Types of tenancies

A tenancy agreement is a written contract between a landlord and tenant. It outlines the terms of the tenancy and the responsibilities of both parties. As long as rent is paid and both parties adhere to the agreement's rules, the contract is maintained. Here, we explore the various types of tenancies you may encounter as a tenant, or have to prepare as a landlord.

What Different Tenancy Periods Are There?

Tenancies generally fall into two primary categories based on their duration:

  • Fixed-term tenancies
  • Periodic tenancies

Fixed-Term Tenancies

A fixed-term tenancy agreement lasts for a predetermined period, typically between six months and a year, but it can be longer. The length of the tenancy must be specified in the agreement, and if it exceeds three years, it must be signed as a deed. A critical aspect of this type of tenancy is that it cannot be ended early unless there is a break clause included in the contract.

Once the fixed term expires, the tenancy can transition into a periodic tenancy unless the tenant decides to vacate the property, in which case notice should be given to the landlord or agent.

Periodic Tenancies

A periodic tenancy has no fixed end date and continues until either the landlord or tenant gives notice in writing. If a fixed-term tenancy ends and no new agreement is signed, it automatically becomes a periodic tenancy. This means that the tenancy will continue on a rolling basis, typically monthly, under the same terms as the original agreement.

Assured Tenancy

An assured tenancy allows a tenant to live in the property for the rest of their life, providing significant protection against eviction. These tenancies are rare and mostly apply to agreements made between 15 January 1989 and 27 February 1997. You may also qualify for an assured tenancy if you received a written notice before the tenancy started or if you had a previous assured tenancy in the same property with the same landlord.

Assured Shorthold Tenancy (AST)

Most residential tenancies in England are assured shorthold tenancies (ASTs), governed by the Housing Act 1988. The key characteristics of an AST include:

  • The property is private.
  • The tenancy began after 1989.
  • The property is the tenant’s primary residence.
  • The landlord does not live in the property.

ASTs often start with a fixed term of six or twelve months. During this period, rent cannot be increased unless agreed upon by the tenant or included in a rent review clause in the agreement. Any deposit taken must be registered with a government-approved deposit protection scheme. After the fixed term expires, the tenancy can either be renewed with a new contract or automatically become a statutory periodic tenancy.

Non-Assured Shorthold Tenancy

This type of tenancy is used in specific situations where an AST cannot be applied, such as:

  • When the annual rent exceeds £100,000.
  • When the tenant’s primary residence is elsewhere.
  • When the landlord lives in the property but does not share facilities with the tenant.

Unlike an AST, landlords with a non-assured shorthold tenancy are not required to protect the deposit with a government scheme, and a Section 21 Notice is not necessary to end the tenancy. However, tenants still have the right to remain in the property until the end of the fixed term if they adhere to the tenancy agreement.

Excluded Tenancy

An excluded tenancy typically applies when a lodger lives in the landlord’s home and shares facilities like the kitchen or bathroom. It also applies if someone lives rent-free with family or friends. This type of tenancy provides less protection from eviction than other agreements, but tenants still have certain rights.

Company Let

Company lets are not common for typical residential landlords and tenants. In this arrangement, a company with a legal identity rents a property to house its staff or equipment. This can be either a residential tenancy, where the property is used by directors and employees, or a commercial tenancy, where the property is sublet to customers. Company lets are governed by common law rather than the Housing Act 1988, which only applies to individual tenants.

Regulated Tenancy

Regulated tenancies, also known as protected or Rent Act tenancies, are rare and apply to agreements made before 15 January 1989 under the Rent Act 1977. These tenancies provide strong long-term rights and typically involve lower rent than comparable properties. They offer significant protection to tenants, who often enjoy far-reaching rights to stay in their homes.

Statutory/Rolling Tenancy

When a fixed-term tenancy ends without a new contract, it automatically becomes a periodic or rolling tenancy. This type continues on a month-by-month basis under the same terms as the original agreement. The tenancy remains in effect until it is terminated by mutual consent, eviction, or notice from either party. Typically, tenants must give one month's notice, while landlords must provide at least two months' written notice.

Choosing the Right Tenancy Agreement

Understanding the various types of tenancies can help you choose the best option for your needs. As a tenant, it’s crucial to know your rights and ensure your landlord is responsible and adheres to legal requirements. When selecting a tenancy agreement, consider the following:

  • Start and end dates of the tenancy.
  • The landlord’s name, which may be a company.
  • The property’s address.
  • The rent amount, payment schedule, and method.
  • Whether the rent can be reviewed and how.
  • The deposit amount and how it will be protected.
  • Responsibility for bills, including utilities and internet.
  • Conditions under which the deposit can be withheld.

For a detailed list of what should be included in a tenancy agreement, refer to the government guidelines on Gov.uk.

Creating a Tenancy Agreement

Both landlords and tenants have responsibilities and should stay informed about current legislation to support a smooth tenancy. At Haybrook, we can assist with everything from selecting a buy-to-let property to managing tenancy agreements and dealing with potential issues.

If you need to draft a tenancy agreement or review one you’ve received, our complete guide can help ensure it meets all legal requirements. As experienced estate agents in the North of England, Haybrook is dedicated to providing professional advice and support to both landlords and tenants.

Contact Haybrook for Expert Advice

Haybrook’s team of knowledgeable professionals are here to help. We offer tailored advice and support to navigate the complexities of tenancy agreements and property management.

Managing tenancies can be challenging at times, but with the right knowledge and support, you can make informed decisions that benefit you, whether you are a landlord or tenant. For more information or assistance, contact Haybrook today. Legal information on tenancies can also be found on Gov.uk.