Is a Verbal Tenancy Agreement Legally Binding?

verbal tenancy agreement

The simple answer is “yes”, a verbal tenancy agreement is as legally binding (reference case: Johnson v. Patry) as a written tenancy agreement, however, we would never advise you enter into one.

What’s the difference between a written and verbal tenancy agreement?

We are often asked this question by our landlords, “Do I really need a written tenancy agreement? As I know the tenants personally, could I not just agree on it verbally?”

In order for a verbal tenancy agreement to exist it must have three essential elements;

  • an offer
  • an acceptance of the offer
  • some payment – known as the legal term consideration

If these three elements exist, then a verbal tenancy agreement can be created. This contract is binding on all parties involved.

There are other elements to consider:

  • Both parties must agree to be legally tied to the tenancy agreement
  • Both parties are capable of making an agreement i.e. not under the age of 18, drunk or a person with a developmental disability.
  • Both parties must be acting freely and not under duress
  • The contract being made cannot be contrary to law

It is advised from a professional perspective that a written tenancy agreement is created to avoid misinterpretation.

By having a well-constructed tenancy agreement which outlines the tenant and landlords’ responsibilities – such as pets not being allowed or no smoking in the property – any deposit disputes further down the line are avoided.

How to avoid creating a verbal tenancy agreement

It is very important to document all communication between a landlord and a tenant.  If a verbal contract is created and a tenant has a problem down the line, they could argue that they never accepted the terms of the contract.

If you are discussing a potential let or renewal of a contract, you be careful not to accidentally create a verbal tenancy agreement.

You can avoid this by using the words ‘Subject to Contract’ on any correspondence relating to potential lets and speaking with prospective tenants.

Permitted Occupier clause

Download and insert the clause into your own tenancy agreement.

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Where can I get a professional tenancy agreement?

All our rental plans include digital tenancy agreements that are professionally drafted by our expert team. All paperwork is sent online, safely secured and kept up-to-date wit the latest lettings legislation.

Take care of all your landlord needs with our low-cost fixed-fee rental plans. Learn more.

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