Types of tenancies

Tenancy agreements serve as legally binding contracts outlining the terms and conditions of a rental arrangement between a landlord and a tenant.

Understanding the diverse landscape of tenancy agreements is crucial for both landlords and tenants alike. Whether you're embarking on your journey as a property owner or seeking a place to call home in London, grasping the nuances of different tenancy types can make all the difference in fostering a harmonious landlord-tenant relationship and ensuring legal compliance.

Fixed-Term Tenancy Agreements

A fixed-term tenancy agreement, as the name suggests, spans a predetermined duration, typically ranging from six months to a year. During this period, both landlord and tenant are bound by the terms specified in the agreement.

It's essential to note that early termination of a fixed-term tenancy is generally not permissible unless a break clause is incorporated into the agreement.

Once the stipulated term expires, the tenancy may transition into a periodic arrangement, unless either party decides otherwise.

Periodic Tenancy Agreements

Contrary to fixed-term agreements, periodic tenancies operate without a predetermined end date. Instead, they persist on a rolling basis, subject to termination by either the landlord or tenant through written notice.

After a fixed-term agreement ends, if neither party communicates a desire to terminate the tenancy, it automatically becomes a periodic arrangement.

Assured Tenancy

Assured tenancies give tenants the security of tenure, allowing them to live in the property indefinitely, barring exceptional circumstances. Although relatively rare in contemporary settings, assured tenancies stem from agreements established between January 15, 1989, and February 27, 1997.

This type of tenancies offers greater protection against eviction, giving tenants a sense of stability and security.

Assured Shorthold Tenancy (AST)

The cornerstone of most modern tenancy agreements, ASTs, established under the Housing Act 1988, cater to private residential properties. Characterized by their flexibility and widespread adoption, ASTs afford both landlords and tenants certain rights and obligations.

Typically commencing with an initial fixed term, ASTs offer clear guidelines regarding rent adjustments and deposit protection, ensuring a fair and transparent rental experience.

Non-Assured Shorthold Tenancy

Non-Assured Shorthold Tenancies serve specific niche scenarios where ASTs are deemed unsuitable. Instances include:

Rental values exceeding £100,000 annually
Tenants maintaining alternative primary residences
Landlords cohabiting with tenants without shared facilities

Unlike ASTs, landlords do not need to secure deposits in government-backed schemes or serve Section 21 notices to end the tenancy. However, tenants may remain in the property until the conclusion of the fixed term, if they comply with the terms of the tenancy agreement.

Excluded Tenancy

Excluded tenancies encompass arrangements where individuals reside as lodgers or live rent-free with family or friends. While offering fewer eviction protections compared to other agreements, tenants still retain certain rights delineated under relevant legislation.

Company Let

Company lets deviate from conventional tenancy arrangements. They involve corporate entities leasing properties for commercial purposes such as housing personnel or equipment. These agreements, distinct from ASTs, are predominantly governed by common law rather than statutory regulations.

Regulated Tenancy

Regulated tenancies, though increasingly uncommon, harken back to agreements established before January 15, 1989, under the Rent Act of 1977. These long-term arrangements offer tenants substantial rights and often feature rents significantly below market value.

Statutory/rolling

After a tenancy ends, it doesn't just stop automatically. Instead, it turns into what's called a periodic tenancy. This happens if new contracts aren't signed after the original agreement ends, and the same tenant stays in the property. Neither the landlord nor the tenant has to do anything special for this to happen.

The new periodic tenancy keeps the same rules as the original one, but it runs on a rolling basis. This means it usually goes month by month, but it could also be weekly, bi-weekly, or even longer, like quarterly or yearly.

To end a periodic tenancy, you need to follow the proper legal steps. This could mean both the landlord and tenant agreeing to end it, the landlord evicting the tenant, or either party giving notice. If the tenant gives notice, it's usually about one month, but it can vary. If the landlord gives notice, it has to be at least two months in writing.

Choosing the Right Tenancy Agreement

Choosing the right tenancy agreement depends on factors like how long you plan to stay, your budget, and legal protections for everyone involved. Whether you're a tenant or landlord, understanding crucial aspects such as rent terms, deposit protection, and termination rules is essential for smart choices. You should consider:

Start and end dates of the tenancy
Landlord's name (which could be a company name)
Property address
Rent amount, due dates, and payment method
Possibility of rent review and procedure
Deposit amount and protection details
Responsibility for utility bills, including internet and energy
Circumstances leading to partial or full deposit withholding (e.g., damage, contract breach like pets or smoking)

You can find out more about what should be included in your tenancy agreement at Gov.uk.

As a landlord, it's crucial to stay informed about current laws to support both yourself and your tenants. If you're new to being a landlord, Felicity J. Lord can assist you with everything from selecting a buy-to-let property to handling any damages to your rental property.

Crafting a comprehensive tenancy agreement

For landlords navigating the complexities of tenancy agreements, ensuring compliance with legal requirements and safeguarding both their interests and those of their tenants is essential. From outlining rental terms to addressing maintenance responsibilities, a well-drafted tenancy agreement serves as a cornerstone for a mutually beneficial landlord-tenant relationship.

Whether you're a landlord or a tenant, if you have any questions or need further information about tenancies and the related legislation, our team at Felicity J. Lord is here to help.

Additionally, you can find legal information on tenancies at Gov.uk.