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Tenancy and licence agreements

This content applies to England

Agreements can be verbal or written.

Written or verbal agreement

Tenancy or licence agreements may be written or verbal. Verbal agreements are as legally binding as written ones. However, it is advisable to have an agreement in writing so that it is clearer where each party stands.

Effect of statutory rights

Agreements cannot take away the rights granted by Acts of Parliament to tenants or licensees, even if the wording of an agreement says otherwise. For example, section 11 of the Landlord and Tenant Act 1985 places certain repairing obligations on the landlord which cannot be removed by placing the obligation on the tenant in the wording of the tenancy agreement.

Terms of the agreement

The terms of a tenancy (or licence) agreement can be negotiated between the landlord and the prospective tenant, but in practice the tenant may not have much scope to negotiate favourable terms.

Before a tenant signs up to a tenancy s/he should read the agreement carefully and check the following:

  • the type of letting (eg what does the tenant have sole use of, what facilities does s/he share with others)
  • how the tenancy can be ended
  • is it for a fixed term, and if so is there a break clause?
  • the amount of rent and whether it includes payments for council tax, gas, electricity etc
  • how often the rent is due, and when it is payable
  • is there a rent review clause?
  • if a private landlord, the amount of the deposit
  • if there are any other charges payable
  • what the tenant's and landlord's obligations are to repair and/or decorate the property
  • whether the tenant is allowed to sublet or assign the tenancy
  • who the tenant should contact if there are any problems during the tenancy.

See the Competition and Market Authority guidance for information on unfair contract terms .

Sham agreements

It is important to be aware that the 'label' on the agreement does not determine the real status of the occupiers.

To avoid Rent Act and Housing Act protection, landlords have tried to give agreements that purport to be licences, but were subsequently held to be tenancies. It is the reality of the situation and not the label attached to an agreement which determines whether an occupier is a tenant or a licensee.[1] For more information, see What is a tenancy? and What is a licence?.

If there is evidence (verbal or otherwise) that a term in an agreement was never intended to be effective, the evidence can override the written agreement to determine whether the agreement is a tenancy or licence. In some cases, occupiers have signed agreements saying that they will allow the landlord to share their home or to place other occupiers in their home: these have often been challenged on the basis that the terms were not intended to be effective and that they were simply false devices to avoid the creation of a tenancy agreement.[2] Nonetheless, if there is a written agreement, it is always going to provide good initial evidence of what was intended and the burden of proof will always be on the person seeking to overturn the provisions of a written agreement.

Tenancy agreements for adults lacking capacity

If a person lacks the mental capacity to sign a tenancy agreement, any one intending to sign the agreement on the person's behalf can only do so with the authorisation of the Court of Protection.[3] This situation principally arises when an adult with learning disabilities is moved from hospital or a care home into supported living arrangements in the community. Normally, the Court's authority must also be sought in relation to signing an agreement to terminate the tenancy. The Court of Protection has issued guidance on how to make an application for authorisation in these circumstances.

Death of landlord

A tenancy agreement does not terminate on a landlord's death. The executor of the landlord's estate (where the landlord has left a will) takes over the interest of the landlord, until such time as the property is either transferred to the successor or sold.[4] Where the landlord did not leave a will, the property passes to the Public Trustee until a member of the landlord's family obtains a grant of administration of the estate.[5] A new landlord is bound by the terms of an existing tenancy agreement.

Rent book

It is only a requirement for a landlord to provide a tenant with a rent book (or similar document) where the rent is payable weekly.[6] There is no requirement for a landlord to provide a rent book to any licensee.

[1] Street v Mountford (1985) 17 HLR 402, HL; Antoniades v Villiers and Bridger (1989) 21 HLR 79, HL; Bruton v London and Quadrant Housing Trust (1999) 31 HLR 902, HL.

[2] Aslan v Murphy (no.1) (1989) 21 HLR 532; Crancour v DaSilvaesa (1986) 18 HLR 265, CA; Kirby v Lynch [2010] EWHC 297 (QB).

[3] Mental Capacity Act 2005.

[4] s.36 Administration of Estates Act 1925.

[5] s.9(1) Administration of Estates Act 1925.

[6] s.4 Landlord and Tenant Act 1985.

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