The Dangers of Using AI to Draft Tenancy Agreements: Why Professional Expertise Remains Essential
Recently a client of ours advised us that they would be using Artificial intelligence to update their legal documents to ensure compliance with the Renters’ Rights Act. Whilst (AI) has made significant strides in improving efficiency across many industries, in the property sector, it is increasingly used for tasks such as marketing, customer service, and administrative management.
However, when it comes to drafting legally binding documents — particularly tenancy agreements — reliance on AI alone is unwise. There are serious legal, financial, and reputational risks associated with using AI without professional guidance .
The Legal Importance of a Tenancy Agreement
A tenancy agreement is not simply an administrative formality, it is a critical legal document that defines the contractual relationship between Landlord and tenant. In England, tenancy agreements — particularly Assured Shorthold Tenancies (ASTs) — must comply with a range of legislation, including, but not limited to :
Housing Act 1988 (as amended by the Housing Act 1996)
Housing Act 2004
Housing Act 1985
Housing & Planning Act 2016
Immigration Act 2016
Consumer Rights Act 2015
Tenant Fees Act 2019
Deregulation Act 2015
Renters’ Rights Bill (pending at the time of writing)
A raft of safety regulations
An incorrectly drafted agreement can create significant problems. It can lead to difficulties in enforcing contractual obligations, in the service of necessary notices, or even expose Landlords to financial penalties and litigation.
The Limitations of AI in Drafting Tenancy Agreements - Lack of Contextual Understanding
AI systems operate based on patterns, not judgement. They cannot fully grasp the specific nuances of an individual tenancy and language , such as whether the property is a licensed House in Multiple Occupation (HMO), whether there are particular local authority requirements, or whether special clauses are necessary to protect both parties’ interests. A ‘one size fits all’ approach does not meet the legal requirements to create a valid tenancy agreement.
Risk of Non-Compliance
Legislation such as the Tenant Fees Act 2019 imposes strict limits on what can be included in a tenancy agreement. Meanwhile, the forthcoming Renters’ Rights Bill seeks to strengthen protections for tenants and introduce further statutory obligations for Landlords and agents. AI systems are unlikely to be reliably updated to reflect such changes immediately and may include prohibited or outdated terms, potentially exposing Landlords to fines and regulatory action.
Unfair or Unlawful Terms
The Consumer Rights Act 2015 requires all contract terms to be fair and transparent. Terms that cause an imbalance in the parties’ rights to the detriment of the tenant may be deemed unfair and therefore unenforceable. AI-generated agreements are not sophisticated enough to identify and eliminate unfair terms, increasing the risk of disputes .
Lack of Professional Advice
Qualified legal professionals and regulated property practitioners offer more than mere document drafting. They provide tailored advice, assess risks, and ensure that agreements facilitate the lawful service of notices should it become necessary to do so. AI cannot replace this level of expertise.
Enforcement Risks
In the event of a dispute, the tenancy agreement forms the foundation of any legal claim. Ambiguous, incomplete, or non-compliant agreements may be rendered partly or completely unenforceable by the courts or tribunals. Mistakes regarding key issues, such as the protection of tenancy deposits under the Housing Act 2004, may prevent Landlords from serving necessary notices and result in significant financial penalties.
A Professional Approach to Drafting
The drafting of tenancy agreements should be entrusted to qualified professionals who understand the legal landscape and the specific needs of each letting arrangement. They can provide access to up-to-date legal guidance and resources to support this standard of professionalism.
While AI has its place in property management — particularly in marketing and administrative processes — the drafting of tenancy agreements is not one of them. The legal, financial, and reputational risks of using AI-generated documents are simply too great.
A tenancy agreement must be precise, legally compliant, and tailored to the circumstances. Only qualified human expertise can ensure this. Landlords and agents who take a professional approach to drafting protect not only their legal rights but also the integrity of their business .
If you require expertly drafted tenancy agreements or advice on compliance with the latest UK housing legislation, it is essential to consult a qualified professional. Our team is committed to supporting Landlords and agents with tailored, legally robust documentation and practical guidance.
Contact us today to ensure your lettings business operates to the highest professional and legal standards.