Last Updated on June 3, 2024
Renting out a property is a significant responsibility that involves understanding various tenancy contracts. Property experts say estate agents in Bexley, each type of tenancy has specific features, obligations, and legal implications. This guide aims to clarify the different types of tenancy agreements to help landlords make informed decisions and maintain a smooth landlord-tenant relationship.
What Are Tenancy Agreements?
Tenancy agreements are legal contracts between a landlord and tenant outlining the terms and conditions of the rental arrangement. These contracts can be written or verbal and define the rights and responsibilities of both parties. They cover aspects such as rent, duration of the tenancy, maintenance responsibilities, and conditions for termination. The main types of tenancy agreements include assured shorthold tenancies (ASTs), assured tenancies, starter tenancies, fixed-term tenancies, periodic tenancies, regulated tenancies, excluded tenancies, and company lets.
Assured Shorthold Tenancy (AST)
An Assured Shorthold Tenancy (AST) is the most common type of tenancy agreement in the private rental sector. Introduced in 1988 and updated in 1997, ASTs apply to most tenancies started after 28th February 1997. Key features include:
Fixed Term or Periodic: ASTs can be for a fixed term (usually 6 or 12 months) or periodic (rolling weekly or monthly).
Eviction Rights: Landlords can evict tenants without a specific reason after the fixed term ends, provided they follow legal procedures.
Tenant Rights: Tenants have the right to ‘quiet enjoyment’ of the property, meaning they can live without unnecessary interference from the landlord.
Landlord Obligations: Landlords must provide safety certificates, an energy performance certificate, and protect the tenant’s deposit in a government-approved scheme.
Assured Tenancy
Assured tenancies offer more security for tenants compared to ASTs. They are typically used by housing associations or trusts and have been largely replaced by ASTs for new tenancies.Â
Features include:
Long-term Security: Tenants can stay in the property indefinitely, provided they comply with the tenancy terms.
Eviction Restrictions: Landlords must have a valid reason and obtain a court order to evict a tenant.
Rent Control: Rent increases are regulated, and tenants have the right to challenge unreasonable increases.
Starter Tenancy
A starter tenancy is a type of AST used by housing associations for new tenants. It usually lasts for 12 months and serves as a trial period to ensure the tenant adheres to their responsibilities. After the initial period, it can be converted into a longer-term assured tenancy if there are no significant issues.
Fixed-term Tenancy
Fixed-term tenancies are agreements set for a specific period, typically between six months to five years. These agreements provide stability for both landlords and tenants. Features include:
Defined Duration: The tenancy lasts for a specified period, after which it can be renewed or terminated.
Tenant Rights: Tenants can request to have a lodger, swap homes, or pass the tenancy to someone else under certain conditions.
Periodic Tenancy
Periodic tenancies, also known as rolling tenancies, do not have a fixed end date. Instead, they continue until either the landlord or tenant gives notice. There are two types:
Statutory Periodic Tenancy: Automatically occurs when a fixed-term AST ends, and the tenant remains without signing a new agreement.
Contractual Periodic Tenancy: Agreed upon in the initial contract, specifying that the tenancy will continue on a rolling basis after the fixed term.
Regulated Tenancy
Regulated tenancies are rare and typically apply to tenancies that began before 15th January 1989. These agreements offer substantial protection for tenants, including:
Fair Rent: Rent is set by the Valuation Office Agency and is usually below market rates.
Eviction Protection: Landlords must have a valid reason and obtain a court order to evict a tenant.
Excluded Tenancy
Excluded tenancies apply mainly to lodgers who share facilities with the landlord. These tenancies have fewer legal protections:
Simplified Eviction: Landlords can evict lodgers without a court order by giving reasonable notice.
Shared Facilities: Lodgers share common areas such as kitchens or bathrooms with the landlord.
Company Let
A company lease is an agreement where the tenant is a company rather than an individual. Governed by the Law of Property Act rather than the Housing Acts, these agreements have distinct features:
Less Regulation: Company lets are not subject to the same protections as residential tenancies.
Flexibility: Landlords can negotiate terms more freely, including rent and termination clauses.
Understanding Your Tenancy Agreement
Understanding the nuances of different tenancy agreements is crucial for landlords to manage their properties effectively. Key aspects to consider include:
Legal Obligations: Comply with all legal requirements, including providing safety certificates andÂ
protecting deposits.
Clear Terms: Ensure that the tenancy agreement clearly outlines all terms and conditions to avoid disputes.
Tenant Rights: Respect tenant rights to quiet enjoyment and maintain the property to the required standards.
By understanding the various types of tenancy agreements and their implications, landlords can create a positive rental experience for both themselves and their tenants. This knowledge empowers landlords to make informed decisions, ensuring compliance with the law and fostering a harmonious landlord-tenant relationship.
