You’re surely only bound by a tenancy agreement once you’ve signed it? Or are you? We regularly come across tenants who agree to the terms and conditions of a tenancy agreement on Friday but want to pull out on Monday because they’ve found somewhere else. Can they do that?
The concept of ‘rental’
To answer this question, it’s a good idea to start by defining the concept of ‘rental’. The law says that rental is the arrangement in which one party, the landlord, makes a commitment to the other party, the tenant, to make a property (or a portion of it) available for use and the tenant in turn commits to a consideration (Book 7, Section 201, paragraph 1 the Civil Code). This consideration usually involves the payment of rent in monetary form.
The law therefore says nothing about a signature being a precondition for binding consequences. When one party makes a proposal and the other party accepts these terms and conditions, this means that agreement has effectively been reached. When the contract details for a property are discussed and the parties agree to them, this therefore constitutes a contract. Since July 1st 2023, the Good Landlordship Act introduced the requirement for this to be done in writing and forces landlords to document the conditions agreed upon between landlord and tenant. That doesn’t change the fact that a tenancy agreement can be formed verbally, but municipalities or tenants may address landlords that don’t draw up a written tenancy agreement.
Oral vs. written tenancy agreement
There is no obligation to record the terms and conditions in writing; it is also possible to conclude a tenancy agreement orally. As it’s difficult to prove exactly what has been agreed orally, we recommend setting out the arrangements in a written agreement. As professionals we are apprised of prevailing laws and legislation and have many years of experience, which means we know what it’s important to include in the agreement.
So what do we think needs to be stated in a tenancy agreement? It should certainly contain the property details, rent, rental period and any deposit. Other important items include arrangements on liability, rent indexation, default on payments, nuisance and terminating the agreement.
Obligations of the landlord and tenant
As mentioned above, the tenant has an obligation to provide a consideration. This usually involves the payment of rent. In addition, throughout the term of the tenancy agreement the tenant is under an obligation to be a good tenant; he or she must treat the property with respect and not cause a nuisance.
It’s not just the tenant who has obligations to the landlord though. The landlord is also under anumber of obligations to the tenant. The most important of these are making the property available and repairing any defects.
Binding tenancy agreement
A tenancy agreement therefore becomes binding as soon as the parties have agreed on the terms and conditions. This can be orally or in writing. A signature is not a requirement for concluding an agreement. Think carefully about this before you accept the terms and conditions.
