What is a tenancy agreement?
A tenancy agreement is the master document that sets out a landlord’s and a tenant’s rights and responsibilities. It is usually in both parties’ best interests to have a tenancy agreement in place.
Types of tenancy agreement
The most common type of tenancy agreement issued by private residential landlords to private tenants is the Assured Shorthold Tenancy (AST). This is appropriate where the property is your tenant’s main accommodation and you are not a live-in landlord. ASTs usually specify an initial period, typically of six months, after which the landlord can end the tenancy without needing to give a reason.
There are other types of tenancies however such as assured tenancies, regulated tenancies and excluded licences. Excluded licences or tenancies are more often used when you take in lodgers. The noticeable difference between this and an AST is less protection for lodgers from eviction.
As the property owner, you should take the time to familiarise yourself with the different types of tenancy agreements available and seek legal guidance if you are unsure of the terms to include in your contract. It’s also good practice to review the terms of any agreement before renewing a tenancy.
Example Assured Shorthold Tenancy agreement
You can download a free, model AST agreement from the Gov.uk portal where you can also find further guidance on ASTs. Although this model tenancy agreement has been developed by the Government, landlords are not legally obliged to use it.
The example balances the interests of both landlords and tenants, but it is designed to provide a contractual basis for tenants who want to negotiate a longer fixed term period at the start of their tenancy. It also includes handy checklists for both landlords and tenants.
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What to include when writing a tenancy agreement
If you decide to draw up your own tenancy agreement, there are a few basic but essential pieces of information which must be included in any tenancy agreement:
- The address of the property.
- The full names of all parties involved in the agreement.
- How much the deposit is and details on how it will be protected (deposits should be held in a professional scheme).
- The full rental price and when it should be paid.
- Information on how and when rent agreements can be reviewed.
- The start and end dates of the tenancy, notice period and any break clauses.
- Landlord and tenant responsibilities, such as whether bills are included.
- Responsibility for maintenance and repairs.
- Rules on subletting the property.
And what NOT to include in a tenancy agreement
There are also a number of ‘exclusions’ which landlords have historically added to tenancy agreements – such as ‘no babies’ – but which cannot actually be legally included in the agreement because they could directly or indirectly discriminate against your tenants. This can even apply to refusing tenants with pets.
You can’t discriminate against or harass your tenants on the grounds of age, gender, race, disability, sexual orientation or identity, religion, your tenant being pregnant/having a baby. Your terms and conditions should always be fair and compliant with UK law.
How to end a tenancy agreement
Within your tenancy agreement, you should detail how much notice you require from your tenants before they can leave the property and stop paying rent. Your tenants are responsible for paying the rent for the entire term detailed in the tenancy agreement, particularly if it’s a fixed-term tenancy.
In some cases, you might choose to include a break clause in the tenancy agreement. Although it’s not ideal to have to hunt for another tenant after, say, six months, it can be best if either you or the tenants are not able to uphold the terms of the contract for the full term.
On the flip side, if you as a landlord want your tenants to leave then you must also give them fair warning. You should provide them with information on the process within the tenancy agreement in the first place, and then write to them to give official notice to vacate your property.
Landlords need to be aware that they must follow legal processes to be able to end a tenancy agreement. In most cases, landlords do not have a right to possession within the first six months of a tenancy agreement. And if a tenant refuses to leave after the initial period, then you must go through the court system to have them evicted.
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