How to Create the Right Tenancy Agreement

12 September 2021

A tenancy agreement is a contract between you and your tenants. It sets out the legal terms and conditions of the tenancy. It can be written down or oral.

A tenancy can either be:

  • fixed-term (running for a set period of time)
  • periodic (running on a monthly or weekly basis)

Assured Shorthold Tenancies (ASTs)

The most common form of tenancy is an AST. Most new tenancies are automatically this type.

A tenancy can be an AST if all of the following apply:

  • you’re a private landlord or housing association
  • the tenancy started on or after 15 January 1989
  • the property is your tenants’ main accommodation
  • you do not live in the property

A tenancy cannot be an AST if:

  • it began or was agreed before 15 January 1989
  • the rent is more than £100,000 a year
  • the rent is less than £250 a year (less than £1,000 in London)
  • it’s a business tenancy or tenancy of licensed premises
  • it’s a holiday let
  • the landlord is a local council

An AST can be fixed term or periodic.

Most ASTs are for a fixed period which can be any length but the most common is 6 or 12 months.

A periodic tenancy will usually run from month to month.

If you need a free AST Agreement you can get one here:

https://www.mudhut.com/patron/tenancy-agreement

Other Types of Tenancy

There are other tenancies that are not as common as ASTs, including:

  • excluded tenancies or licences
  • assured tenancies
  • regulated tenancies

Excluded tenancies or licences

If you have a lodger living in your home and share rooms with them, like a kitchen or bathroom, you may have one of these. This usually gives your lodger less protection from eviction than other types of agreement.

Assured tenancies

Tenancies starting between 15 January 1989 and 27 February 1997 may be assured. Your tenants have increased protection from eviction with this type of agreement.

Non-Housing Act 1988 Tenancies

The Housing Act 1988 excludes certain types of letting from the protections offered by ASTs, for example:

  • Lettings to companies
  • Holiday lets
  • Lettings by resident landlords
  • Rents over £100,000 a year
  • Not the tenant’s main or principal home
  • Premium leases
  • Agricultural tenancies

Situations such as the ones above are known as Non-Housing Act 1988 Tenancies and will need to be covered by a different agreement.

Categories: Residential Lettings Best Practice Legal Aspects of Lettings