GUIDANCE ON UNFAIR TERMS IN RESIDENTIAL TENANCY AGREEMENTS

POTENTIALLY UNFAIR TERMS

The Regulations list out terms which are potentially unfair. At the end of the day all the circumstances will be considered.

Hidden Terms

The contract could be unfair if it binds the tenant to terms which he has had no real opportunity of considering before entering into the contract.

Onerous terms

Using terms and conditions alone may not be sufficient. Personal explanations, brochures, summaries and other written guidance may assist in drawing tenant's attention to terms. Information on a landlord's website will assist. Onerous terms should be highlighted e.g. put in capital letters.

Reading the Agreement before signing it

The tenant must be given the opportunity to read the tenancy agreement before signing it.

Type/location of property

Tenancy terms should be reasonable in relation to both the type and location of the property. A particular term passing on obligations placed on the landlord could be unfair when it is passed on to the tenant. For example this could apply to restrictive covenants or rules imposed by a resident's management company in the case of flats, which are not notified in detail to the tenant.

Standard terms/terms which are individually negotiated/core terms

A standard term which does not meet the test of fairness will be unenforceable against the consumer, i.e. the tenant or a guarantor. If the term is however genuinely individually negotiated this requirement will not apply. Core terms e.g. the amount of rent are not subject to the test of fairness so long as they are clearly expressed.

Unfair terms are unenforceable

Any standard term failing the test of fairness will be unenforceable. It will therefore be of no effect and can be ignored by the tenant or guarantor. This will occur just because there is a potential for unfairness. The fact that a particular landlord may act perfectly fairly and reasonably will not validate the clause. For instance a prohibition on all pets could be unfair because it would extend to a goldfish in a bowl. The clause is too wide and will be unenforceable even in the case of a tenant who manifestly acts unreasonably by bringing in a vicious dog. It will be void altogether. There is a special provision where the terms are ambiguous. A Court may be able to find at least one fair meaning to it and enforce it on that basis rather than determining it is unfair and thus void because of a lack of clarity.

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Guide correct as of 16th March 2015

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