(5) Nothing in this section (or in section 14 below) affects the right of the landlord and the tenant under an assured tenancy to vary by agreement any term of the tenancy (including a term relating to rent).

There are certain variations that will operate as a surrender and re-grant of a tenancy which include:

[amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']

• Where the extent of the demise is increased [Well Barn Farming v Backhouse [2005] 3 E.G.L.R. 109]
• Where the length of the term is increased [ibid]
• The substitution of one suite of rooms for another operates as a surrender and re-grant. [Giles v Spencer (1857) 3 C.B.N.S. 244]

However, terms that do not operate as a surrender and re-grant but instead are a simple continuation of the existing tenancy include:

• A mere increase in rent does not operate as a surrender and re-grant [Doe d. Monk v Geekie (1844) 5 Q.B. 841; Jenkin R. Lewis v Kerman [1971] Ch. 477; Friends Provident Life Office v British Railways Board [1996] 1 All E.R. 336]

I would hold … In the absence of an increase in the extent of the premises demised or of the term for which they are to be held, both of which would change the legal estate, I can see no reason why the lessor and assignee could not achieve the changes they desired in the terms of the lease without the law implying its surrender and a re-grant for the remainder of the term of the lease. [Beldam L.J. Friends Provident Life Office v British Railways Board [1996] 1 All E.R. 336]

• A reduction in rent is no surrender [Crowley v Vitty (1852) 7 Exch. 319; Buttery v Pickard (1946) 174 L.T. 144.][/amember_protect]

By virtue of paragraph 1(1) of Schedule 1 to the Trusts of Land and Appointment of Trustees Act 1996 any purported grant of a legal estate to a minor will not be effective to pass the legal estate, but will operate as a declaration that the premises are held in trust for the minor.

This essentially means if a landlord grants a tenancy to a minor, then any purported tenancy is held in trust by the landlord for [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']the occupier who becomes the beneficiary to the trust. In order to end the occupation, the landlord must first end the trust which can be very complex.

The Court of Appeal had to consider how a tenancy given to a minor could be ended. In Hammersmith and Fulham London Borough Council v Alexander-David [2009] EWCA Civ 259, The claimant aged 16 applied to the local authority for accommodation under the Housing Act 1996 because she was homeless. The council discharged its duty and entered an agreement on its standard form for adults, where the parties were referred to as landlord and tenant, which gave her a tenancy of the premises.

It was held that a landlord with full capacity to grant a legal tenancy and who granted a tenancy without any express qualification to the effect that something less than a legal tenancy was being granted could not subsequently say that what he had granted was not a legal tenancy but an equitable tenancy. Paragraph 1(1) of Schedule 1 to the Trusts of Land and Appointment of Trustees Act 1996 therefore applied to the tenancy granted to the claimant.

For so long as the council held the premises in trust under that Act for the claimant it could not lawfully destroy the subject matter of the trust by serving notice to quit on her.

See here for the Times report on this case.

[/amember_protect]

Before you begin marketing the property, you must have an Energy Performance Certificate (EPC). This will be given to “prospective tenants” normally when you are viewing the property. Once you have placed a firm order for an EPC, you may market the property whilst the EPC arrives.

Further information on EPCs is available via this article

Members of the Guild of Residential Landlords can obtain an EPC at a discounted rate by clicking here

Inventory

In addition, [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']whilst the property is empty (or about to be empty) you could take this opportunity to create an inventory. If you are taking a high value deposit, it may be worth considering a specialist inventory clerk who will both perform a check in inventory (when the tenants move in) and a check out inventrory (comparing the property when they move out). This provides independant proof of the condition of the property before and after the tenancy.

Alternatively, you can produce your own inventory, this can include photographs of the property and video.

