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The Essential Guide to Tenancy Agreements
28 – 30 minutes to read
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1. What is a tenancy agreement?
A tenancy agreement is a really important document as it sets out the rules that (largely) govern your tenancy.
By way of background information:
There are two main types of ownership of land (or property) in England:
- Freehold, and
- Leasehold
A freeholder normally owns the property indefinitely. A leaseholder is entitled to use and occupy the property for a specified period of time.
The person who grants the lease may be the freeholder or another leaseholder. They are usually called the landlord, while the person to whom the lease is granted is called the tenant.
A tenancy is a type of lease. The word ‘tenancy’ is generally used for shorter residential lettings, while the word ‘lease’ is more commonly used for long-term arrangements. The period for which a lease or tenancy lasts is called the ‘term’.
On this site we generally refer to
- A lease where the property is let for a substantial fixed term. Leases granted for more than seven years will normally need to be registered with HM Land Registry, and some of the legislation applying to short residential tenancies may not apply to them.
- A tenancy where the property is let for a shorter period or on a periodic basis. Most private assured tenancies are now periodic tenancies, although some other types of tenancy can still have a fixed term.
Our article here describes the difference between fixed-term and periodic tenancies. The Renters Guide is principally concerned with short residential tenancies, so we will not be discussing long leases in this article.
Tenancy terms and conditions
A tenancy (or lease) is different from freehold land as it contains two important features:
- It gives the tenant a legal interest in the property, and
- It creates a contractual relationship between the landlord and the tenant
The terms of that contract make up the tenancy agreement. They may be recorded in a written document, but the tenancy agreement is not necessarily limited to what that document says.
The terms may include:
- ‘Core terms’ – such as the names of the parties, the property and the rent payable
- Terms agreed between the parties (insofar as these are permitted in law – see further on this below)
- Terms implied by legislation – for example the statutory repairing obligations
One of the problems with a written tenancy agreement is that it may be misleading. For example
- Some terms may be unenforceable under the unfair terms rules in the Consumer Rights Act 2015
- Other terms may be unenforceable under the Tenant Fees Act 2019
- Terms implied by statute may not be set out in the tenancy agreement
This is one reason why the Renters’ Rights Act 2025 requires landlords of relevant private-sector assured tenants to provide them with specified information about their tenancy in writing.
The information can be included in the tenancy agreement or provided separately. We discuss this further below.
2. Does a tenancy agreement need to be in writing?
In most cases a ‘legal interest in land’ must be created or transferred by deed. For example
- When a property is sold, the document transferring ownership must be signed as a deed
- A lease for a term of more than three years must normally be created by deed
However, section 54 of the Law of Property Act 1925 (the Act which established much of the framework of our modern land law) makes an exception for certain leases and tenancies lasting no more than three years:
54 Creation of interests in land by parol.
(1) All interests in land created by parol and not put in writing and signed by the persons so creating the same, or by their agents thereunto lawfully authorised in writing, have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only.
(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.
So what does that mean?
‘Parol’ is an old-fashioned legal word which, in this context, means orally rather than in writing.
Section 54(1) sets out the general rule that interests in land must be created in a written document signed by the person creating them.
However, section 54(2) makes an exception where:
- The tenancy takes effect immediately
- Its term does not exceed three years
- It is granted at the best rent which can reasonably be obtained, and
- No ‘fine’ is paid
A ‘fine’ in this context means a lump sum paid for the grant of a lease. For example, someone may pay a substantial sum to acquire a long lease of a property as well as paying a smaller annual ‘ground rent’.
This means that a short tenancy can be created without a written agreement. For example, a tenancy may arise when a landlord allows someone to move into a property and accepts rent from them.
However, the precise legal effect will always depend on what was agreed and what subsequently happened.
The Renters Rights Act 2025
One of the problems addressed by the Renters’ Rights Act 2025 was that some landlords failed or refused to give their tenants a written tenancy agreement.
Section 12 therefore requires landlords of most assured tenants to provide a written statement containing specified terms and information about the tenancy. For a new tenancy, this will normally need to be given before the tenancy is entered into.
