Tenancy agreements are a contract between the tenant and the landlord and detail the terms and conditions of renting the property, such as when the rent is to be paid and how much it is, who is responsible for maintaining the property and paying for repairs etc. Anytime you apply for a new rental property, you will most likely have to sign a tenancy agreement before you can move into your new home.
A contract is a legally binding document which is enforceable by law and is an agreement between two or more people. If there are disputes regarding the content of the contract, if the fundamentals or whole contract have been broken, then these claims can be taken to court. The judge will then determine whether a “breach of contract” has in fact been made by either party and they will make this decision based on the underlying law or legislation that the contract is based on – in the case of tenancy agreements, this is usually the Housing Act 1988.
There are 6 key parts of a contract:
- Intention of legal consequences
- The terms and conditions
- Breach of contract
Find out more about what makes up a legally binding contract.
How Can Tenants Breach their Rental Contracts?
For instance, if your rental contract states that no pets are allowed to live at the property but you get one whilst living there, you would have breached the contract. Therefore, it’s worth knowing the consequences of breaking a lease agreement before you infringe them.
Examples of Common Contract Breaches:
- Failure to pay the rent on time and in full
- Allowing more than the stated maximum number of occupants to live in the property
- Sub-letting a room or the entire property without the landlord’s permission
- Decorating or conducting building works at the property without the landlord’s permission
- Using the property as a business premises without the landlord’s permission
Sub-letting is a particularly common cause of contract breaches and has become increasingly problematic over recent years as high rental values give tenants an added incentive to try and make some extra money on the side by letting out a spare room in the property. There are occasions where a landlord will state in the contract that the tenants are allowed to sub-let, however, this is rare and can open up a whole can of worms when it comes to compliance and legal liability for property damage, non-payment of rent, etc.
Most tenancy agreements will contain a clause that either expressly forbids sub-letting of any kinds, or states that sub-letting will only be allowed with the written consent of the landlord. The penalty for sub-letting without the landlord’s permission and therefore breaking your contract will vary depending on your exact circumstances and your landlords’ personal approach to the issue.
What are the Penalties for Breaching a Tenancy Agreement?
Eviction is the most severe penalty a tenant can face for breaching their rental agreement with the landlord. Landlords have the right to start the formal eviction process at any time throughout the tenancy if a breach of the contract has been found. Therefore, it’s imperative that tenants learn what can void their tenancy agreement in order to protect themselves.
Depending on what level the breach of contract was or what the direct consequences of the action taken by the tenant to break the contract are, the action the landlord can take will vary. In some renters agreements the landlord may stipulate that they will pay a fine should any breach occur by the tenant. However, if the landlord tries to implement a fine without this being clearly written into the contract, then the tenant will be able to protest it.
Warning letters are also used by landlords in order to provide tenants with notice that they have broken a clause in their rental agreement. This should be the first course of action taken by a professional landlord, as it gives the tenant time to address the situation and to avoid it escalating to the point where eviction proceedings need to be undertaken.
Will a Breach of Contract Always Result in Eviction?
Resorting to evicting tenants is a drastic measure and shouldn’t be taken lightly. One way that landlords can avoid this situation is to improve their relationship with their tenants and open up communication channels with them, in order to better understand both the tenants and landlords expectations.
It is always worth giving tenants a chance to make things right before resorting to the drastic measure of evicting them. Not only does this avoid the risk of having void periods, but can also save you from the stress, time and costs of a lengthy, drawn-out eviction process.
This handy guide details how landlords can improve the relationship with their tenants.
It is worth remembering that if you are tempted to break a clause in your contract, your landlord could find out about it a lot sooner than you may think. This can happen when the area the property is in has a strong community focus and neighbours often have a good idea as to what is going on at each property and could report any rule-breaking to your landlord. Remember, most professional landlords will conduct regular property inspections which could catch you out.
How Can Landlords Void a Tenancy Agreement?
The Unfair Terms in Consumer Contracts Regulations make any clause which is ‘unfair’ null and void in a court of law. If the landlord added any clauses which infringe on the tenant’s statutory rights in the tenancy agreement, then those terms and clauses will be null and void, even though they are present in the contract. So if a term or condition of the tenancy agreement is giving either party less than their statutory rights, then it can’t be enforced and it won’t hold up in a court of law.
An example of an unfair clause could be: ‘The landlord has the right to enter the property at any time without the tenant’s consent’.
It is important to be aware that even though landlords have the rights to amend their renter’s agreement contract by adding clauses, the statutory rights laid down in the Housing Act 1988 and any other relevant legislation are always the dominant regulations and can never be written out or superseded by those added into a written or oral agreement by the landlord.
With this in mind, there could be a difference between what the tenancy agreement states and what rights the tenancy agreement is actually protecting. Some unprofessional landlords can claim that an Assured Tenancy is actually an Assured Shorthold Tenancy, or that the agreement isn’t a renters agreement but a ‘licence to occupy’ which are used for lodgers. If for whatever reason you are unsure as to which agreement you have and whether it is valid, contact an expert or the Citizens Advice Bureau.
What About Verbal Contracts or “Gentlemen’s Agreement”?
Tenants should be wary of landlords who try to persuade them to enter into a verbal contract or “gentleman’s agreement”, saying it’s just as good as a written agreement. This is not the case, having a formal, written renters contract in place gives the tenant a lot more protection in case things go wrong. Written agreements also allow the landlord a lot more protection too should they need to evict a nightmare tenant.
If you only have an oral agreement with your tenants or landlord, it will be incredibly difficult to prove if and when a breach of contract has taken place. This puts you in a very vulnerable position and can make eviction proceedings, repossessions, return of deposits and liability for any damages a real nightmare to handle further down the line.
False Identities and Rental Contracts
It is incredibly important that you verify both a landlord’s and tenants’ identity before you sign a tenancy agreement. If the tenants or landlord put forward a fake name and manage to get a false identity written into the tenancy agreement it will most likely void the contract and mean that the terms of the agreement are not enforceable should a dispute arise.
One of the best ways that a landlord can verify their tenant’s identity is to conduct a thorough and professional tenant referencing check on any potential renter before they agree to the tenancy. A tenant referencing check will verify the applicant’s identity and will usually include the necessary checks to comply with Right To Rent legislation which has made landlords responsible for verifying the legal immigration status of tenants. TheHouseShop offer fast, detailed and effective tenant referencing checks designed specifically for private landlords, starting from just £9.99. Find out more about tenant referencing here.