Members of the Guild may download an inventory template (£12.00)

[/amember_protect]

Members of the Guild of Residential Landlords can credit check the prospective tenant and guarantor using the tenant vetting service. This will check CCJs, Electoral Roll, Bankruptcy etc. and costs £4.95 + VAT for a standard check. Alternatively, there are several credit and referencing organisations on the internet.

Remember, the most important thing about a credit check is [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']finding the prospective tenant and guarantor. We would rather take on a tenant who has had a previous CCJ which they have paid off as opposed to a tenant whom we could not find. More often than not, when you can’t find a tenant, it usually means they are providing false details to ensure you can’t find them!

Check on-line that guarantor is a home-owner at www.landregisteronline.gov.uk. This costs £4.00 and is well worth the small fee.

Check with previous landlord for reference if possible but be wary if it is a current landlord as the landlord may give a good reference if he is trying to get rid of the tenants quickly!

Check with other references the prospective tenant has provided, in particular employers. If possible, you should always contact references by telephone. It’s amazing what you can sense by the tones of voice in these situations. Try and get confirmation of references in writing.

Be wary if a tenant provides written references themselves as they often produce their own and give false signatures (we have had this on many occasion.) To be honest though, as long as you at least credit check and phone one of the references and are happy that should be enough, in particular because you will have the back up of a home owning guarantor.

Landlord should start a new file for each tenancy and keep all documentation relating to that tenancy together. Records must be kept for at least six years and longer is recommended.

[/amember_protect]

In University of Plymouth v European Language Centre Ltd [2009] EWCA Civ 784 the Court decided that in legally binding e-mail correspondence it is essential to have an unequivocal offer and acceptance, together with agreed contract terms.

In the case itself , the parties had been in a contractual relationship since 1998. The University of Plymouth had provided European Language Centre Ltd (ELC) with student accommodation and teaching facilities, by a series of annual written contracts. Until 2005, previous contracts had recognised both parties’ intention to continue the contractual relationship in the coming year. However, the 2005 contract contained no reference to contractual obligations for the coming year, 2006.

During 2005, the parties had discussed by e-mail correspondence, the possibility of the University reducing the number of student accommodation available for ELC to use. ELC did not initially reply, but then in later e-mail correspondence expressed that they found the reduction unacceptable and the parties did not therefore formally produce or agree to a contract. ELC later alleged the University was in breach of contract by failing to provide the reduced beds and submitted that that the email of May 2005 constituted an offer of a reduced number of beds, which it had accepted and relied upon.

The Court noted that the parties had established a degree of mutual trust since 1998, and that it was usual for negotiations to be formally concluded by an annual written contract. The Court therefore held that the e-mail correspondence was lacking in detail and considered that it did not amount to an offer nor a clear acceptance. The Court held that an acceptance must be communicated in a way that objectively sets out on what basis the acceptance was being given and based on the facts before them ELC had done nothing which amounted to acceptance, either by words or conduct. The parties’ comments within the exchange of emails together with the previous contracts were not enough to determine that an unequivocal offer and acceptance had been made.

This decision emphasises the importance of the four essential elements which must exist for there to be a legally binding contract that is; offer, acceptance, consideration and an intention to create legal relations.

Agents are therefore advised to ensure that there is clear communication with Landlords and Tenants and ideally all negotiations should be concluded by written contracts which are clear and free from ambiguity. We have noted that many agents automatically place the phrase ‘Subject to Contract’ within their signature which will have the effect of preventing any contract being concluded this way. However, they should ensure that they obtain instructions and clarify that they or their clients do not want to be bound by informal email or telephone exchanges and should not assume that this is the best position.

I advertised a property at £450pcm. The particulars showed this amount and so did the advert. On signing the tenancy, the tenant also paid £450 first months rent and £450 deposit. The following month, £357 rent was paid instead of £450 along with a letter pointing out that the tenancy agreement stated the rent was £357.00pcm and this was all they were going to pay from now on. On investigation, I have found I have made a mistake on the tenancy agreement and the rent does state £357pcm when it should have said £450. The tenancy is for twelve months.

