Question

Tenancy Agreements (England) | Tenant Fees (England)

Legal Clarification

16 May 2018 | 5 comments

Could you please confirm for me whether as the landlord, or the tenant, either are bound to a tenancy contract before the date the tenancy actually starts. I have been informed that unless a deposit and the first month’s rent has been paid either party can pull out of the contract? Is this correct?
Unfortunately, I have to sell a property, tenants have signed a contract for the tenancy to start 1st July, but no money has been paid. I have been told by the letting agent I can only put it up for sale ‘tenanted’. Could you please confirm if this is correct? Many thanks.

Answer

5 Comments

  1. guildy

    We don’t see why a fully signed and completed agreement shouldn’t be binding otherwise there would be no point doing one. It is possible to not date agreements and even when signed they don’t exist because they are “void for uncertainty” (because it’s impossible to say when it would actually start).

    It happens sometimes the other way round i.e. tenants back about before commencement but in those cases, landlords expect the tenant to still take the property (although we accept it can be difficult forcing that and getting financial compensation).

    It is sometimes suggested that where an agreement is made in advance (not taking effect in possession), it needs to be made as a deed. However, it seems as long as the agreement is for less than 3 years, it does not have to be made as a deed because the term “possession” includes the “right to receive” rent in addition to actually receiving rent.

  2. samandi

    I am sorry, I am not sure what you are telling me?

    The contract was signed by the tenants and the agent, 2 months ago for a student let for 11 months starting in July. I have not actually received a copy of the contract. Unfortunately, as stated, circumstances are such that I need to now sell the property. By law am I bound to this contract even though no monies will be paid until 1st July. I was led to believe that the contract is not binding until the tenancy is executed through payment of the deposit and first month’s rent; which will not take place until the 1st July? Therefore, although unfortunate for the tenants, am able to terminate the contract? Is this information correct?

    Do I have to market the property as being ‘tenanted’ whereby only an investor would be interested, or am I able to market it to the general public?

  3. guildy

    In our view the agreement stands so it is effectively tenanted (from July). We’re not aware of any rule that requires rent and deposit to be paid to trigger the contract being valid. Liability to pay rent (from July) is sufficient in our view (think about when a tenant is in occupation and not paying rent – the tenancy still continues until a court order is obtained, the fact they’re not paying rent is irrelevant).

    You could try having a polite word with the tenants and explain your position and asking if they could find alternative accommodation due to unforeseen circumstances at your end. They could then surrender the tenancy (confirmed in writing).

  4. samandi

    As it stands, before July, can the contract be terminated. Surely, the contract does not come into force until the 1st July? Also, the fact that I have not signed the contract myself, does that not make it void?

  5. guildy

    It certainly helps if you haven’t signed yet because presumably your still in a state of “subject to contract”. We had assumed from the wording all parties had signed and agreed everything. Assuming the agent hasn’t signed on your behalf, go back to the agent and tell them not to sign and to inform the tenants.

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