Earlier today I received a phonecall from a friend of mine; she explained to me that her landlord has requested for her to vacate his property by Saturday (4 days away). They had a dispute over the payment of rent.
She was in a panic because finding a reasonably priced place to rent in London with in 4 days is a mission impossible. She then explained how she had no written contract with her landlord, just a piece of paper declaring that she has paid a deposit, consequently she assumed she had no rights as a tenant. WRONG!!!
A ‘Verbal Contract’ is binding by law
Simply, a verbal agreement is as legally binding as a written Tenancy Agreement (however, I would never advise you enter into one).
As soon as a landlord agrees to allow someone to rent his or her property and accepts rental payment, a verbal contract is formed. So this whole, “get out of my property with in 3 days” rant won’t fly I’m afraid.
Legal rights without a written Tenancy Agreement
The fact a tenant does not have a written tenancy agreement does not affect a tenant’s statutory legal rights, or the landlords legal rights, for that matter. Both parties are still protected by statutory law.
Without a written contract, a landlord will still need to serve a valid Section 8 to evict a tenant. Even then, the landlord will need legitimate grounds to evict the tenant, and the tenant is entitled 14 days after the form is served, to decide what he/she wants to do. There is actually no difference in procedure for evicting a tenant that hasn’t got a written contract than someone who has.
A tenant is entitled to stay in the property until evicted by a court bailiff (or High Court sheriff) acting under the authority of a court order for possession. If a tenant is evicted any other way, the landlord could be held liable for unlawful eviction.
Additionally, even if a tenant with no written contract is simply unhappy about the condition of the property, they still have rights. They can always speak to the Housing Officer at their Local Authority. They can arrange for the property to be inspected and for an improvement notice to be served on the landlord if the property does not meet the proper standards.
How Is a Verbal Tenancy Agreement Created?
For a verbal tenancy to exist it must have three essential elements:
- An offer
- An acceptance of offer
- Payment- known as the legal term consideration
If these three elements exist, then you’re essentially in a verbal tenancy agreement. This contract is binding on all parties involved.
There are other elements to consider:
- Both parties must agree to be legally tied to the agreement
- Both parties are capable of making an agreement i.e. not under the age of 18, drunk or insane.
- Both parties must be acting freely and not under duress
- The contract being made cannot be contrary to law
Why Verbal Tenancy Agreements are not advised
Even though “verbal agreements” are legally binding, it is still advised that a written tenancy agreement is always present when creating a tenancy.
Firstly, a landlord or tenant that doesn’t have a written contract is an idiot. Written contracts are there for your utmost protection. I would question any tenant or landlord that doesn’t require a written contract. In my opinion it just triggers off a signal, “DODGY BASTARD”
Secondly, a written tenancy is created to avoid misinterpretation as well as agreeing to the key points in the tenancy. By having a well-constructed tenancy agreement which outlines the tenant and landlords’ responsibilities, any disputes further down the line would be avoided.
How to avoid creating a verbal tenancy agreement
It is very important to document all communication between a landlord and a tenant. The problem may arise in a verbal contract where a tenant may argue that they never accepted the terms of the contract and therefore a contract was never actually created. In this case, it’s very difficult to prove who is actually in the right or wrong, so written proof is vital.
If you are discussing a potential let or renewal of a contract, you should always make sure that that you do not create a verbal tenancy agreement. You can avoid this by using the words ‘Subject to Contract’ on any correspondence relating to potential lets and when leaving messages on answering machines or speaking with prospective tenants.
Creating a Written Tenancy Agreement
Putting a written tenancy agreement in place couldn’t be easier. You don’t have to draft one yourself, there are already plenty of resources available at your disposal. There are hundreds of websites online that offer Tenancy Agreement templates- you just need to download one and fill it in like a regular form.
It is important to ensure you source your Tenancy Agreement from a reputable vendor, as there are plenty out there that have either been butchered with unlawful clauses and/or are simply out-dated.
I have a range of Tenancy Agreements available to purchase from my site for £4.99, which have been created by specialist Solicitors. They can be reused as many times as you wish. For more details, go to the Tenancy Agreement blog post.