Tenancy agreements
Before you let your property it is good practice for you to arrange for an agreement to be drawn up between you and your prospective tenant.
A tenancy agreement is a written legal contract that sets out the rights and responsibilities of both landlord and tenant. It will contain all relevant details such as the length of the agreement, the rent payable, and what is and isn't allowed in the property.
Assured Shorthold Tenancy (AST)
The most common agreement used within the private rented sector is an Assured Shorthold Tenancy (If your tenancy began, or was agreed, on or after 28 February 1997, it is likely to be an Assured Shorthold Tenancy) which means that:
- You are entitled to a possession order immediately after the initial agreed period (which is a minimum of six months, providing two months’ notice is given). You must also have placed the tenants deposit in a government authorised tenancy deposit scheme.
- You can charge a fair market rent.
- You are entitled to a possession order through the courts if your tenant owes you at least two months’ or eight weeks’ rent, providing you have served the correct valid notice.
Assured tenancy
Tenancies starting, or agreed, before that date but after 15 January 1989, are more likely to be Assured Tenancies. However, this type of tenancy agreement is usually issued by a housing trust or housing association because they offer more security than ASTs. Offering tenants this agreement allows them to live in the property as long as they do not break the terms of the tenancy agreement.
Regulated (or 'protected' tenancy)
If a tenant moved into the property before 15th January 1989, you may have agreed to a Regulated or Protected Tenancy. This type of tenancy offers the most protection against rent increases or eviction.
You should consult a copy of the guidance from the Office of Fair Trading website at www.oft.gov.uk to ensure your agreement does not have unfair terms.
Letting out rooms
Although ASTs are the most common within the private rented sector, there may be other agreements that you would like to consider, particularly when renting out rooms within your own home, for example:
- If a tenant lives with you as a lodger and shares living accommodation, you may use a Excluded Tenancy or Licence.
- If you have divided a property into flats and the tenant occupies a different flat from you, you may use a Non-Excluded Tenancy or Licence.
Should I provide a rent book?
You are only legally obliged to provide a rent book if the rent is payable on a weekly basis. Keep a record of rent payments and/or provide receipts to avoid any disagreements later.
The type of tenancy you offer depends on when it was taken out and on the living requirements.