I get asked sometimes about renting to tenants who are under 18. You need to be careful here as minors (people under 18) are legally incapable of owning ‘an estate in land’.
What happens therefore if they sign a tenancy agreement in their name?
This is decided by an act called the Trusts of Land and Appointment of Trustees Act 1996, which says that a conveyance of land (which is what a tenancy agreement actually is) will operate as a deed of trust.
- If the deed is in the name of the minor and someone of full age, it will operate to create a deed of trust with that person being the trustee
- If the deed however is in the sole name of the minor as tenant, then it will operate to make the landlord the trustee.
It is not a good idea for the landlord to be the trustee as it will then make it harder for him to end the tenancy.
Cases law where the landlord was the trustee
In a case in 2009 called Alexander-David v Hammersmith & Fulham LBC, the Court of Appeal held that a landlord cannot serve a notice to quit on a minor tenant where the landlord is the trustee as this would be a breach of trust. The correct course of action is for the landlord to apply to court for the trust to be ended, and THEN serve the notice.
However what happens after the tenant turns 18? A recent county court case, Croydon LBC v Tando, discussed on the Nearly Legal site, takes a look at this.
What the court decided was that the trust continues and therefore still needs to be ended before the landlord can serve notice to end the tenancy. Even though the tenant will then be of full age and capable of owning a tenancy.
So the message to landlords is that they should NEVER grant a tenancy to an under age tenant in his or her sole name.
What landlords should do
If you want to grant a tenancy to someone underage, ALWAYS have an adult named on the tenancy agreement as a co tenant
Once the minor turns 18 you can then get them to sign a tenancy agreement in their own name
If you have any properties let to tenants in their sole name at a time when they were under 18, get them to sign a new tenancy agreement as soon as possible.