The required information can be included in a written tenancy agreement, and in most cases this will be the simplest way for landlords to comply.
Failing to provide the required written statement will not prevent the tenancy from being created. However, the landlord may be liable for a civil penalty of up to £7,000.
We look at the information which must be provided below.
3. When does the agreement become binding?
A tenancy agreement is a form of contract. Under contract law, for a binding contract to be created:
- One party must make an offer
- The other party must accept that offer
- The parties must have agreed the essential terms
- They must intend their agreement to be legally binding
- There must be what lawyers call ‘consideration’, and
- Any legal formalities which apply must be complied with
Offer and acceptance
An ‘offer’ is a clear proposal made on terms which the person making it is prepared to be bound by if it is accepted.
So if a landlord makes an offer by providing a tenancy agreement, there must then be an unqualified acceptance of that offer. If the tenant asks to change any of the terms, this will normally amount to a counter-offer rather than an acceptance.
For example, a landlord may offer to let a particular property to a tenant from an agreed date at an agreed rent. If the tenant accepts those terms without proposing any changes, there will be offer and acceptance.
However, the parties will not necessarily be legally bound at that point. It will also be necessary to consider:
- Whether all the essential terms (for example in the tenancy agreement) have been agreed
- Whether the parties intended to be bound immediately
- Whether the agreement was subject to references, right to rent checks or some other condition
- Whether the negotiations or documents were marked ‘subject to contract’, and
- Whether all the legal formalities have been complied with
Determining exactly what amounted to the offer and whether it was accepted is not always straightforward.
For example, a draft tenancy agreement sent to a prospective tenant may be an offer, but it may instead be merely a draft which is not intended to become binding until it has been signed by everyone.
Consideration
‘Consideration’ means that each party promises to give something of value. In the case of a tenancy:
- The landlord agrees to give the tenant the right to occupy the property, and
- The tenant agrees to pay the rent and comply with the tenancy terms
The rent does not necessarily have to have been paid before there can be consideration. The tenant’s promise to pay it can be sufficient.
Note also that rent does not have to be a market rent. ‘Peppercorn’ rents can be equally valid as consideration. It just needs to be something of some value.
The date of the agreement and the starting date
The date when the parties become contractually bound is not necessarily the date the tenancy begins.
For example, the landlord and tenant may sign an agreement on 1 August stating that the tenancy will begin on 1 September. They will normally become contractually bound when the agreement is completed, although the tenant’s right to occupy the property will not begin until 1 September.
However, the position can depend on the wording of the document and the circumstances in which it was signed.
Can the agreement be cancelled before the tenancy starts?
If the landlord and tenant both agree that they no longer want the tenancy to proceed, they can cancel their agreement.
However, if only one party wants to withdraw, the position will depend on whether a binding contract has already been created.
If all parties have signed the tenancy agreement
If the landlord and all the tenants have signed the agreement, they will normally be bound by it.
Neither the landlord nor the tenants can then simply change their mind. They will need the agreement of the other parties if they want the tenancy to be cancelled.
However, a document marked ‘subject to contract’ may not become binding until a later step has been completed. There may also be conditions which must be satisfied first, such as satisfactory references, or right to rent check, or a guarantor providing a guarantee.
If the landlord has signed but the tenant has not
The landlord’s signed agreement may amount to an offer to grant the tenancy. If the tenant then signs and communicates their acceptance, a binding agreement will normally be created at that stage.
However, this will depend on the wording of the document and whether any conditions remain outstanding.
In most cases, a tenancy will not be created if the tenant has not signed the tenancy agreement.
If the tenant has signed but the landlord has not
The fact that the landlord has not signed the tenancy agreement does not necessarily mean that there is no binding contract.
The provision of a completed tenancy agreement to the tenant for signature may amount to an offer by the landlord. If the tenant signs and returns it without seeking any changes, this will normally amount to acceptance of that offer.
A landlord can also act through an authorised letting agent. So the offer may have been made, or the tenant’s acceptance received, by the agent on the landlord’s behalf.