A:

Crucially, in this case, it seems there is a good amount of evidence showing that both parties intended the rent to be £450. In particular, this is evidenced by the tenant paying £450 at the commencement of the tenancy.

Unfortunately though, getting this put right is not going to be simple.

Rectification

Rectification is an equitable remedy by which the court corrects instruments in order to give effect to the real bargain between the parties. Courts of Equity do not rectify contracts; they may and do rectify instruments purporting to have been made in pursuance of the terms of contracts. [Mackenzie v Coulson (1869) L.R. 8 Eq. 368, 375, per James V.C.] Thus what is corrected is not the bargain, but the expression of the bargain.

In order for a claim to rectification to succeed[amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest'] on the ground of a common mistake it must be shown by convincing evidence [Joscelyne v Nissen [1970] 2 Q.B. 86, 98; Lansdown Estates Group Ltd v TNT Roadfreight (UK) Ltd [1989] 2 E.G.L.R. 120; London Regional Transport v Wimpey Group Services Ltd (1987) 53 P. & C.R. 356; Brimican Investments v Blue Circle Heating [1995] E.G.C.S. 18.]:

(1) that the parties to the lease had a continuing common intention in regard to the terms of the lease;

(2) that intention continued up to the moment when the lease was executed;

(3) that the common intention was manifested by some outward expression of accord;

(4) that the lease as executed does not represent the true intention of the parties at the moment of the execution of the lease;

(5) that the lease, if rectified would represent their true intention at that time. [ibid.]

The outward expression of accord may be shown by estate agents’ particulars [Central & Metropolitan Estates v Compusave [1983] 1 E.G.L.R. 60.]

The remedy of rectification requires some mistake in the document sought to be rectified.  Rectification is usually granted where words in a lease have been wrongly omitted or wrongly included. [e.g. Cowen v Truefitt Ltd [1899] 2 Ch. 309 (parcels wrongly described).]

The fact that the mistake was negligent is no bar to relief [Weeds v Blaney [1978] 2 E.G.L.R. 84, CA.] ; nor is a clause which states that the written agreement is the parties’ entire agreement. [JJ Huber (Investments) v Private DIY Co [1995] E.G.C.S. 112.]

Actions for rectification are assigned to the Chancery Division. [Supreme Court Act 1981 s.61; Sch.1.] However, any other Division of the High Court may treat an instrument as rectified if the defendant to an action sets up facts which, in the Chancery Division, would entitle him to have it rectified. [ibid.] A claim for specific performance may be joined in the same action as a claim for rectification.

Correction of errors by construction

In some cases the court is able to correct errors as a matter of construction, without recourse to the remedy of rectification. In order to do so the mistake must be clear. [Wilson vWilson (1854) 5 H.L. Cas. 40.]

The principle applies “where a reader with sufficient experience of the sort of document in issue would inevitably say to himself ‘Of course X is a mistake for Y.’ ” [East v. Pantiles (Plant Hire) (1982) 263 E.G. 61.] Thus the court may correct an obvious misnomer of one of the parties [Nittan (U.K.) v. Solent Steel Fabrications [1981] 1 Lloyd’s Rep. 633.] ; or an obviously erroneous reference to a clause in the lease. [Booker Industries Pty. v. Wilson Parking (QLD) Pty. (1982) 149 C.L.R. 600.]

However, The law of construction excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification [para 11.007 Woodfall Landlord & Tenant].

Therefore, an application for the correction of the error as a matter of construction is most likely not suitable in this case because the key evidence is the adverts and particulars which were essentially the negotiations leading to the execution of the tenancy.

What next

The Chancery Division is part of the High Court and the case will be dealt with by a senior judge. Although the Guild can assist, it would be very advisable to employ the services of a solicitor. Hopefully with an adequate letter before action outlining all the evidence would put off a tenant continuing or defending the claim because there could be high costs involved if they were unsuccessful.

