One in 10 private landlords has no formal tenancy agreement in place with their tenants, according to research by landlord insurance provider Direct Line for Business.

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

Direct Line for Business says it appears 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 13% of landlords have experienced disputes specifically arising from tenants’ rental contracts in the last two years.

In addition, 9% of landlords have not informed their tenants that their deposit is held in a government-backed tenancy deposit protection scheme (TDP). This is despite the fact it’s a legal requirement that landlords provide the name and contact details of the tenancy deposit protection scheme (TDP) and its dispute resolution service within 30 days of taking a deposit. The research also revealed that 4% of landlords have not taken any deposit from their tenants.

Nick Breton, 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.

“We understand that getting legal documents in place can be complicated which is why we’ve launched our new Legal Documents Service for landlords. Not only can this save landlords time and money, but creating the documents is both quick and easy, and most importantly, they can be reviewed by a Solicitors Regulation Authority (SRA) regulated law firm to ensure they are legally compliant. Based on our research of solicitor prices, it is estimated each landlord using the service would save over £250.”