It is possible to enter into a verbal, legally binding contract to rent a residential property. This might not be advisable though. In this post, Thomas Taylor a legal expert from our partner Net Lawman explains what you should know about your obligation to form a written tenancy.
However, since 27 February 1997, landlords in England and Wales have been obliged to give certain information about the tenancy to the tenants in writing:
within 6 months of the start of the tenancy, and
within 28 days of a request by the tenant at any other time (unless the landlord has a reasonable argument as to why complying with this time requirement is not possible).
Landlords in Scotland also have to provide this information.
Not providing this information may prevent a landlord being able to serve a valid notice to terminate the tenancy.
While only limited information is required in writing, it protects both sides to record the whole contract in writing, and not just the key details required by law. So usually, this required information is included within a written tenancy agreement.
This article looks at what information must be given in writing to tenants, whether or not landlords and agents use a written tenancy agreement.
Key Contractual Terms Required by Law in Writing
The Start Date of the Tenancy
Many of the rights of both the tenant and the landlord, particularly those relating to ending the tenancy, depend on the amount of time that has elapsed since the tenancy started. Knowing the date on which this happens is crucially important.
The start date of the tenancy might be different from the date of the agreement. For example, the parties might agree on the 21st March (the date of the agreement on which it is signed) that the tenant will gain possession from the 1st April (the date of the start of the tenancy).
Although the concept of rent needs no explanation, it is important to note that the legal requirement is to tell the tenant how much rent is due under the tenancy agreement, and not how much he or she might be liable to pay (if the property is let to multiple tenants who are jointly and severally liable), nor how much the rent for the whole property might be (if it is let under multiple, separate contracts).
If there are multiple tenants, then it is up to the tenants to decide between them how to split the rent payments. They may decide that they pay different amounts (for example, relating to the size of the bedrooms).
It is also required to give the frequency with which rent will be paid, such as “£500 every month”.
Because people are paid by their employer on a monthly basis, for convenience of the tenant, most landlords ask for rent to be paid monthly. Some landlords ask for rent to be paid more regularly. It is also possible that rent might be paid less frequently, such as once a quarter, or annually.
If rent is collected weekly, then the landlord must fill out a rent book (which the tenant keeps) to record receipt of payments.
Also related to the amount and frequency of the rent are the following two pieces of information. But unlike the amount and frequency, these do not have to be given in writing.
Unless the tenancy agreement states otherwise, the law is that rent should be paid in arrears rather than in advance. But to protect the landlord better from non-payment by the tenant, it is usual for the tenancy agreement to state that it will be paid in advance.
The tenancy agreement is also likely to state how the rent should be paid, for example, by direct debit, or by standing order. This reduces the possibility that the tenant might use the excuse that he or she didn’t know how to pay if he or she doesn’t pay on time.
The Rent Due Date
For most tenancies, rent is due in advance on the same day of the month that the tenancy started (assuming that the tenancy didn’t start on or after the 29th day of the month).
If the date that rent becomes payable is on a different day, then usually the tenant pays a one-off amount that covers the number of days before the first regular due date.
The Length of the Fixed Term
The fixed term is the period that is the minimum length of time that the tenancy will last. During this period, the landlord cannot give the tenant notice to leave (although evictions are possible), and the tenant cannot give up the obligation to pay the rent (even if he or she moves out).
An assured shorthold tenancy agreement (in England and Wales) and a short assured tenancy (in Scotland) have a fixed term of at least 6 months.
Only by mutual agreement can the tenant and the landlord change or end the tenancy during this time.
At the end of the fixed term, the tenancy does not end (and the tenant does not have to move out). Instead, the tenancy continues on a rolling basis on the same terms until one party gives the other notice.
It is unusual for a fixed term to be longer than 6 months. Fixed terms give greater protection to the tenant than to the landlord, so most landlords give the minimum fixed term. That way, if there is an unforeseeable problem later on, such as non-payment of rent, damage to the property or anti-social behaviour, notice to leave can be served rather than having to go through the more difficult eviction process.
Other Information Required in Writing
The tenant must be given the name and address of the landlord, even if the property is let and managed by an agent.
This allows tenants to communicate with the landlord directly, including if they want to serve notice or raise an issue.
The requirement to disclose key information isn’t particularly onerous for most landlords, but it is something about which to be aware.
The aim is to make sure that both sides to an agreement have some record of the most important information in case of a later dispute.
Thomas Taylor has a Masters (M.A) in Economics from the University of Edinburgh, and is a Fellow of the Association of Chartered Certified Accountants. He spends his free time skiing, kayaking, rock climbing and perfecting his taekwondo. Thomas advises Net Lawman on many different issues, from accounting to business strategy.
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