Landlord and property

Making sense of tenancy agreements


There are 2 types of tenancy agreements that can be held in England and Wales; Assured and Assured Shorthold.

What’s the difference?

Assured shorthold

The main difference is that a landlord that has an assured shorthold tenancy agreement has an automatic right to regain possession of their property at any time after any fixed term of the tenancy agreement has expired.

Assured shorthold - periodic tenancy

An assured shorthold agreement put in place after 28 February 1997 that doesn't have a fixed term is called a 'periodic tenancy'. Under this agreement, a landlord can give their tenant notice that they’re terminating the tenancy at any time.

Assured

A landlord who has let their property using an assured tenancy agreement must wait for the fixed period to end before giving notice.

In the cases of an assured and an assured shorthold tenancy agreement, 2 months' notice is required.

Which agreement do you have?

Tenancy agreements made between 15 January 1989 and 27 February 1997 are likely to be an assured tenancy.

However, if written notice was provided to the tenants before the rental began, stating the tenancy agreement would be an assured shorthold tenancy agreement, and providing the fixed period wasn’t less than 6 months, then you have an assured shorthold tenancy agreement in place.

A tenancy agreement made on or after 28 February 1997 will automatically be an assured shorthold agreement. Unless specifically stated otherwise, or if you’ve served notice on the tenant stating this, in which case, you’ll have an assured tenancy agreement.

For tenancy agreements that began before 15 January 1989, they’ll be known as 'regulated tenancies' unless the landlord also lives in the property. These tenancies are regulated by the Rent Act which has its own separate provisions regarding rights and obligations of tenants and landlords.

Remember, some tenancies can only be assured...

These are:

  • A tenancy replacing an earlier assured tenancy agreement which has come to an end

  • An assured tenancy created where the tenant has 'inherited' possession of the property on the death of a previous 'Rent Act regulated tenant' (a tenant who has an agreement pre-dating 15 January 1989)

  • A tenancy that has been transferred from a public sector landlord to a private landlord

  • A tenancy arising automatically when a long leasehold tenancy expires

  • The landlord also lives in, and shares the property with the tenant, or where the landlord lives in a building which has been converted into flats (as opposed to a purpose built block of flats) and lets another flat in the same building to the tenants

What types of tenancies are excluded from these agreements?

There are some types of tenancies that are automatically excluded. Even if the tenancy agreement specifically states that is it an assured tenancy or shorthold tenancy, it will automatically be excluded from being so if one or more of the following apply:

  • It’s dated prior to 15 January 1989

  • It’s for a rent of more than £100,000 a year

  • It’s rent free or at a low rent (£250 a year outside Greater London) or (£1,000 a year within Greater London)

  • The property is let to a business or is agricultural land or agricultural holdings within the meaning of the Agricultural Holdings Act 1986

  • It’s a holiday letting where the purpose of the tenancy is to give the tenant a right to occupy for a holiday only

Are tenancies the same everywhere in the UK?

Scotland

There are slightly different rules in Scotland. Here a tenancy agreement made before 2 January 1989 is likely to be a regulated tenancy, meaning the tenant will have security of tenure and a more favourable situation in relation to rent assessment.

A tenancy made after 2 January 1989 is likely to be either an assured tenancy or a short assured tenancy.

To be a short assured tenancy, a landlord needs to have served on the tenants - prior to the signing and commencement of the lease by the tenants - a statutory form known as an AT5, which specifies that the tenancy being created is a short assured tenancy.

If this isn’t done prior to signing and commencement of the lease by the tenants then the tenancy will be an assured tenancy.

It would be unusual for a landlord to want to create an assured tenancy rather than a short assured tenancy - although many landlords inadvertently create an assured tenancy by failing to properly follow the rules in relation to the service of the AT5.

Northern Ireland

There is only one type of standard residential tenancy agreement which can cater for furnished or unfurnished properties. However, in certain circumstances, the rent can become controlled.

If you have any doubts about which type of tenancy you have in place, seek legal advice.

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