In the vast majority of cases, a landlord will require a tenant to sign a tenancy agreement before they are allowed into occupation.
A verbal agreement by mistake?
However – this does not always happen. Sometimes the keys are given out by mistake before the tenancy agreement has been signed or the tenant is just allowed into occupation with no signed tenancy agreement.
If this happens, landlords need to be aware that they cannot force the tenant to sign.
The Landlord’s ‘moment of power’
Normally, a tenant will have no alternative but to sign the tenancy agreement as that is the only way they will be allowed into occupation. I generally describe this as being the landlords ‘moment of power’. A landlord should make sure that the tenant signs all necessary paperwork at that time because as soon as the tenant is in occupation their immediate incentive to sign is over.
They have what they want – possession of the property – and in most cases, it will take the landlord a long time and a lot of bother to get them out.
So how does the lack of a written agreement affect the landlords’ rights and obligations regarding the tenancy?
Landlords rights and obligations without a written tenancy agreement
You (ie the landlord) will still have the right to charge rent – although without a signed agreement there may be some dispute as to what that rent is.
You will also have the right to recover the property at the end of the tenancy (known as the ‘reversion’) and the right to evict the tenant provided you follow the proper procedure (although it will take a while, particularly at the moment).
However many of the other rights that landlords have are dependent on the terms of the tenancy agreement. For example:
- Rent. Rent is by default payable in arrears. It is only payable in advance when the tenant has signed a tenancy agreement agreeing to this
- Deposit deductions. You will not have the right to make deductions from any deposit taken. As this is the tenant’s money and the right to make deductions is dependent, along with details of what the deductions can be for, on their being a proper tenancy agreement term
- Inspections. You have the right under s11(6) of the Landlord & Tenant Act 1985 to enter and view the property (provided the tenant does not object) for the purpose of viewing its condition and state of repair. You also have the right to enter the property in case of genuine emergency – for example, if it is on fire. However, you do not have the right to enter or inspect for any other reason – including for the purpose of showing round prospective tenants or buyers.
- Pets. As there will be no clause prohibiting pets, tenants will be entitled to keep a pet if they wish.
- Fees. Your ability to charge fees is severely limited by the tenants’ fees legislation. However such fees as landlords ARE allowed to charge are dependent on their being authority to charge them in the tenancy agreement. No tenancy agreement – no right to charge the fees.
There is also the question of the who is allowed to occupy the property. Landlords should try to limit the number of people living in the property as otherwise, you may find themselves liable under the HMO rules.
However, if there is no tenancy agreement stipulating who is allowed to live at the property and prohibiting other occupiers, then tenants will have nothing to stop them – for example – from taking in paying guests and lodgers and even subletting parts of the property.
The lack of a written tenancy agreement will not however affect your legal obligations. You will still have to:
- Comply with the statutory repairing covenants under s11 of the Landlord & Tenant Act 1985, and
- Ensure that the property is fit for habitation under s9A of the same act (in England)
- Respect the tenant’s rights under the ‘covenant of quiet enjoyment’ – which basically means that the tenant must be allowed to live in the property without interference from the landlord (so you cannot enter unless the tenant agrees – even to comply with your legal obligations)
- Obtain an Energy Performance Certificate and serve a copy on the tenants
- Carry out electricity safety checks and serve certificates on the tenants
- Obtain a gas safety certificate and serve a copy on the tenants
- Protect any deposit paid by the tenants (even though they probably won’t be able to claim under it)
- Install smoke and carbon monoxide alarms
Often, the lack of a tenancy agreement will if anything be to the benefit of the tenant rather than otherwise – unless they need to prove the tenancy, for example in order to claim benefit. In which case your ‘moment of power’ may return.
The critical importance of tenancy agreements for landlords
As you can see it is vitally important for landlords to have a properly drafted tenancy agreement setting out what tenants can and can’t do.
Tenants should NEVER be given the keys and allowed into occupation until a proper form of tenancy agreement has been signed by them and provided to you.
Many of the rights which landlords assume are theirs by default are actually dependent upon being present in the written agreement – so the choice of the agreement used is also a matter of importance.
It is best not to use a free document downloaded from the internet as this may well be out of date and could even make you subject to penalties (for example if it purports to charge fees which are now no longer permitted).
It is best to get your agreement from a reputable source such as one of the Landlord Associations (NRLA do a good one) or from legal stationers such as Lawpack.
All members of my Landlord Law service are entitled to use the Landlord Law tenancy agreements which are regularly updated to keep up with legal changes.