It is possible to create a tenancy without a written tenancy agreement. But it is not a good idea.
Written tenancy agreements – the Law
A tenancy is a type of ownership of (or strictly speaking ‘interest in’) land and the Law of Property Act 1925 says that all interests in land need to be created by deed.
However it then goes on, in s54(2), to say that in some circumstances a tenancy can be created without a deed:
Nothing in the foregoing provisions of this Part of this Act shall affect the creation by parol of leases taking effect in possession
- 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.
Which translated into ordinary language means that a tenancy will be created without a written tenancy agreement
- when they move in
- if the term is three years or less
- if there is a market rent
- and there is no premium or ‘key money’
What this means is that if you allow Fred to move into your flat on a handshake and an agreement that he will pay you £450 pcm, that will create a valid assured shorthold tenancy.
Things included if there is no written tenancy agreement
Some things will be included in a tenancy agreement whether they are written down or not. For example:
- The ‘covenant for quiet enjoyment
- The landlord’s statutory repairing obligations
- The tenant’s right to be evicted by a court order (as set out in the Protection from Eviction Act 1977)
- The tenant’s duty to use the property in a ‘tenant like manner’
- S81 of the Housing Act 1980 which provides that tenants should not carry out improvements or alterations to a property without the landlord’s written consent
- S15 of the Landlord & Tenant Act 1988 which provides that the tenancy cannot be assigned or sublet without the landlord’s agreement
Tenancies without a written tenancy agreement – the problems
The trouble is – not having any agreed written terms will bring in problems. For example:
- Rent for tenancy is by default (ie if there is no agreement to the contrary) payable in arrears. So Fred will legally be able to pay you at the end of the month rather than at the start.
- If he then claims that actually you agreed to let him live there for £400, not £450, it will be difficult for you to prove otherwise – as there is nothing written down.
- If you took a deposit, and Fred disagrees with your deductions at the end of the tenancy, you will not succeed at adjudication as you are only entitled to make deductions from the deposit (which is the tenant’s money) if there is a tenancy agreement term saying what things you can deduct.
And so on.
Always have an agreement
Because of the problems that can arise if you do not have a written tenancy agreement, landlords are strongly advised to make sure that ALL tenants have signed a proper tenancy agreement BEFORE they are given the keys.
DON”T trust them to come to your office and sign it later. They may say they will, but if they change their minds, there is nothing you can do about it.
You can’t force them to sign. And the only way you can get them out is by evicting them through the courts. But as there is no written tenancy agreement you will not be able to use the quicker ‘accelerated procedure’ if you want to use section 21.
So although a tenancy without a tenancy agreement is possible, it is something you should avoid at all costs.
NB Tenancy agreements can be obtained via my Landlord Law service.