06 July 2023
A lease, often called a tenancy in the lettings industry, is an agreement between a landlord(s) and a tenant(s) for the tenant(s) to live in a property for a period of time, subject to certain conditions placed on both parties. It is a contractual document.
There are three elements of a lease:
A person may not be seen as a tenant even though they are staying at a property with exclusive possession and paying rent. If, for example, there was an agreement between friends and family with no intention of creating a tenancy, the person would not be seen as a tenant.
If a property owner allows someone to live at their property e.g. a lodger, without granting them exclusive possession, the lodger occupies under a licence, rather than a lease or a tenancy.
Any land-related transactions for more than a three year period, including residential tenancies, must be created by a deed.
Tenancies of three years or less can be created orally. As residential tenancies are often for less than three years, great care must be taken not to enter into an oral contract. Always use the words ‘subject to contract’ in any correspondence relating to potential lets.
Tenants named on the tenancy are considered ‘jointly and severally liable’ for the obligations of the tenancy. This means each tenant is fully responsible for all conditions of the agreement.
Leases may contain covenants - promises made by one party to another, e.g. to allow the tenant ‘quiet enjoyment’ – giving them the right to live in the property without interference from the landlord or anyone else. Even if this was not specifically included in the tenancy agreement, it would be considered an ‘implied right’.
Categories: Residential Lettings Legal Aspects of Lettings