Whether a binding agreement has been created though, will depend on all the circumstances. Relevant matters will include:
- Whether the document was described as a draft or marked ‘subject to contract’
- Whether it was made clear that the agreement would not become binding until the landlord signed it
- Whether any conditions, such as satisfactory references or right to rent checks, remained outstanding
- Whether the tenant signed and returned the agreement without requesting any changes
- Whether the landlord or agent accepted the deposit or other permitted payments, and
- Whether the tenant was given the keys or allowed to move possessions into the property
If the tenant’s signature amounted to acceptance of an offer made by the landlord or the landlord’s agent, though, the landlord will not normally be entitled to withdraw merely because they have not signed the document themselves.
If the landlord then refuses to allow the tenant to move in, the tenant may be able to claim compensation for the losses caused by the landlord’s breach of contract.
If neither party has signed the tenancy agreement
If neither party has signed, there may be no binding contract, and either party may still be entitled to withdraw.
However, signatures are not always essential for a short residential tenancy. A binding agreement may have been created orally or through the parties’ conduct. For example, if the landlord has clearly agreed to let the property, the tenant has accepted the offer and the landlord or agent has acted on that basis.
Payment of a holding deposit will not normally, on its own, create a tenancy agreement. Its purpose is generally to reserve the property while checks are carried out and the tenancy arrangements are completed.
However, other payments, the handing over of keys and permission to move possessions into the property may all provide evidence that a binding agreement has been reached.
The position will depend on exactly what was said, written and done by the parties.
What if one party withdraws after becoming bound by the contract/tenancy?
Once a binding agreement has been made, neither party can simply cancel it without the agreement of the other.
If the landlord refuses to let the tenant into the property, the tenant may be entitled to compensation for the losses caused by the landlord’s breach of contract. For example, reasonable accommodation costs, storage and moving costs.
If the tenant refuses to proceed with the tenancy, the landlord may be entitled to compensation for any financial loss caused.
In practice, the landlord may look to keep the tenancy deposit. However, he is not automatically entitled to keep the whole deposit. Any deduction must reflect his actual loss and, if disputed, this will need to be established through the tenancy deposit scheme or (occasionally) the courts.
Note also that if a replacement tenant is found and moves in, the landlord cannot recover rent from both tenants for the same period. However, the landlord is not obliged to find a replacement tenant in law.
If the tenancy is an assured periodic tenancy, remember that the tenant can end it by serving a valid notice to quit after the tenancy has started. Tenants will normally have to give two months’ written notice, ending on the last or first day of a period of the tenancy.
The tenancy agreement can provide for a shorter notice period. The landlord and tenant can also agree in writing to cancel the agreement before the tenancy starts or end the tenancy earlier.
This means that the tenant’s potential liability will normally be limited.
Usually, landlords will seek to recoup their losses by keeping some or all of the tenancy deposit, although this can be challenged, particularly if the property is re-let quickly. If the landlord’s loss is greater than the deposit, they could bring a court claim for the balance, but this would be unusual.
Whether a binding agreement has been created and what compensation may be payable can sometimes be difficult legal questions. If a dispute arises, you should obtain legal advice.
4. Things to check before agreeing to rent a property
Here is a quick checklist of the main things to consider before signing up:
- Your co-tenants (if any). Are they people you trust? Remember that if you are joint tenants and one of them fails to pay their share of the rent, the landlord can normally claim it from you too.
- The property. Have you viewed it carefully? Is it in a suitable condition and does it meet your needs?
- The rent. Are you sure you can afford it? See also our article on rent.
- The bills. Which bills will you have to pay, and are you happy with the arrangements for paying them?
- The deposit. Is the landlord taking a traditional tenancy deposit or offering an alternative deposit scheme? Alternative schemes are not always favourable to tenants. See our articles on alternative deposit schemes and traditional tenancy deposits.
- The tenancy agreement. Are you happy with its terms? If you do not understand something, ask for an explanation before agreeing to it.
