Mental Capacity and Tenancy Agreements

mariam-abu-hussein
Mariam Abu HusseinLegal Assessment Specialist @ Lawhive
Updated on 11th January 2024
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For any contract, including tenancy agreements, individuals must understand the nature of the agreement to legally agree to it. But, what if someone gets a person to sign a contract knowing they lack the mental capacity to understand it?

The Mental Capacity Act 2005 outlines when individuals don’t have capacity, who can make decisions for them, and how these decisions should be made. However, it’s not uncommon for individuals lacking mental capacity to be asked to sign agreements, like tenancy agreements, or have others sign on their behalf without the authority to do so.

If someone lacks the mental capacity to make decisions, they can’t enter into a tenancy agreement, modify an existing one, or terminate a tenancy. 

If a landlord or a housing agent lets a person sign a tenancy agreement despite knowing they may not understand it, it could be considered a voidable contract. This means it may be cancelled, although it remains enforceable until challenged.

Who can sign or end a tenancy agreement for someone who lacks capacity? 

A person can sign a tenancy agreement on behalf of someone lacking mental capacity if they have: 

If there's already an Attorney or Deputy, landlords should coordinate with them, making sure they have the authority to sign before moving forwards.

If there's no legal authority, an application to the Court of Protection is an option, but it's rare for landlords to do this.

Common problems around mental capacity and tenancy agreements 

The biggest mistake a landlord, letting agents or local authorities can make around this issues is asking someone who can’t fully understand to sign a tenancy agreement or letting someone without the proper authority sign for them. 

If someone has the mental capacity to grant authority, they can appoint someone to act on their behalf when entering into a tenancy agreement. However, if a person lacks the capacity to grant authority and lacks the capacity to enter into the agreement themselves, a tenancy agreement can only be signed by someone who has legal authority.

Other issues include: 

  1. Not checking if the person can understand and sign a rental agreement;

  2. Assuming a previous capacity assessment for a different decision covers the tenancy agreement; 

  3. Presenting a document as a tenancy agreement when, legally, it’s more likely a licence agreement. 

If an individual has been given the legal authority to make decisions on behalf of someone lacking capacity, they should have paperwork to prove it. 

To verify that someone has the legal authority to sign a tenancy agreement, you should request to see these documents and check what the person’s powers relate to. In some cases, they may only have the legal authority to make decisions related to health and social care, not financial and property matters. 

Both LPAs and EPAs should also be registered for that person to be able to sign on behalf of the person lacking mental capacity. Registered documents are usually stamped to show this. It’s also possible to check with the Office of the Public Guardian to verify the registration of a LPA or EPA. 

If someone signs a tenancy agreement for an individual lacking mental capacity without the legal right to do so, the agreement could be ruled as invalid. 

Therefore, it’s important to check if a person has the ability to make decisions before they sign. 

Mental capacity assessments for tenancy agreements

The assessment to determine if someone can make decisions  is a legal process that focuses on how the decision is made, not the decision itself. If a person can’t understand, retain, use or weigh up information about a decision, or communicate a decision, they may lack capacity for that decision at that time. 

When assessing mental capacity to sign a tenancy agreement, if someone can’t understand and accept relevant information like their obligations as a tenant, the risks of eviction or the terms of the tenancy, they may lack capacity for that decision at that time.

That being said, if someone can understand the basics of a tenancy agreement through the use of simplified agreements, diagrams, and pictures which make it easier to understand, this may be enough to make it a legally binding agreement.

When is a tenancy voidable? 

If someone with known lack of capacity takes on a tenancy, it’s considered voidable. 

This means they have the same rights and responsibilities as any other tenant, unless the tenancy is voided by the tenant or someone authorised by the tenant (like an Attorney or a deputy appointed by the Court of Protecting). 

For a tenancy to be voidable, there needs to be proof that, at the time of taking on the tenancy, the tenant lacked the capacity to make that decision, and it wasn’t in their best interest. 

That being said, if a tenant has support to manage their tenancy, the fact that it’s voidable is unlikely to impact them unless they want to end the arrangement. Even if a tenant lacks capacity, a landlord can’t use that as a reason to end the tenancy.

What happens if a tenancy is voided? 

When a tenancy is voided, the tenant is no longer bound by the terms of the contract. As such, they lose the right to remain in the property and would need to give notice in the usual way.

While voiding a tenancy for lack of capacity is legally possible, it’s rarely done unless the tenant wants to end the arrangement.

How can we help? 

At Lawhive, we are committed to helping everyone understand the law and seek justice if they need to. Our network of expert landlord and tenant solicitors regularly help both tenants and landlords understand their position and move through their legal issue in the most efficient, effective, and affordable way possible. 

If you need help with a tenancy agreement, either as a landlord or a tenant, contact our legal assessment team for a free case assessment.

We’ll listen to your issue and help you understand the best next steps and, if you need to, connect you with the best solicitor to deal with your case for a fixed-fee.

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