A tenancy agreement is a written legal agreement setting out the rights and responsibilities between a landlord and their tenant. It will state the duration of the agreement, the rent and how the it should be paid, when maintenance should be done, and what is allowed in the property, like pets. A written agreement is only required by law for tenancies longer than 3 years, but having one can avoid later disputes over the exact terms agreed. Especially if you ever need to go court!

A Free Guide to Short Hold Tenancy Agreements

Assured Shorthold Tenancy (AST) is the most common form of tenancy agreement in the UK. If a tenancy was not agreed before the 28th February 1997, it is likely to be an Assured Shorthold Tenancy. An AST gives reasonable protection to the tenant for the duration of the agreement, and allows the landlord to easily reclaim the property when it ends. They were introduced by the Housing Act 1988 (with important changes made by the Housing Act 1996). (Don't confuse an Assured Shorthold Tenancy, with an Assured Tenancy. They are different.)

Suitability

The AST was created to make it easy to let out residential properties on a commercial basis. They're intended for a single household renting a home for at least 6 month, and less than 3 years.

An AST is appropriate when:

  • You are not living with your tenant. This includes living in a separate flat of a sub-divided house.
  • When the combined rent is under £25,000 per year. (Which can easily happen in large shared houses.)
  • The property is the tenant's principal home.
  • The tenant is a natural person (e.g. they are not a company, trust, or organisation.
  • You are not a local council.

Length and the Minimum Term

The minimum term is 6 months. You can agree a shorter period with your tenant, but you won't be able to make them leave your property until the 6 month minimum ends. Ordinarily you must give your tenant 2 months notice before recovering the property.

You have the right to terminate an AST by issuing a "section 21 notice", which in practice means a 2 month minimum notice. A tenancy cannot be ended by a section 21 notice in the first 6 months. If you renew a tenancy, the 6 month minimum starts from the first agreement, not the renewal. If you do nothing when the shorthold tenancy expires, the tenancy will automatically run on from one rent period to the next on the same terms – this is known as a statutory periodic tenancy. The tenancy will continue to run on this basis unless you renegotiate, or either of you decide to end it.

Statutory Rights

The House Acts fixes certain statutory rights for both tenants and landlords. An agreement can extend these rights, but cannot remove them. They are written into the law; they always apply. Fortunately, they are reasonable.

Your commitments are:

  • To carry out basic repairs
  • Keep the supply of water, gas, electricity, sanitation, and heating working. (You're not expected to pay for them.)
  • Not cause nuisance to your tenants. (You must give them notice if you wish to visit the property, as it is their home.)

Your tenant is obliged take proper care of your property, pay the rent, and keep to the terms of their tenancy agreement.

Handling the Deposit

Deposits taken for an AST must be protected by a Government-authorised tenancy deposit protection scheme within 14 days. Schemes can hold the deposit for you (custodial deposit protection), others will insure your tenant against you not repaying. The government awarded contracts to three companies to run tenancy deposit protection schemes.

  • The Deposit Protection Service (The DPS)

    The only custodial deposit protection scheme, is free to use and open to all landlords and letting agents. The service is funded entirely from the interest earned from deposits held. The service is online, but paper forms and a call centre are available.
  • mydeposits

    mydeposits is a partnership between the National Landlords Association and Hamilton Fraser Insurance. This insurance-based tenancy deposit protection scheme enables you to hold deposits directly.
  • The Tenancy Deposit Scheme (TDS)

    TDS is an insurance-backed deposit protection and dispute resolution scheme run by The Dispute Service building on a scheme established in 2003 to provide dispute resolution and complaints handling for the lettings industry.

Evicting a tenant

You cannot evict the tenant yourself. First you must obtain a possession order from the court. The possession order might require the tenant to leave on set date, or allow them to stay if certain conditions are met. (For example, owed rent it paid, or a nuisance seizes.) If the tenant then refuses to leave, you must apply for an eviction warrant from the court. The court will then arrange for bailiffs to evict the tenant for you.