When you’re about to sign a tenancy agreement, it can be difficult to know whether it should be witnessed, made as a deed and can it be signed electronically? In this article we try to explain the various requirements of signing a tenancy agreement and accompanying documents such as deposit prescribed information.
Contents
Tenancy Less Than Three Years (and Other Conditions)
A tenancy agreement with a fixed term for less than or equal to three years can be created verbally for it to be a valid tenancy (although this is strongly advised against!).
As long as the tenancy is for 3 years or less, at a market rent and the tenancy takes effect in possession (i.e. the tenant is entitled to possession from when it commences), there are no special requirements in relation to signing. There are no witnessing requirements for example.
Section 54 Law of Property Act 1925 provides:
54 Creation of interests in land by parol.
(1) All interests in land created by parol and not put in writing and signed by the persons so creating the same, or by their agents thereunto lawfully authorised in writing, have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only.
(2) Nothing in the foregoing provisions of this Part of this Act shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years (whether or not the lessee is given power to extend the term) at the best rent which can be reasonably obtained without taking a fine.
Tenancy Greater Than Three Years
If the tenancy is for greater than a 3 years term or, perhaps it doesn’t take effect in possession or, it is not at a market rent, the tenancy agreement must be made in writing.
Because such a tenancy must be made in writing, it must also be made as a deed under section 52 Law of Property Act 1925.
52 Conveyances to be by deed.
(1) All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed.
(2) This section does not apply to— … (d) leases or tenancies or other assurances not required by law to be made in writing …
In order for a deed to be valid, the document must comply with section 1 Law of Property (Miscellaneous Provisions) Act 1989 and be “clear on its face that it is intended to be a deed by the person making it” and be “validly executed as a deed”.
(2) An instrument shall not be a deed unless—
(a) it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and
(b) it is validly executed as a deed by that person or, as the case may be, one or more of those parties.
The deed is validly executed if it is signed:
- by him in the presence of a witness who attests the signature; or
- at his direction and in his presence and the presence of two witnesses who each attest the signature; and
- it is delivered as a deed
Therefore using a simple example of a tenancy for greater than 3 years, the tenancy agreement would have to say that it is being made as a deed prominently and also that it’s being signed as a deed. In addition, the signatures of the parties must be witnessed.
The witness(es) can be anybody as long as they are not a party to the contract.
Signing on Behalf of a Company
In the court of appeal case Northwood (Solihull) Ltd v Fearn & Ors [2022] EWCA Civ 40 the court held that a tenancy agreement and tenancy deposit prescribed information can be signed by a person with authority of the company (including an agent) without the formalities provided by section 44 Companies Act 2006.
Therefore, a manager, director or other authorised person under the company may sign a tenancy agreement.
Agent Signing on Behalf of Landlord
It’s perfectly acceptable for an agent to sign on behalf of a landlord.
Guarantee Agreement
For signing a guarantee agreement (in particular witnessing), please see this article.
Electronic Signing
The Law Society has published a practice note confirming electronic signatures are perfectly acceptable and electronic signatures should be accepted by the courts in their opinion.
This includes for individuals, companies, deeds and witnesses.
In Neocleous & Anor v Rees [2019] EWHC 2462 (Ch) (20 September 2019), the court ruled that an automated signature at the footer of an email is enough to make a binding contract for the sale of land.
Our Tenancy Builder can be used with any electronic signing app but has a built in integration for remote signing with just a few clicks so no app is necessary.
You can view our electronic signatures article for much more detailed information.
