Foundations of landlord and tenant law – Part 6
When I was a law student I did separate courses on land law and the law of contract. Presumably, this is still done. However, in real life they tend to be mixed together. Particularly in the case of a lease or tenancy.
A tenancy as land
As we saw in part 1, a lease or tenancy is one of the two ‘estates in land’ and therefore legally is treated in many ways in a similar way to what most people think of as ‘proper’ ownership of land. So it needs to be conveyed by deed, only four people can own the legal estate, etc.
This is very obvious with long leases, as these often cost as much as or even more than, buying a house or piece of land, and they will generally last longer than your lifetime.
However, it is less obvious with the shorter tenancies such as assured shorthold tenancies. Here, under a special rule in s54 of the 1925 Law of Property Act, a tenancy for a term of under three years can in most cases be created without a deed. So there is less formality and the tenancy will often only last a few months. So people tend to think of them differently.
But they are nonetheless still a ‘legal estate in land’.
A tenancy as a contract
A tenancy or lease is also, as we saw in part 4, a legal contract, with consideration on both sides. Most tenancies will have long tenancy agreements setting out the terms and conditions which the landlord and tenant agree will govern how the tenancy works.
There are two situations where people often get confused between the rules of land law and contract law. These are where more than four people are on a tenancy agreement, and tenancies granted to minors (people aged under 18).
More than four people signing a tenancy agreement
I discussed this in some detail in my blog post here. Basically, if more than four tenants sign a tenancy agreement, the legal title will be held by the first four, as joint tenants for themselves and the other people who have signed as beneficiaries.
However, there is no limit to the number of people who can be a party to a contract so all of them will be bound by the terms in the tenancy agreement. In particular, to pay the rent.
Which is why you want to make sure (if you are a landlord) that all the people living in the property permanently are on the tenancy agreement. Otherwise, you will not be able to sue them for the rent. It may also cause difficulties if they remain in the property when the named tenants move out.
Tenancies to under 18s (minors)
Under the land law rules, minors cannot hold an ‘estate in land’. However, under contract law, minors can be liable for ‘necessaries’. These are things essential for living such as food, shelter etc.
Before (I think) 1969, a minor included anyone under 21 rather than 18 as now. So young men at college in Oxford or Cambridge were minors, and there are quite a few cases brought by outraged traders against reckless young men for things such as fancy waistcoats, and the courts had to decide whether these constituted ‘necessaries’ or not.
There is no doubt that rent is a ‘necessary’. So an underage tenant signing a tenancy agreement will be liable for the rent. However, he will not be the legal tenant. The landlord will, technically, be holding this for him in trust until his 18th birthday. At which time he can reject it if he wishes.
This is not a good idea, so you should never let a minor sign a tenancy agreement as the sole tenant.
What you need to do is to have an adult on the tenancy agreement too. Then they will own the tenancy on trust for the minor, and will also usefully serve as a guarantor. Once the minor reaches 18 a new tenancy can be granted in his sole name.
With the rise of consumer law and the development of codes and regulations to protect ordinary people or consumers against the wiles of big business, there is an increasing tendency to treat short-term tenancies as consumer contracts.
Perhaps the most obvious example of this is the fact that the Unfair Terms in Consumer Contracts Rules – which are now part of the Consumer Rights Act 2015 – apply to tenancies. I talked about this on days 15 and 16 in my series on Tenancy Agreements last year.
Next time I am going to talk a bit about the essential elements of a lease or tenancy.