The latest figures compiled by the Land Valuation Office show that there are more than 27,500 separately assessed residential units in Bermuda, many of which are rented out by their owners.

So it is hardly surprising that I often receive telephone calls from landlords or tenants who ask how to deal with a troublesome landlord/tenant relationship.

Today, I'll discuss some of the legal issues surrounding the creation of a tenancy agreement, both in terms of rent-controlled properties and those not governed by the rent control regime.

Only a small proportion of those approximately 27,500 properties are subject to rent control. The current figure is approximately 3,600, although that figure may well increase to about 13,300 once legislation to extend the properties that are governed by the rent control regime is brought into effect by the Governor.

Landlords of rent-controlled properties may only charge a `fair' rent (as assessed by the Rent Commissioner's Office), and must have statutory grounds for requiring possession of a property even after a tenancy agreement has expired.

Landlords and tenants have considerably more discretion when agreeing the terms of a tenancy that is not governed by the rent control regime and thus there is more scope for disagreement after the tenancy commences as to what has been agreed.

Often that is because their agreement has not been written down -- a tenancy agreement for a term of three years or less need not be in writing, while leases granted for a longer term (or which contain an option that might extend them beyond that period) must be in writing. Non-Bermudians should also remember that the Minister responsible for Immigration must approve any lease for a period of five years or more.

Although short-term leases need not be in writing, it is obviously extremely helpful for the parties to have one document that sets out the full extent of their rights and obligations so that both know where they stand, and can hopefully comply with their side of the bargain.

If there is no written agreement, the Landlord and Tenant Act 1974 will imply certain terms, but it does not cover everything that a well-drafted lease would address. For that reason, some landlords will insist upon having a formal lease.

The parties may have an attorney draw up a lease for them. Such a lease would require the payment of stamp duty, which would vary between $75 and $400 depending on the monthly rent for the property.

More often, however, landlords put a `standard lease' before a tenant.

Landlords renting through a real estate agency usually receive the real estate agent's standard form lease as part of the commission arrangement.

I advise tenants not to sign a landlord's or real estate agent's 'standard lease' without taking it away for a close inspection. Tenants should not hesitate to ask the landlord to insert anything that has been missed, or to amend any term that does not accurately reflect the agreement reached between them and their prospective landlord.

It is equally important to landlords that a lease accurately reflects what has been agreed.

Remember that if a tenant signs a lease without reading it, or without being given the opportunity to take legal advice, the mere fact he signed it will not prevent him from claiming that you or your agent misled him regarding its terms.

Landlords must also remember that a court order is always required before a tenant can be legally evicted. A landlord who appears before the court in such an instance will want to do so with `clean hands'.

As it is difficult to regain possession of premises, landlords must take care in selecting their tenants and ensuring that they have sufficient income to pay the rent.

Landlords should ask prospective tenants for references from previous landlords, preferably the most recent, and should follow up to check that the references supplied are genuine.

If the tenant is not able to supply a landlord's reference, the tenant may agree to provide a reference letter from their employer, confirming their salary. A landlord can then make an assessment regarding the prospective tenant's ability to pay the rent.

A landlord is not obliged to accept anyone as a tenant, even if they are the first to arrive at the property or to telephone about it.

It is surprising to me how many of the landlords coming to us for advice regarding how to get rid of a problem tenant had a nasty feeling that they might be taking on trouble from the outset. Sometimes, gut instinct can be a better protection than a well-drawn lease.

Next week, I will discuss some of the terms and conditions that might be included in a tenancy agreement, as well as the common pitfalls that both parties should try to avoid.

*** Attorney Michelle Stone is a member of the Property Department at Appleby Spurling & Kempe. You can write to her with your questions or comments at mstone y ask.bm, or telephone her directly on 298-3235. Copies of Mrs. Stone's columns can be obtained on the Appleby, Spurling & Kempe web site at www.ask.bm.

*** This column should not be used as a substitute for professional legal advice.

Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.