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.
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.
