Tenants and Signing Tenancy Agreements – Can my tenant owe rent if they did not sign the tenancy agreement?
If you have a tenant who owes you rent arrears, but you discover that the tenancy agreement was not signed by the tenant, what can you do? Are Landlords still entitled to the money owed if the agreement has not been signed?
It is possible for a legally binding tenancy to be created even if a tenancy agreement was never signed. Section 54(2) of the Law of Property Act states that an agreement can be created without the need for any writing at all. in most cases, so long as the tenant is in occupation and paying rent – a tenancy is created. Whether or not a proper tenancy agreement has been signed.
You must be able to prove that the rent was agreed. For example, if the monthly rent was £500 and the tenant paid for this for several months and then stopped, then this should be enough to prove the agreement, as the tenant paid £500 a month towards the rent.
However, if the tenant moved in, and failed to pay anything, it may be more difficult to prove what the agreed rent was. In this case, you may be able to claim that the tenant does not have a tenancy at all – as payment of rent is an essential element of a tenancy agreement. All cases are dependent on the facts and legal advice should be obtained in these circumstances.
When tenants stop paying rent, landlords should consider possession proceedings through the courts rather than just issuing a money claim to recover outstanding rent. The reasons for this are:
- It will focus their minds – as they are at risk of losing their home, this can assist with any settlement negotiations between the parties and
- Even if judgment is obtained, landlords will still need to enforce that judgment to try and recover the debt – so if a landlord allows them to stay, they could be in effect providing them with free accommodation.
To conclude, it is vitally important for landlords to have a properly drafted tenancy agreement setting out what tenants can and can’t do. Tenants should never be given the keys and allowed into occupation until a proper form of tenancy agreement has been signed by them.
Many of the rights that landlords assume are theirs by default are dependent upon being present in the written agreement – so the choice of the agreement used is also a matter of importance.
The Lettings Hub is pleased to work with Woodstock Legal Services to support and provide advice about all aspects of eviction notices.