In order for a person to have contractual capacity, they must be able to understand the nature of the agreement in question. If someone lacks mental capacity, this can result in difficulties when it comes to housing management of stock and/or tenancies. 

The Mental Capacity Act 2005 provides a statutory framework for people who lack the capacity to make decisions for themselves, or who currently have capacity but want to make preparations for a time when they may lack it in the future. It sets out who can make decisions, in which situations, and how they should go about it. 

A tenant must be assumed to have capacity unless it has been established otherwise. The only way to establish if a tenant lacks capacity is through medical evaluation and evidence, and such evidence is typically provided by a doctor or specialist medical practitioner. Mental capacity is also issue / matter specific. 

If someone, notably a landlord, has evidence that a person lacks mental capacity when it comes to a tenancy, they cannot enter into a tenancy agreement, assign/vary a tenancy, or end the tenancy. 

If a landlord has been made aware of a person’s lack of capacity but the tenant proceeds to sign an agreement, the tenancy agreement is voidable. In this case, the tenant would retain their rights, but the landlord may not be able to enforce theirs. 

So, what can a landlord do if someone lacks mental capacity to enter, vary, assign and/or end a tenancy? 

If you have evidence that the person lacks mental capacity, in terms of the tenancy only someone with legal authority can act on their behalf.  Such legal authority could be: 

• A Court of Protection appointed Deputy with authority to make decisions on the tenancy agreement; or 
• An Attorney (or attorneys) under a Lasting Power of Attorney or Enduring Power of Attorney for Finance and Property; 
• An Order from the Court of Protection which makes provision to enter, end, assign or vary a tenancy. 

If there is no such person with legal authority, then an application may need to be made to the Court of Protection. 

An application can be made to the Office of the Public Guardian which is part of the Court of Protection for an order to either enter or surrender a tenancy. The application will need to be supported by the capacity assessment and a best interest’s assessment. The application will also need a statement setting out why the order is required, either to enter or to end a tenancy. These are completed on standard forms, but it is important that the correct forms are used, and the appropriate information provided to avoid unnecessary delays and complications. 

Although a landlord could make an application to the Court of Protection, it is rare. Usually there are alternative housing management, Local Authority and or social care solutions, though it’s important that a landlord understands the capacity and the unique housing management risks it can present.   

Here at MSB, we offer bespoke training on this very topic.  If you have any questions or concerns relating to capacity and tenancy management, or would like to explore our bespoke training package on the topic, please contact Amy Tagoe at MSB Solicitors amytagoe@msbsolicitors.co.uk. 

 

Law is correct as at 26th July 2022 

Whilst every effort has been taken to ensure that the law in this article is correct, it is intended to give a general overview of the law for educational purposes. You are respectfully reminded that it is not intended to be a substitute for specific legal advice and should not be relied upon as legal advice. No liability is accepted for any error or omission contained herein.