This is an urban myth which perhaps should be real but isn’t. Unfortunately you can have a proper legal tenancy without there being any paperwork at all. They are sometimes called oral tenancies.
Oral tenancies
An oral tenancy is where the tenant just goes in on a verbal agreement and a handshake (and sometimes not even a handshake). In fact you may not have to say anything at all. If you move into someone’s property and start paying rent, you will probably have a tenancy.
But this is not really a very good idea:
- memories fade and you may have disagreements about the terms – disagreements that a written agreement would have easily resolved
- You will not be able to use the special accelerated possession procedure (if you are the landlord) or
- You will have difficulties claiming housing benefit (if you are a tenant)
So whether you are a landlord or a tenant you will be better off with a proper well drafted agreement. You can find out more about tenancy agreements in my 31 days of tips on tenancy agreements series.
Plans to change the law
Various reports and working parties have felt that having a tenancy agreement is so important that it has been proposed on a number of occasions to make tenancy agreements mandatory. For example in the ill fated Law Commission Renting Homes report and various other reports since then. The last government went so far as to state their intention to implement this. However they then lost the election, and the new Coalition governemnt has made it clear that they do not intend to introduce any more regulation for the time being.
Assured and protected tenants
There is though one situation where tenants will be advised not to sign any tenancy agreement. This is where they have been in the property for a long time (in most cases at least 13 years, ie since before February 1997) and have a protected or an assured tenancy.
These tenants have long term security of tenure which means that they cannot normally be evicted. Often any agreement they signed will have been lost in the mists of time, or they may never have signed an agreement in the first place. However the landlord cannot force them to sign anything now (as he has no power to evict them if they refuse). Signing a new tenancy agreement is unlikely to improve their position, so, these tenants are generally advised not to sign anything. To the intense annoyance often, of their landlords!
What do you think? Should tenancy agreements be made mandatory? Or do you think it should up to the parties themselves?
You can read the rest of my urban myth series >> here.
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Tessa
That’s a really useful article, thank you. I must admit my ignorance and say I “believed” in the myth as well, so thank you for putting me right.
On the question of tenants with security of tenure, can they not be evicted at all? if the landlord wants to sell the property, for instance, does he have to sell with the tenant sitting in place? What happens if the tenant damages the propertyt can the be removed then even if he has security of tenure?
Mike
Hi Mike, thanks for your comment.
Tenants with security of tenure can sometimes be evicted, but as there are very few (and in most cases effectively no) ‘mandatory grounds’ it is not straightforward.
For example they can be evicted for rent arrears, but are often given suspended possession orders to allow them time to pay. They can be evicted if the landlord provides ‘suitable alternative accommodation’ but only if the Judge considers it is suitable (there is a long line of case law here). Damaging the property is a ground for possession but is subject to proof and the Judges discretion.
If the landlord can’t evict, he will have to sell with them in occupation. Investor landlords need to watch out for this, and often low priced investment properties are low priced as they have sitting tenants who cannot be evicted easily.