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Why your tenancy agreement is misleading – the secret clauses that you don’t know about

Hoca

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Reading a tenancy agreement
This post applies mainly to English tenancy agreements, but I give a few comments on Welsh occupation contracts below.


England
When a landlord (in England) gives a tenant a tenancy agreement, that agreement does not necessarily tell you the whole picture.

There may be whole areas of law which the tenancy agreement does not mention but will nevertheless apply.

There may also be terms written down in the agreement which don’t actually apply to you.

I know – it’s very confusing. Let’s take a closer look

Things that apply whether the tenancy agreement says so or not​


Because people’s homes are important, there are a lot of laws and regulations that have been passed to protect tenants.

As these sometimes involve the landlords in expense, there wouldn’t be much point in having them, if landlords could exclude them just by leaving them out of the written tenancy agreement.

So these laws specifically provide that they will apply whether or not they are written down in the tenancy agreement. Even if the landlord and tenant agree between themselves that they will not apply!

Here are the most important laws and regulations which cannot be excluded:

  • The landlords’ repairing obligations – These are set out in section 11 of the Landlord and Tenant Act 1985. These specifically say that the landlord cannot exclude them if the term of the tenancy is for under seven years.
  • The fitness for human habitation rules – These are set out in section 9a and 10 of the Landlord and Tenant Act 1985. Again, they cannot be excluded by landlords from their tenancy agreements.
  • The gas regulations – These are the regulations under which landlords have to get the appliances inspected and provide a certificate to the tenant
  • The tenancy deposit regulations – These were amended in April 2012, and 2015 and the rules have been discussed elsewhere on this site.

There are also some ‘common law’ rules which apply. These are not set out in any act, but they are part of the legal rules which have developed over the centuries. Here are two:

  • The covenant of quiet enjoyment – This is fundamental to a tenancy and is the right for the tenant to be left in peace (it is nothing to do with being noisy or enjoying yourself).
  • Notices to quit – There are various rules relating to notices to end tenancies, which are part of the common law. Some of these have been specifically excluded. For example, a landlord cannot and an assured shorthold tenancy by an old-style notice to quit. However, tenants can. Indeed, if they to end a periodic tenancy, they will (unless the tenancy agreement provides otherwise in a fair way) have to do this . Which means serving a notice on the landlord that complies with the old common law rules (basically that it must be for a complete period and end at the end of the next complete period after service).

Here are some things that may be in a tenancy agreement but which are ‘void’​

  • Agreements to exclude the repairing or fitness for human habitation covenants.

If a landlord puts in his tenancy agreement clauses saying that the tenant must do ALL the repairs to the property and get the gas appliances checked himself. This will, as we saw above, be void.

  • ‘Unfair’ clauses.

There are also ‘unfair terms’ regulations, now part of the Consumer Rights Act 2015, which say that if a clause is ‘unfair’ it will be void and unenforceable.

So as an example, if there is a clause which says that the tenant must pay the landlord a penalty payment of £500 for every day the rent is paid late – this will be ‘unfair’ and unenforceable.

  • Inapplicable clauses

Sometimes a clause may not apply simply because it does not apply to the type of tenancy or the property concerned. One obvious example is a clause which provides for the tenant to look after the garden where there is no garden.

Another example is a clause which provides for ‘forfeiture’ of an assured shorthold tenancy. As the Housing Act 1988 specifically says that forfeiture does not apply to ASTs.

We leave these clauses in just in case the tenancy ever loses its AST status (when they may be needed). But in the meantime, they can be misleading.

Wales
Occupation contracts in Wales​


Since the Renting Homes (Wales) Act 2016 came into force, Welsh housing law has changed. Now all Welsh ‘occupation contracts’ (the new term for all tenancies and licenses that fall within the act’s provisions) have been subject to mandatory ‘prescribed clauses’.

These are all set out in the Welsh model contracts.

The model contracts are not, in fact, suitable for landlords to use unamended (contrary to the impression given by the Welsh government guidance). This is because they omit many clauses that landlords will require. For example, pets clauses, deposit clauses and clauses requiring rent to be paid in advance.

What the model contracts actually are is a convenient list of all the prescribed clauses that need to be included in Welsh occupation contracts.

However, this does mean that all relevant Welsh law must now contained in the Welsh occupation contracts. Prescribed clauses cannot be omitted, just amended.

If the rules permit amendment, that is. Some of the prescribed clauses cannot be amended at all. Others can only be amended if they are amended in a way that favours the contract holder.

Conclusion​


A tenancy agreement is supposed to be a tenant’s guide to how his tenancy will work. But under the current system (in England), if he is given a poorly drafted tenancy agreement, there may be a whole sheaf of laws and obligations he has no way of finding out about. Unless he studies landlord and tenant law.

This is clearly most unsatisfactory. The Landlord Law tenancy agreements attempt to mitigate this.

In Wales, the situation is better in part, as all the relevant rules are at least contained in the prescribed form of Welsh occupation contract.

So, on the face of it, the Welsh occupation contracts are no longer ‘misleading’ in the way that many English tenancy agreements are.

However, they are so long and (mainly due to the extensive cross-referencing) so hard to read that many may think that they might as well be! The Landlord Law versions do what they can insofar as we have been able!

It is unlikely that the Welsh legislation will be amended for some time to come, as it will take a while for the existing rules to ‘bed down’.

In England, the law is due to be changed at some stage by the Renters Reform Bill when it is passed into law. It remains to be seen what, if any, rules are changed as regards the form of English tenancy agreements.

The post Why your tenancy agreement is misleading – the secret clauses that you don’t know about appeared first on The Landlord Law Blog.
 
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