Different types of Tenancy Agreements

Different types of Tenancy Agreements

7 Apr, 2021

What are the different types of tenancy agreement?

A Tenancy Agreement is a document which sets out the terms of a Tenancy, but there are different types of Tenancy Agreements which can be used in the UK.  Here we will run through some of the main options:-

When renting a property, having a written tenancy agreement will ensure the rental conditions between Landlord and Tenant are clear.  If you are new to the Buy-to-Let sector, choosing the correct agreement can be confusing.

Different tenancy agreements you may come across include:

  • Assured Shorthold Tenancy (AST)
  • Excluded Tenancy (Lodging)
  • Assured Tenancy
  • Non-Assured Tenancy
  • Regulated Tenancy
  • Company Let

Assured Shorthold Tenancy Agreement

The most common of type tenancy agreement is an Assured Shorthold Tenancy Agreement.  Most tenancies are automatically classed as AST’s as long as the property is private, tenancy commenced after 1989, it’s the tenants main accommodation and the Landlord does not live in the property.  Also, it will be an AST if a Landlord is renting individual rooms to tenants sharing facilities, but if extreme high rents (over 200k per annum) or low or no rent, you cannot use an AST.

Most AST’s will stipulate an initial fixed term of 6 or 12 months at an agreed rent.  You will not be able to raise the rent during this period unless a tenant agrees, or if there’s provisions for a rent review clause in the contract.

There is a legal requirement to protect any deposit into a Government approved deposit scheme.  

Once the fixed term is finished, if a new shorthold tenancy agreement contract is not signed, it automatically becomes a periodic agreement which means it moves to a rolling contract with the same rent.

Non-Assured Shorthold Tenancy

If an AST can’t be used, this type of tenancy can be used in particular situations, like the tenant’s main home is elsewhere, the rent is less than £250 p.a. the landlord is living in same property without sharing facilities.  

No deposit is required to be protected in a government approved deposit scheme and Section 8 and Section 21 Notices to end the tenancy is not required.  The Tenant does have the right to stay in the property for the length of the term as long as they comply with the agreement.

Excluded Tenancy (for lodgers)

An example of this type of tenancy use would be a Landlord living in the property and sharing the facilities.  There is less protection for the tenant with this type of agreement and no deposit is required to be protected.  A Landlord could evict a tenant by giving 4 weeks notice and without a court order.

Assured Tenancy

Used more commonly in the past between 1989 and 1997 giving tenants long-term tenancy rights.  It was typical of Housing Associations to use this type of agreement.

Regulated Tenancy

This type of agreement was used before 1989, for long-term tenancies with tenants being entitled to a fair rent set by the VOA Valuation Office Agency.  

Company Let

This is used hen renting your property to a company instead of an individual.  This type of tenancy agreement is not governed by the same rules as residential lets like deposit protection schemes and Section 8 and Section 21 Notices.  A Landlord would simply give a Notice to Quit.