Is A Verbal Tenancy Agreement Legally Binding?

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.

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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.