Economics, tax, and insurance that change outcomes

Small deviations at setup compound into material results during the term.

Landlord costs: Budget for drafting, inventory, compliance certificates, licensing, and agent commission; residential rent is VAT-exempt though agent fees may carry VAT.
Tenant fee limits: The TFA allows only permitted payments including rent, capped deposits, capped holding deposits, utilities or council tax where contracted, capped default interest, actual cost for lost keys, and capped variation or assignment fees.
Numerical example: At £1,500 monthly rent, weekly rent is £346.15, the holding deposit cap is £346.15, and the tenancy deposit cap is £1,730.75. If the landlord is non-resident and there is no gross approval, an agent withholds £300 per month under NRL rules.
Insurance conditions: Rent guarantee insurance often requires AST status, minimum referencing, deposit protection, and service of statutory documents before occupation; map the policy schedule to your file.
Tax pointers: Individuals receive mortgage interest relief via a basic rate tax credit and may consider the property allowance; companies should watch corporate interest restrictions in larger structures.

Accounting and reporting discipline

Individuals typically use cash or accrual basis; corporate SPVs use UK GAAP or IFRS. Lenders may require rent roll and arrears reporting. If held in a private credit structure, check consolidation triggers early for lender comfort. If you consider a SPV, ensure lender and insurance terms allow it.

Risk controls, edge cases, and enforcement guardrails

When something slips, act quickly and lawfully to protect outcomes.

Deposit defects: Courts award 1-3 times the deposit and certain possession routes are barred until cured; usually you must return funds and serve correct information.
Gas safety sequencing: Serve the Gas Safety Record before occupation; get the order wrong and a key possession route is at risk.
Licensing gaps: Do not let without the required licence or an acceptable interim position such as a submitted application with planning checked.
Lawful enforcement only: Never change locks or deny access without a court order; bring enforcement counsel in early on difficult cases.
Fair screening: Use criteria-based referencing consistent with Equality Act principles; in the U.S., comply with Fair Housing and local protected classes.
Guarantor fragility: Keep execution separate and witnessed; reconfirm after material variations.
Rent-to-rent: Proceed only with strong head-lease covenants, security, and control over subletting, or the downside risk can dominate.

Alternatives and classifications to consider

Use the right structure for the occupancy pattern to avoid misclassification and enforcement problems.

Licence to occupy: Suitable for lodgers or genuine service occupancy; exclusive possession for rent is likely to be a tenancy regardless of labels.
Company let: Not an AST; some protections do not apply, but consumer law may still bite where individuals occupy; lenders and insurers often treat these differently.
Holiday letting: Different planning, lending, head-lease, and licensing issues, with higher operating intensity.
Devolved regimes: Use the PRT in Scotland and the written statement in Wales; timelines and deposit caps differ.

Implementation timeline and responsibilities

Assign owners and deadlines so nothing slips between the cracks.

Pre-marketing: Confirm title, consents, licensing, EPC, insurance; order safety inspections and works; draft tenancy and privacy documents; configure NRL if applicable.
Offer stage: Issue heads, collect holding deposit, start referencing and Right to Rent checks, and set the deadline for agreement.
Pre-exchange checks: Verify EPC, gas, EICR, alarms, How to Rent, licence evidence, consents, and insurer confirmations; finalize tenancy and ancillaries.
Execution: Sign in counterparts; date and release keys only on cleared funds and confirmed service of statutory documents.
Post-completion: Protect deposit and serve prescribed information within 30 days; diarise safety renewals; get the inventory signed; register with the ICO if needed; notify utilities and council tax.

File architecture and evidence standards that stand up

A single, auditable file reduces dispute time and increases possession success.

Foldering: Keep one tenancy file with subfolders for title or consents, licensing or planning, safety (EPC, gas, EICR, alarms), Tenant Fees Act items, Right to Rent, tenancy or guarantor, deposit protection, insurance, data protection, inventory, and service proofs. Include any easements and access rights that affect occupancy.
Immutable evidence: Store immutable PDFs and timestamped photos; record service date and method for each prescribed document and retain consent for electronic service.
Compliance dashboard: Maintain a green or amber or red summary with actions, owners, and deadlines.

Wales and Scotland adjustments that avoid missteps

Use local forms and timelines to preserve rights and compliance.

Wales specifics: Serve the prescribed written statement within 14 days; meet Fitness for Human Habitation standards; apply Wales-specific deposit protection timelines and notices; note retaliatory eviction protections.
Scotland specifics: Use the Model PRT with open-ended term; rent increases via notice with adjudication rights; deposit cap at two months; protect within 30 working days; meet the Repairing Standard with interlinked alarms and CO detectors.

United States cross-reference for investors

For U.S. assets, emphasize state statutes, fair-screening rules, and disclosure timing rather than “exchange.”

Screening discipline: Criteria-based screening, consistent application, and FCRA adverse action notices when declining based on consumer reports.
Deposits and returns: State caps, itemized deductions, timelines, and in some jurisdictions, interest on deposits.
Disclosures: Federal lead-based paint for pre-1978 units, plus state or city mold, bedbug, and flood disclosures where applicable.
Habitability: Implied warranty of habitability, repair-and-deduct in some states, and city rental registrations or inspections.

Common pitfalls and quick corrective actions

Most failures trace to sequencing and missing paperwork. Fix the root cause, not just the symptom.

Wrong How to Rent version: Confirm the publication date at execution; if a new version appears before occupation, re-serve electronically with consent.
Occupation before compliance: Do not release keys without EICR, Gas Safety Record, and day-one alarm testing evidenced.
Late deposit protection: Centralize deposit flows through the agent’s scheme; if late, return the deposit and correct before relying on certain possession routes.
Guarantor execution errors: Avoid signing in the tenant’s presence; arrange separate witnessed signing with ID checks and permit a cooling-off period.
RGI conditions missed: Reconcile the policy schedule against the file before inception to preserve claim validity.

Fresh operational angle: automate gating and audit trail

Beyond static checklists, introduce automated “conditions to key release” and a portfolio-level dashboard. Use digital ID verification for Right to Rent, automated EPC and gas or EICR expiry alerts, and a rules engine that blocks dating if mandatory documents or consents are missing. Track a “first-time-right rate” for new tenancies and a “possession-readiness score” that flags files with missing statutory service proofs. These low-cost controls generate outsized savings in avoided disputes and faster recoveries.

Decision-useful summary for investment teams

Most tenancy failures start with sequencing errors: missing safety certificates at the right time, consent or licence gaps, or prohibited fee terms. These flaws directly affect possession routes, insurance, and recoveries. The fix is a gated process: verify title, consents, licensing, EPC, and safety; serve the statutory pack; take cleared funds; then date and release keys. When a third-party agent runs point, test their workflow with evidence, not assurances. For portfolios, maintain licence registers, renewal calendars, and deposit protection reconciliations tied to scheme certificates. For non-resident landlords, set up NRL on day one to avoid cash flow surprises. The cost of this discipline is small relative to the downside of an unenforceable tenancy. For broader transaction process hygiene, see this overview of due diligence.

Closeout and retention

Archive the complete file with index, versions, Q&A, user list, and full audit logs. Generate a file hash and store it with the archive index to evidence integrity. Apply retention schedules that meet legal and insurer requirements. On expiry, instruct vendor deletion and obtain a destruction certificate. Legal holds override deletion until released. If your tenancy sits within a larger asset transaction, this primer on a sale and purchase agreement may help contextualize upstream dependencies.