- Furniture and other contents. Are you happy with what is being provided and its condition?
- Other occupiers. If you will be sharing with people you do not know, have you met them and seen the shared areas?
- Promises. Has the landlord or agent promised to carry out work or provide anything? Make sure this is recorded in writing.
This is not a complete list, but it covers the main points you should consider before agreeing to rent.
See also our article on holding deposits.
5. About tenancy agreement terms
You need to be happy with the terms of your tenancy agreement, so as mentioned above, you should always read it first, and obtain legal advice if there is anything you do not understand or which bothers you.
We mentioned earlier in this article that for assured tenancies, there is specific information that must be provided to you. This is set out in regulations published under the Renters Rights Act 2025.
The information which must be provided is set out in the Schedule to the regulations. For the full details, read the schedule, but note that the information must include:
- The names of the landlord and tenant, the address of the property and the rent payable
- An address at which notices and other documents can be served on the landlord (this does not have to be the landlord’s home address)
- The date on which the tenancy starts
- Information about rent increases and the tenant’s right to challenge them
- The arrangements for paying council tax, utilities and other bills
- Information about any tenancy deposit taken
- How the tenant can end the tenancy
- How the landlord can recover possession of the property
- Information about the condition of the property and the landlord’s repairing obligations
- Information about the landlord’s obligations regarding gas and electrical safety
- Information about the rights of disabled tenants, including the right to reasonable adjustments, and
- Information about the tenant’s right to request permission to keep a pet
If you think that any of the required information has been left out, speak to your landlord or his agent and ask for it to be included.
6. The tenancy agreement cannot override the law
As mentioned above, there are some things which will be included in your contract whether or not it is written in the tenancy agreement.
We have articles which cover most of these (in addition to those already linked above):
- Rules regarding the property condition
- Our guide to rent increases
- Our guide to the fees landlords can charge
- Pets in rented properties
See also our article on your legal obligations as a tenant. And our article on guarantees.
7. Can the agreement be changed?
Before a binding agreement has been made, the landlord can withdraw a draft tenancy agreement and replace it with another.
For example, this may be done to correct an error or to include an amendment which has been agreed with you.
However, once a binding agreement has been made, the landlord cannot normally change its terms without your agreement. If there are joint tenants, they will all normally need to agree to the change.
So if your landlord asks you to sign a replacement agreement, you do not have to agree. Read it carefully and make sure you understand why the change is being requested before signing it.
Sometimes a replacement agreement will not be necessary. For example, if your landlord gives you permission to keep a pet, this can normally be recorded in a short amendment document or in an email or letter.
A tenancy term may sometimes allow a particular change to be made without a new agreement. However, the landlord must follow the procedure set out in the agreement, and a term giving the landlord an unfairly wide power to change the tenancy may not be enforceable.
Changes made by law
Your rights and obligations may also change automatically when the law changes.
New legislation may imply additional terms into your tenancy or make an existing term ineffective. This can happen even if the written tenancy agreement is never amended and neither you nor your landlord is aware of the change.
For example, the Renters’ Rights Act 2025 made significant changes to assured tenancies and implies terms dealing with tenants’ requests to keep pets.
There are also statutory procedures under which particular terms can be changed. For example, the rent under an assured tenancy may be increased using the statutory rent increase procedure, without the tenant having to sign a new tenancy agreement.
8. And finally
The fact that you have signed a tenancy agreement does not necessarily mean that all its terms are enforceable.
For example, a term which conflicts with the landlord’s statutory repairing obligations or the fitness for human habitation rules will not be enforceable. An unfair term under the Consumer Rights Act 2015 will not be binding on you either.
Landlords sometimes assume that a term buried in the ‘small print’ must be enforceable just because the tenant has signed the agreement. This is not the case.
If you are concerned about any of your tenancy terms, seek advice. Our article explains where you can go for help.
Once you have signed your tenancy agreement, keep a copy somewhere safe. It is an important legal document and may be needed later—for example, as evidence of your rent and housing costs when claiming Universal Credit.
This is the end of this article.
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