Tenancy Agreements: Make the Right Choice for You and Your Tenants

An important part of being a landlord is using the appropriate tenancy agreement so that both your interests and the interests of your tenants are protected. You need the proper written agreement that is clearly understood by all parties and meets all legal requirements for enforcement.

When choosing a tenancy agreement, consider the type of property, the length of the tenancy, and the tenants themselves. You may want to consult an attorney to determine the most appropriate agreement to use and to be sure your terms are allowable. These are the basic types:

Assured Tenancy Agreement
This is primarily a commercial agreement and is usually used for company lets, lets for a fixed term, or for properties where the rent is more than £25,000 per year.

Assured Shorthold Tenancy Agreement
This is the most common type of agreement and is usually used to grant a tenancy for a shorter period. The landlord or tenant may terminate the agreement after six months by simply serving notice as outlined in the agreement.

House and Flat Share Agreement
These agreements are used by resident landlords (if, for example, you are renting out a room in your own home) and when you have a house shared by individual tenancies. This agreement does not have the force of an Assured Tenancy or even an Assured Shorthold Tenancy, and allows both parties to end the agreement quickly if they wish.

Holiday Letting Agreement
This agreement covers very short-term lets, typically a few days or weeks. For tax reasons, they must be for less than six months but are rarely longer than three months. As the name implies, this agreement covers the letting of premises being used for holiday accommodations.

A tenancy agreement can be changed if both the landlord and the tenant agree. The change should be made in writing, either by drawing up an entirely new agreement or by amending the existing document.

Tenancy agreements must be written in plain language that is clear and easy to understand. They should not contain any provisions which might be deemed unfair to either party.

If you are considering purchasing a property currently occupied by a tenant, be sure to review the tenancy agreement(s) as part of your due diligence to confirm that the terms will be acceptable to you.

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