Why your tenancy agreements might not be as enforceable as you think they are?
Think of the last tenancy agreement that you signed. Whether you were the lessee or the lessor, try to remember your impressions as you first read through it. Maybe it seemed rather professional, strewed with words such as “hereto” and “forthwith”. Maybe it was refreshingly easy to understand but a questionable half a page long and somewhat poorly formatted. With that last agreement in mind, here are a few common reasons that it may not be as enforceable as you think it is.
Is a written tenancy agreement a legal obligation?
It is perhaps surprising for people to learn that in England and Wales, it is not a legal obligation for parties to have a written tenancy agreement. Such agreements remain commonplace because they are highly beneficial for all parties involved. However, since they are not mandatory, there is no consensus on what a tenancy agreement must look like; even the government’s own model tenancy agreement is often criticised as being inadequate.
Thus, when left to their own devices, there is much room for people to put terms in their tenancy agreement that are not enforceable or to leave out terms which risk making the entire contract unenforceable. For example, a term that says gives the landlord unfettered access to the property at all times is likely to be unenforceable on the grounds of unfairness. Similarly, an agreement which does not contain the name and address of the landlord is likely to be thrown into doubt because it is missing a standard piece of information.
Is your tenancy agreement up-to-date with the legislation?
The housing sector is heavily regulated, and due to its high elasticity in relation to other markets, the regulations are always changing. Even ignoring the current emergency legislation in place due to the coronavirus pandemic, the last couple of years have seen the following changes take place: tenancy fees have been banned, landlords in England must give tenants certain prescribed information about their chosen deposit protection scheme; landlords in Wales have a list of information which they must give tenants before requesting a holding deposit; all rentals must be inspected in line with the newest electrical safety standards, and so on. Did your last tenancy agreement take these changes into account? Are you ready to take future changes into account, such as the anticipated enactment of the Renters’ Reform Bill, which will scrap section 21 notices?
What are the risks of using out-of-date tenancy agreements?
If you have not updated your tenancy agreement with the latest legislation, it might contain illegal clauses which are unenforceable. Landlords risk paying a £5000 fine if they enforce the illegal clauses. Not removing illegal clauses from a tenancy agreement will ultimately give a poor impression to tenants who are up-to-date with the law. Finally, it is important for landlords to be aware of the official guidance on topics such as pets to give the appropriate response to tenant requests.
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Why you shouldn't update the terms of your tenancy agreement by yourself
Say, you realise that your tenancy agreement is out of date, and want to amend it to reflect the present state of things. Landlords often do this when faced with new tenants, a newly renovated property, or a simply different set of circumstances to the previous one. You may make the changes you want on your own, or if the contract has already been signed by both parties, you seek the consent of all parties and agree to make a formal contract amendment.
There is now the risk that you will edit the agreement so much to the point it is unenforceable. Are the changes you made purely superficial? How do they interact with the rest of the contracts? Do clauses conflict with each other? Does the formatting make the contract readable? How can you be sure that the contract as a whole makes legal sense? These are questions that landlords and letting agencies who recycle the same tenancy agreement template over and over would benefit from asking themselves.
How to create your own custom tenancy agreement
Having a good grasp of the current law is key to signing an enforceable contract, and ensuring it remains enforceable throughout your tenancy. Yet, this is a task something not afforded to those without legal counsel at bay. Contracting platforms like Legislate solve this burden by offering contract templates which are up-to-date with the law, fair, and have been reviewed by a legal professional. Users are invited to negotiate and create contracts on their own terms, while being reassured that they are staying within the bounds of the law and creating a sensible and enforceable contact.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.