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.
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 High Court case Northwood Solihull Ltd v Fearn & Ors (2020) EWHC 3538 (QB), , the court held that tenancy deposit prescribed information was invalid if not correctly signed by a company.
If the landlord protects the deposit, the deposit prescribed information must be signed by the landlord. If the landlord is a limited company, and protects the deposit, the signing must be in accordance with section 44 of the Companies Act 2006. If the deposit is protected by the letting agent, the prescribed information can be signed by either the landlord or the agent. Though not the point under discussion in the Northwood case, agents would be well advised to sign all prescribed information in accordance with the Companies Act as a precaution.
As deposit prescribed information must be signed under the Companies Act in some cases (where the landlord protects the deposit), the tenancy agreement would be well advised to be signed the same way because there’s no reason not to. It is better to have too many signatures than not enough!
Signing by companies is governed by the Companies Act 2006.
A document is validly executed under section 44 if it is signed on behalf of the company by any of the following:
- two directors
- one director and the secretary
- a director of the company in the presence of a witness
44 Execution of documents
(1) Under the law of England and Wales or Northern Ireland a document is executed by a company—
(a) by the affixing of its common seal, or
(b) by signature in accordance with the following provisions.
(2) A document is validly executed by a company if it is signed on behalf of the company—
(a) by two authorised signatories, or
(b) by a director of the company in the presence of a witness who attests the signature.
(3) The following are “authorised signatories” for the purposes of subsection (2)—
(a) every director of the company, and
(b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company.
(4) A document signed in accordance with subsection (2) and expressed, in whatever words, to be executed by the company has the same effect as if executed under the common seal of the company.
(5) In favour of a purchaser a document is deemed to have been duly executed by a company if it purports to be signed in accordance with subsection (2).
A “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.
(6) Where a document is to be signed by a person on behalf of more than one company, it is not duly signed by that person for the purposes of this section unless he signs it separately in each capacity.
(7) References in this section to a document being (or purporting to be) signed by a director or secretary are to be read, in a case where that office is held by a firm, as references to its being (or purporting to be) signed by an individual authorised by the firm to sign on its behalf.
(8) This section applies to a document that is (or purports to be) executed by a company in the name of or on behalf of another person whether or not that person is also a company.
Under section 43 Companies Act 2006, a contract has fewer requirements and can be made by writing under its common seal or signed by a person acting under its authority. If the contract has to be made as a deed, it must still be witnessed in the same way as an individual signing.
As the prescribed information case mentioned earlier shows, the best way where the landlord is a company, is for the formalities under section 44 above to be complied with (e.g. two directors or one director and a witness). This should be done on all parts of the tenancy including deposit prescribed information.
Agent Signing on Behalf of Landlord
It’s perfectly acceptable for an agent to sign on behalf of a landlord.
For signing a guarantee agreement (in particular witnessing), please see this article.
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  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.