One of the confusing things about tenancy agreements is that sometimes the clauses in it will be unenforceable.
The reason for this is some regulations called The Unfair Terms in Consumer Contracts Regulations 1999.
These come from Europe and similar regulations apply in all EU Countries.
They are regulations designed to prevent large companies from taking advantage of their position when dealing with consumers and provide that clauses which do not meet the test of fairness will be unenforceable.
Several cases have confirmed that they apply to tenancy agreements. Which means that amending tenancy agreements may be counter productive, if the amendment can be considered ‘unfair’.
Examples of unfairness
So what sort of things do landlords need to watch out for when amending tenancy agreements? Here are some of the main types of clause which will be considered unfair:
Clauses which exclude a right which a tenant would otherwise have had
For example under the common law, tenants with a monthly periodic tenancy can end this on a one month notice to quit. So any clause saying that they must give two months notice will be void.
The problem with this requirement is that you need to have a very good knowledge of what tenants rights are in the first place to be sure that you are not breaching them by your amendments!
Which is why amateur amendments to tenancy agreements can be so dangerous.
Clauses which unreasonably interfere with the tenant’s use of the property
Examples include prohibiting all guests and excessive cleaning requirements.
So you can limit guests but you cannot prevent tenants having any guests staying at all. You can require that a property be kept clean but cannot require that tenants wipe down kitchen surfaces daily.
Prohibition clauses which do not include wording providing for tenants to request permission
The permission request wording must also say that permission must not be unreasonably refused or delayed.
So a blanket prohibition against pets will be unfair and unenforceable. You must put in the wording or the clause will be unfair and the tenant will be able to keep the pet.
Landlords often fall foul of this by removing the wording in ignorance of the rules. Whereas in fact, provided you refuse permission for a reasonable reason, this will be unchallengeable. Allowing tenants to request permission does not mean permission has GOT to be granted if they ask.
Note by the way that it will not be unfair to prohibit something which is already against the law, such as keeping unlicensed guns or dealing with prohibited drugs.
Or something which can be the basis of an eviction claim under the law, such as anti-social behaviour.
These are just three of the unfair clauses rules. There are others.
Enforcing the regulations
The Unfair Terms in Consumer Contracts Regulations used to be enforced by the Office of Fair Trading – a famous case back in 2010 was the Foxtons litigation. The OFT was however closed a while back and its functions have been taken over by the Competitions and Markets Authority (CMA).
The regulations can also be enforced by Judges who must consider them when considering a claim based on a tenancy agreement clause, whether or not the parties refer to this in their submissions (see this case).
So landlords – think twice before amending tenancy agreements – for example the agreement that your agent provided for you or which you purchased from a law stationers. You may find that your amendments have the very opposite effect to what you intend!