When not to use an assured shorthold tenancy agreement

When not to use an assured shorthold tenancy agreement

Assured shorthold tenancy (AST) agreements are the most commonly used form of agreement between landlords and their tenants.

Its requirements are stringent: deposits must be placed into government protection schemes, fixed-term contracts can be automatically converted into rolling monthly contracts once the fixed-term has elapsed, and landlords can regain possession of their property by serving Section 21 or Section 8 notices.

Here, we inform you of the special circumstances under which landlords are entitled to use other, less restrictive tenancy agreements.

Renting out a single room in a shared house

When your tenant will be sharing facilities like the kitchen and bathroom with other tenants, use a similar document to the assured shorthold tenancy, called an assured shorthold (room only) agreement.

Renting out rooms in your own home

If you rent out part of the property that you live in as your main home, there are two possible agreements you can make with your tenants. If the tenants share your kitchen, bathroom or living room, use an excluded tenancy agreement (lodgers agreement) to give yourself greater protection. Not only will you be exempt from having to place the deposit in a government scheme, you will also be able to evict the tenant simply by giving them proper notice to quit. There is no requirement that you serve statutory notices through the courts, and the period of notice can be much shorter.

Even if you live in the same property but don’t share your facilities, you do not need to use an AST. Instead, set up a non-assured tenancy agreement. With this form of agreement, you don’t need to place the deposit in a protected scheme, and you don’t have to serve Section 21 or Section 8 notices to regain possession of the rented property. However, it’s slightly more difficult to evict these tenants than it is to evict a lodger who is sharing your facilities.

Renting for extreme annual rents or to tenants whose main home is elsewhere

If the annual rent you receive from the property is less than £250 or more than £100,000, or if none of your tenants are using your property as their main home, you should also use a Non-assured tenancy agreement.

Renting to companies

The other situation in which you do not need to use an AST is when a company rent your property. In this case, go for a company let agreement. As in the other examples, the tenancy will not be an assured tenancy. You will not be required to protect any deposit, and you will not need to serve Section 21 or Section 8 notices to regain possession, you will only need to give reasonable notice to end the tenancy.

Help and advice?

Andrew Reeves have more than 30 years’ experience of helping landlords manage their rental properties.

Tags: shorthold

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