The problem of course is a question of costs. Claims in the High Court such as this can be expensive so a balance will need to be struck over the value of claim.

A cheaper “gamble” would be to take the matter to either the small claims court or issue a section 8 notice on Ground 10 (any amount of rent arrears). This would be issued on the hope that the court would look at the case and make an order to the effect that the full rent is “lawfully” due. Of course, a savvy judge may dismiss the claim on the basis that the tenancy must first be rectified as discussed above. However, because of the relative low cost of brining these proceedings as against a claim for rectification, it may be worth the gamble.

Note: If an agent has made this error, it is our opinion that the landlord will still be entitled to be paid by the agent the full proper rent as this would have been a mistake made by the agent that shouldn’t affect the landlord.

[/amember_protect]

This is never advisable but yes it is possible [s54 Law of Property Act 1925]

53.- Instruments required to be in writing.

(1) Subject to the provision hereinafter contained with respect to the creation of interests in land by parol-

(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;

…

54.- Creation of interests in land by parol.

(1) …

(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.

A lease for three years or less at the best rent which can reasonably be obtained without taking a fine may be in writing or parol (verbal)as the parties please. [See Ryley v Hicks (1713) 1 Str. 651; Bolton(Lord) v Tomlin (1836) 5 A. & E. 856; Wright v Macadam [1949] 2 K.B. 744.] A lease for more than three years from the making [Rawlins v Turner (1699) 1 Ld.Raym.736; Kushner v Law Society [1952] 1 K.B. 264.]must be by deed (and in writing). This includes a lease granted for a term exceeding three years, but determinable within three years. [Kushner v Law Society, ante.]

Will a tenancy made by parol (verbal) be an assured shorthold tenancy?

This will depend on the date the tenancy was granted. [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']Clearly if the tenancy was created before the Housing Act 1988 came into force, it will be a tenancy subject to whatever legislation was in at the time (normally Rent Act 1977 or Rent Act 1964). However, if the tenancy was created on or after the coming into force of the Housing Act 1988 (15 January 1989) then there are two possibilities depending on the date.

Tenancy created between 15 January 1989 and 27 February 1997.

Section 1 Housing Act 1988 will apply which states that all tenancies created are assured subject to certain conditions. Clearly it was possible to create an assured shorthold tenancy during this time but not verbally because the section 20 notice was required in writing (section 20 notice was the old style way of granting an assured shorthold tenancy and informing the tenant it was to be at least 6 months etc.)

The main criteria of importance for a tenancy to be assured is that a separate dwelling was let to an individual and it is their only or principle home. If these 3 requirements are met, the tenancy will be assured. (If not, it will most probably be a common-law contractual tenancy)

1.- Assured tenancies.

(1) A tenancy under which a dwelling-house is let as a separate dwelling is for the purposes of this Act an assured tenancy if and so long as-

(a) the tenant or, as the case may be, each of the joint tenants is an individual; and

(b) the tenant or, as the case may be, at least one of the joint tenants occupies the dwelling-house as his only or principal home; and

(c) the tenancy is not one which, by virtue of subsection (2) or subsection (6) below, cannot be an assured tenancy.

(2) Subject to subsection (3) below, if and so long as a tenancy falls within any paragraph in Part I of Schedule 1 to this Act, it cannot be an assured tenancy; and in that Schedule-

(a) “tenancy” means a tenancy under which a dwelling-house is let as a separate dwelling;

…

Tenancy created 28 February 1997 to present day.

Section 1 detailed above still applies subject to the criteria discussed (tenant individual, only or principle home etc.) However, the Housing Act 1996 changed things and removed the requirement of a section 20 notice. Therefore, only a tenancy need be granted without any notice prior to it’s grant and it will be an assured shorthold tenancy. It is this act that also removed the requirement of a minimum 6 months fixed term. Section 96 Housing Act 1996 inserted section 19A into the Housing Act 1988. The position now is:

19A. Assured shorthold tenancies: post-Housing Act 1996 tenancies.

