My tenancy agreements all have a space on them for the tenant and the landlords signature to be witnessed and state that they are signed as a deed.
But is this really necessary?
Under section 52 of the Law of Property Act 1925 all conveyances of legal title (which is what a tenancy or lease is) must be by deed unless they are a lease or tenancy not required by law to be in writing.
S54 (2) says that leases which are
taking effect in possession for a term not exceeding three years (whether or not the lessee is given power to extend the term) at the best rent which can be reasonably obtained without taking a fine
are not required to be in writing.
The significance of the LPA s54(2)
What this means is not just that some tenancies do not need to be created in writing.
It means that even if the tenancy is one which falls within the terms set in s54(2) – for example if it is signed in advance – even if it is not signed as a deed at that time, it will still become a tenancy as soon as the tenants move in and start paying rent (so long as it is a market rent).
In virtually all cases, where a tenant actually moves in and pays rent, a tenancy will be created, if it has not already been created by the tenant signing a tenancy agreement deed.
So although, yes, you should ideally create some types of tenancy as a deed, it is not the end of the world if you don’t. The tenants after they have moved in are not (for example) classed as squatters – they are tenants. Because of s54(2).
Why signing as a deed is a good idea
So why do my tenancy agreements (and many others) provide for signature as a deed? (Which incidentally requires signatures to be witnessed and the document to state it is signed as a deed).
1. To make it seem serious
Often people do not understand that a tenancy is a serious document which can bind them to pay large sums of money for long periods of time. For example, for the vast majority of tenancies there is no right to a cooling off period.
Having to sign the document as a deed adds that extra touch of solemnity which hopefully helps people to realise that this is a serious business.
2. To prevent problems about the enforceability of the tenancy agreement
Although an oral tenancy will be created under s54(2) (in most cases) no matter what, most landlords will want the terms of the their tenancy agreement to apply.
In most cases this will be implied anyway, but if it is signed as a deed there can be no argument.
3. So there can be no doubt about the fact of the tenancy
Although tenancies will invariably be created under s54(2) no matter what, not everyone realises this. Many people believe that you have to have a proper tenancy agreement to create a tenancy.
So if you have a nice agreement all signed up and witnessed, that will be conclusive and no-one will be able to deny it.
However if your tenant is going in today and you can’t find anyone to be the witness – don’t worry. Your signature alone and that of the tenant will be sufficient.
