I sometimes get questions from tenants who have signed a renewal tenancy sent to them by their landlords in good faith, only to be told that their landlord has changed his mind and does not want to go ahead with the renewal.
Or get asked by landlords whether they can change their minds, for example becuase there is a prospect of a new tenant at a higher rant.
My answer is generally no, the landlord cannot get out of it. If he has sent a new tenancy agreement to the tenant to sign, and then tenant signs it, there is nothing he can do about it. He is bound by the new tenancy fixed term.
Lets have a look at the law behind this. In my foundations article on contract, I said that there are three parts to a contract –
- acceptance and
The offer will be the landlord sending out the new tenancy agreement to the tenant, the acceptance will be the tenant signing it. As there will always be consideration (the payment of rent and the provision of the property) that will be a binding contract.
Signed tenancy agreement forms are not always required
Generally you can create a tenancy where the term is under three years without a proper deed, indeed it is possible to create a completely oral tenancy. This is set out in section s54 of the Law of Property Act 1925. So the fact that the landlord may not have signed the tenancy agreement sent out will not mean he can get out of it after the tenant has signed it and sent it back.
However if the requirements of s54 are not fully complied with so that a tenancy deed is required to create the new fixed term – I still don’t think the landlord can get out of the new tenancy using his non signature as a reason. Because of equity (which I looked at in my foundations series).
One of the equitable maxims is that “Equity looks on that as done which ought to be done”.
In our scenario the landlord certainly ought to sign the tenancy agreement if the tenant has signed it in good faith. So if he does not (unless there has been some kind of hanky panky on the part of the tenant which would mean he would not have ‘clean hands’) then equity will step in and not allow him to, for example, evict the tenant under a previously served section 21 notice.
Or at least I would hope it would. What does anyone else think?
Advice to landlords sending tenancy agreement forms out by post
I would also strongly advise landlords who send tenancy agreements out to tenants in the post for signature and return, to be very specific in the covering letter as to what the tenant needs to do to get the new fixed term. Particularly if they have already signed the form themselves.
In particular I would suggest they give the tenant a time limit by when the signed agreement must be returned and say if it is not received by then, the renewal will not be effective. Otherwise they may possibly find themselves bound by a signed tenancy form they have not got back yet.