An assured tenancy which-

(a) is entered into on or after the day on which section 96 of the Housing Act 1996 comes into force (otherwise than pursuant to a contract made before that day), or

(b) comes into being by virtue of section 5 above on the coming to an end of an assured tenancy within paragraph (a) above,

is an assured shorthold tenancy unless it falls within any paragraph in Schedule 2A to this Act.

Does a tenant have the right to receive a written statement containing the terms of a tenancy if a verbal tenancy has been granted?

Yes [s20A Housing Act 1988 as inserted by s97 Housing Act 1996]. A landlord must supply after a written request by a tenant, a written statement of terms which contain the date the tenancy began, the rent payable, any provision for a rent increase and if there is a fixed term, the length of the fixed term. The landlord must supply this information within 28 days of a request, and only has to do this once if there has been no changes and doesn’t have to provide this statement if the tenancy is evidenced in writing (therefore only applies to verbal tenancies).

20A.- “Post-Housing Act 1996 tenancies: duty of landlord to provide statement as to terms of tenancy.

(1) Subject to subsection (3) below, a tenant under an assured shorthold tenancy to which section 19A above applies may, by notice in writing, require the landlord under that tenancy to provide him with a written statement of any term of the tenancy which-

(a) falls within subsection (2) below, and

(b) is not evidenced in writing.

(2) The following terms of a tenancy fall within this subsection, namely-

(a) the date on which the tenancy began or, if it is a statutory periodic tenancy or a tenancy to which section 39(7) below applies, the date on which the tenancy came into being,

(b) the rent payable under the tenancy and the dates on which that rent is payable,

(c) any term providing for a review of the rent payable under the tenancy, and

(d) in the case of a fixed term tenancy, the length of the fixed term.

(3) No notice may be given under subsection (1) above in relation to a term of the tenancy if-

(a) the landlord under the tenancy has provided a statement of that term in response to an earlier notice under that subsection given by the tenant under the tenancy, and

(b) the term has not been varied since the provision of the statement referred to in paragraph (a) above.

(4) A landlord who fails, without reasonable excuse, to comply with a notice under subsection (1) above within the period of 28 days beginning with the date on which he received the notice is liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(5) A statement provided for the purposes of subsection (1) above shall not be regarded as conclusive evidence of what was agreed by the parties to the tenancy in question.

(6) Where-

(a) a term of a statutory periodic tenancy is one which has effect by virtue of section 5(3)(e) above, or

(b) a term of a tenancy to which subsection (7) of section 39 below applies is one which has effect by virtue of subsection (6)(e) of that section,

subsection (1) above shall have effect in relation to it as if paragraph (b) related to the term of the tenancy from which it derives.

(7) In subsections (1) and (3) above-

(a) references to the tenant under the tenancy shall, in the case of joint tenants, be taken to be references to any of the tenants, and

(b) references to the landlord under the tenancy shall, in the case of joint landlords, be taken to be references to any of the landlords.”[/amember_protect]

Abstract: Where a demise consisted of a corner shop with accommodation above, and the shop was found to have been occupied for the purposes of a business, the entire demise was subject to the Landlord and Tenant Act 1954 Part II . T was tenant of premises which had the appearance of a corner shop with accommodation over. When L purported to give T notice of the termination under Part II of the Landlord and Tenant Act 1954, T did not apply for a new tenancy under s.29 of the Act, but contended instead that he had never run a business from the premises and was accordingly a residential tenant and protected by the Rent Act 1977 . The judge decided upon all the evidence that T had for a material and significant time up to the issue of proceedings occupied the shop for business purposes; and he accordingly made an order for possession of the demised premises. On appeal T argued, inter alia, that possession should not in any event have been ordered of the accommodation above the shop.

