Understanding Different Types of Tenancies
A tenancy agreement serves as a contract between a landlord and tenant, outlining the terms of their arrangement. Let's explore various types of tenancies to shed light on this topic.
What are the Different Types of Tenancy Periods
There are two primary types of tenancy periods:
Fixed-Term Tenancy
This type runs for a specified period, typically between six months to a year. The duration must be clearly stated in the tenancy agreement. It's important to note that ending a fixed-term tenancy early usually requires a break clause.
After the initial term ends, the tenancy automatically converts into a periodic tenancy. If you intend to vacate the property, proper notice should be given to the landlord or agent.
Periodic Tenancy
This arrangement has no fixed end date and continues until either the landlord or tenant provides notice to terminate it in writing. Fixed-term tenancies automatically transition into periodic tenancies unless the tenant notifies the landlord of their intention to leave.
Assured Tenancy
An assured tenancy grants the tenant the right to live in the property for life—a relatively uncommon arrangement nowadays. Tenancies starting between 15 January 1989 and 27 February 1997 may be assured. Post-27 February 1997, tenants may qualify for assured tenancy if:
- The landlord issued a written notice prior to the tenancy, confirming its assured status.
- The tenant previously held an assured tenancy in the same accommodation with the same landlord.
Assured tenancy holders enjoy enhanced protection against eviction.
Assured Shorthold Tenancy (AST)
An AST is the most common type of tenancy, governed by the Housing Act 1988. Key features of an AST include:
- The property is private (not commercial).
- The tenancy commenced after 1989.
- The property serves as the tenant's primary residence.
- The landlord does not reside in the property.
Most ASTs stipulate an initial fixed term of six or 12 months, during which rent increases are typically not permitted unless agreed upon by the tenant or outlined in the agreement.
Non-Assured Shorthold Tenancy
This type of tenancy is used in specific circumstances where an AST cannot be applied, such as when rent exceeds £100,000 per year or when the tenant's primary residence is elsewhere. Unlike an AST, landlords are not obligated to deposit funds into a government-backed scheme, and they can terminate the tenancy without a Section 21 Notice.
Excluded Tenancy
An excluded tenancy applies to situations where a lodger shares living spaces like kitchens or bathrooms with the landlord or lives rent-free with family or friends. This type of tenancy generally offers less protection against eviction.
Company Let
A company let occurs when a corporate entity rents a property to accommodate its equipment or staff. Such arrangements are not typical for individual landlords and tenants.
Regulated Tenancy
Regulated tenancies, once common, are now rare and governed by the Rent Act 1977. They offer long-term security and often involve lower rents compared to market rates.
Statutory/Rolling
Periodic tenancies automatically commence when fixed-term agreements expire. The tenancy continues until terminated by mutual consent, eviction, or proper notice from either party.
Choosing the Right Tenancy Agreement
Selecting the appropriate tenancy agreement involves understanding your rights and the responsibilities of both landlords and tenants. Key considerations when reviewing a tenancy agreement include:
- Start and end dates of the tenancy.
- Landlord's details, which could include a company name.
- Property address.
- Rent amount, due dates, and payment methods.
- Deposit amount and protection details.
- Responsibility for utility bills.
- Terms regarding deposit deductions.
Get In Touch
Whether you're a landlord or tenant, our team at butters john bee is here to address your tenancy-related queries and provide the information you need. Contact us via our website or call us directly for personalised assistance. You can also find legal resources on tenancies at Gov.uk.
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