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What is a contract?

A contract is an agreement between at least two parties with the intention to create a legal relationship.  Within the contract are specified terms and should either party break these terms then they are in breach of contract.  If one party decides that the breach is important enough then they can rescind the contract and seek compensation through the courts.  If the courts agree then they will award damages and maybe costs to the party against whom the breach occurred.

 

Within the lettings industry a landlord will normally be party to two contracts.

 

1.                 Landlord and Agent.

 

2.                 Landlord and Tenant.

 

Important to note that a contract can be either written or verbal.  Written is obviously the best form so that all parties can see on paper what they are letting themselves in for.  A classic form of verbal contract is the landlord that agrees with the tenants to provide them with a washing machine and then fails to provide the appliance.  The tenants can state that the landlord is in breach of the contract that was formed prior to moving into the property.  Should the landlord use the services of an agent and the agent tells the tenants that the landlord will provide a dishwasher and then fails to inform the landlord of this agreement then the agent could well be liable as he made the agreement.  I must admit that many agents even today still promise things to clinch a deal and “forget” to mention it to the landlord.

 

All terms of the let should be included in the contract so as to leave no grey areas.  Regardless of how small and trivial it may seem it is always best to be safe.

 

Contracts appear in everyday life and we all abide by them or impose them.  For there to be a contract there must be an offer, an acceptance and consideration.

 

For example the tenant offers to rent your property, you accept and the tenant pays the money.  The money is the consideration.

 

As a landlord you will come across statutes or laws which are an Act of Parliament.  No contract can overlook these and they must be adhered to.  The Housing Act of 1988 imposes many statutes on the landlord and no amount of altering of contracts can over ride these laws.

Above all always read the contract between you and the agent and between you and the tenant.  No matter how boring or long they are.  If in doubt ask!  If you can not get a satisfactory reply either seek legal advice or drop out of negotiations.

 

 
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