Held, [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']dismissing T’s appeal, that (1) s.23(1) provides that Part II of the 1954 Act applies to premises part of which are used for the purposes of a business carried on by the tenant; and that, having found the shop to have been occupied for business purposes, the judge had thus correctly treated the entire demises as subject to Part II of the 1954 Act; (2) T’s other grounds of appeal failed.[/amember_protect]

It is very much a personal choice as to whether a landlord grants a single joint tenancy or multiple tenancies on a per room basis and most landlords have their own preferences. Below is some summarised pros and cons.

Further useful details on joint tenancies is available in Guidance note 19

Single Joint Tenancy – Advantages

If one tenant leaves university during the term, the council tax exemption for students can be a problem. With a joint tenancy, the tenants will be jointly responsible for the council tax (assuming it is in the tenancy agreement), so it is not of concern to a landlord.

If one tenant fails to pay the rent, the others must make up the difference.

The deposit will be treated as one deposit which means less paperwork and fewer deposits to register.

Single Joint Tenancy – Disadvantages

If one tenant is noisy, messy and fails to pay the rent, when instigating possession proceedings by service of notices etc a landlord must serve notice on [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']all tenants not just the one causing problems.

Because students have a longer than normal fixed term (between 10 or 12 months) if one student fails to pay the rent, it can take a long time before there is two months arrears because the calculation is taken of the entire rent, not just the single students portion which makes it more difficult to serve a section 8 notice on the grounds of rent arrears. A two months section 21 notice can not be served to expire before the expiry of the fixed term.

If choosing the admin fee option instead of a deposit, it is not so easy to charge £100 – £200 per tenant when there is only one tenancy.

Many single tenancies per room – Advantages

The landlord has complete control over each individual tenancy and if one student fails to pay the rent, possession proceedings for 2 months arrears can be instigated quicker.

If choosing admin fee method instead of taking a deposit, it is easier to charge individual tenancies an admin fee.

Many single tenancies per room – Disadvantages

The house will be deemed as a House in Multiple Occupation for Council Tax purposes (do not confuse this with the normal definition of an HMO under Housing Act 2004. The two are different definitions.) This has the result that the landlord will always be liable for Council Tax, so if a student becomes no longer exempt, the landlord will still have to pay the council tax.

Every deposit will have to be individually protected which would mean a lot of paperwork and if using one of the insurance schemes, very expensive!

Guild opinion

It’s difficult to have an absolute opinion on which method, however if we are really pushed one way or the other, on balance the joint tenancy is probably best. Mainly because there is less paperwork and it reduces council tax issues. However, just because we say that, single tenancies have many advantages too.[/amember_protect]

One way to avoid the scheme for student lettings would be to grant an assured tenancy rather than an assured shorthold.

However, before we go on to the advantages of this, the massive disadvantage is that an assured tenancy grants a tenant security of tenure and you can NEVER serve a section 21 (two months) notice. Essentially therefore, [amember_protect levels='keywee' user_action='error' user_error='amember_error_default_user' visitor_action='error' visitor_error='amember_error_default_guest']you can never ever ask your tenant to leave without a reason.

However, when did you last need to serve notice on a student? The whole point, is that students never stay on after the term. In any event, you can’t serve a two months no fault notice to expire before the fixed term has ended on an assured shorthold tenancy, so the only time this would be missed is if a student refused to move.

What if a student did this? Well simply put, he would have to pay the rent in full! Failure to do so will allow the landlord mandatory possession on the grounds of rent arrears.

The best way to grant an assured tenancy would be on a single joint and several tenancy. This way, if one of the students decided to be difficult and failed to leave when all the other students had, he would have the rent of the entire house to pay, often over £1000 per month. This would soon rise to two months arrears, when a landlord would be able to serve a section 8 16 days notice.

Full guidance on granting an assured tenancy is available in guidance note 40[/amember_protect]