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21:31 PM, 1st June 2013, About 11 years ago 20
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Did you know its not actually necessary, legally, to have a tenancy agreement?
You can create a perfectly valid tenancy on a handshake, handing over the keys and collecting the rent from your tenant (s54(2) Law of Property Act 1925).
The tenant goes in and, bingo – assured shorthold tenancy created. No problem.
Or is there?
Here are three possible problem scenarios
1. Your tenant hands you a cheque for £500 for the first months rent. You say ‘hang on a minute, the rents £600’. He says “Oh yeah? Who says? We agreed £500 mate” How are you going to prove any different? Without a tenancy agreement with the rent clearly stated?
2. You take a deposit for £600 and duly protect it. At the end of the tenancy, you make a claim for the totally ruined carpet in the front room. Your tenant disputes it. It goes to arbitration. You lose. Why? There is no tenancy agreement clause setting out the circumstances under which you can make deductions from the deposit. Oh dear.
3. You decide you want your tenant to go. However, because she wants to be re-housed by the local authority you are told you have to evict her through the courts. You say ‘no problem’ and serve a section 21 notice. Your lawyer points out that you can’t use the accelerated procedure as you do not have a tenancy agreement and so you have to use the other procedure where there is a court hearing. The lawyers bill goes up. Ooops!
It will never happen to me
Now you may be saying “I ALWAYS give my tenants tenancy agreements“.
Good. I’m glad to hear it.
However, it’s something you need to be really careful about because if you let the tenants into occupation before they have signed the tenancy agreement, they can turn around and refuse. You can’t make them sign and as they are already in the property, there is not a lot you can do about it other than evict them, which will take a long time.
So to prevent problems occurring, make it a rule that you will never allow tenants to have the keys and move in until AFTER the tenancy agreement has been signed, by ALL the tenants.
The “letting tenants in on approval” myth
Sometimes people think, mistakenly, that it is possible to allow tenants to move in ‘on approval’ on the basis that if they behave themselves they can be given a ‘proper’ tenancy agreement later. However, this is a myth. As soon as the tenant moves into the property and pays his first rent he is a proper assured shorthold tenant. The only difference is that he is a proper assured shorthold tenant without a tenancy agreement. See the disadvantages listed above.
The situation if there is no signed agreement
So what is the legal situation if, by accident, a tenant does end up in your property without a signed tenancy agreement – and he then refuses to regularise the situation by signing one after he has moved in?
Here are some of the main points:
However the tenant will also be subject to various rules and regulations:
None of this can really compensate for the lack of a properly drafted tenancy agreement.
So make sure you have one signed before the tenant goes in!
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0:39 AM, 4th June 2013, About 11 years ago
Absolutely Mark; never invest in a no hoper tenant.
Full DD is an absolute necessity assisted by RGI if possible.
RGI companies won't allow anything more than a 6 month AST at a time
Sometimes LL can lose sight of full DD for the supposed advantages of a long AST.
Not something that generally actually works and is really unecessary!
I think most tenants would be satisfied by a LL advice that they will not be selling up soon!
Very few tenants will leave until they want to and very few LL will remove a tenant when they are paying rent!
This tenant need not concern himself and the LL should realise a long AST guarantees NOTHING.
All an AST does is stop a LL evicting them within certain timescales and as you suggest long period AST's would invariably be in breach of mortgage conditions.
I think the KISS situation comes to the fore here.
This LL should adopt that strategy.
14:10 PM, 4th June 2013, About 11 years ago
@Simon Gibb
Hi there
I know the idea is to leave comments here to assist the OP. We'd be happy to help the landlord in this situation but not clear that is what's being requested?
Would you like to join SAL?, we will be able to advise you in detail on this and provide Scottish documents etc going forwards.
Tenant advice is not something we offer here at SAL, but there is always the Shelter Scotland helpline for that. 0808 800 4444. It may be others can help you with case law on it sorry not to be able to.
EDITORS NOTE - to join the Scottish Association of Landlords please see this link >>> http://www.property118.com/scottish-association-of-landlords-membership/
Paul Linstead
14:29 PM, 4th June 2013, About 11 years ago
Hi Tessa
Can you use a PO Box number on an agreement AST?
Tessa Shepperson
10:00 AM, 5th June 2013, About 11 years ago
Well you 'can' in that it is not an illegal act and you won't be put in prison or anything.
However I would not recommend it.
I have a feeling that it would not be complaint with section 48 of the Landlord & Tenant Act 1987 which says that a landlord must provide an address to tenants for the service of documents. In which case tenants would be entitled to withhold rent until a section 48 notice is served.
See here for more information : http://www.landlordlawblog.co.uk/2010/05/07/tenancy-agreements-31-days-of-tips-day-7-addresses/
20:47 PM, 5th June 2013, About 11 years ago
I have just been notified that the tenants at xxxxxxx are not renewing their tenancy which expires on Friday. They have decided they are going travelling.
Although we ask for a month’s notice there is nothing we can do to enforce this when it is a fixed term agreementI received the following email from my Letting Agent, is this correct, what about their deposit?
Mark Alexander - Founder of Property118
20:51 PM, 5th June 2013, About 11 years ago
@Eileen, there appears to be something missing from your post.
20:54 PM, 5th June 2013, About 11 years ago
Sorry the content was an email I received from my Letting Agent today to notify me the tenant is going to move out on Friday, ie this Friday! They have a 12 month Lease and evidently it is now at the end of 12 months. I would have thought they should have to give 30 days notice.
Mark Alexander - Founder of Property118
20:57 PM, 5th June 2013, About 11 years ago
@Eileen - tenants are perfectly entitled to move out on the expiry of a tenancy agreement without giving notice. It very rarely happens, it's never happened to me, but sadly that's the law and there's absolutely nothing you can do about it. Some will say that you can put a clause in your AST which is absolutely true but also absolutely unenforceable in law.
21:00 PM, 5th June 2013, About 11 years ago
Mark, thank you for your very prompt reply. Yes, this is the first time it has happened to me also and to be quite frank this Letting Agent has been very good for the past 10 years. But great to know. This is the benefit of being a member of this Forum. Thank you again.
Mark Alexander - Founder of Property118
21:02 PM, 5th June 2013, About 11 years ago
@Eileen - have you seen the new membership status we have launched today? If not see >>> http://www.property118.com/membership/40048/