11th November 2022
Landlords, are you aware of the various tenancy agreements that may apply to your tenancies? Furthermore, did you know that certain tenancies will be viewed by the law as a specific kind of agreement regardless of the agreement you signed with the tenant? Today, we’re going to explain all of this and more to help you, as landlords, understand the differences between Assured Short-hold Tenancy agreements and Non-Housing Act agreements. One of our biggest goals at Concentric Sales and Lettings is to ensure that landlords like you have the information you need to stay safe and updated about the latest property legislation in the private rented sector. Now, without further ado, let’s start exploring these agreements.
The Assured Short-hold Tenancy is one of the most commonly used contracts within the private rented sector and was born in 1988 when the Housing Act came into effect. This kind of tenancy agreement gives rights and benefits to both tenants and landlords. Tenants receive the assurance that they have security of tenure for the fixed term of the contract, providing there is no breach. Meanwhile, landlords are given two notices, Section 21, and Section 8, which can be used to gain possession should the need arise. However, Assured Short-hold Tenancy agreements are also subject to a variety of laws and regulations such as the Tenant Fee Ban and deposit registration requirements.
There are three main criteria that must be met for a tenancy to be an Assured Short-hold Tenancy.
Should those three criteria be met, the tenancy will be defined, in the eyes of the law, as an Assured Short-hold Tenancy. This definition will be binding regardless of the specific agreement that you have put in place. This means that you are bound to comply with the rules and regulations surrounding an Assured Short-hold Tenancy whenever your tenancy falls within these criteria.
Non-Housing Act agreements are the other tenancy types that are often used within the private rented sector. Although these agreements apply to a variety of situations, one of the most common examples is a Company Let Tenancy Agreement. In this case, you, the landlord, are renting a property to a company, and therefore the tenant is not an individual. This means that the Housing Act and its Assured Short-hold Tenancy do not apply to the agreement. Practically speaking, what does this mean?
Well, it means that several pieces of legislation become irrelevant to the tenancy. For example, the deposit registration requirement does not apply to a Non-Housing Act agreement. Additionally, the Tenant Fee Ban is also not applicable, meaning that you are permitted to charge a variety of fees to the tenant. There is also no deposit cap for any tenancies let outside the Housing Act. For example, you might charge them a reference fee, an administration fee, or a late payment fee.
Gaining possession of your property is also completely different under a Non-Housing Act agreement. Considering the example of a Company Let agreement, a landlord can simply end the tenancy at the end of the fixed term by just letting the tenants know. If and when that tenancy has come to an end and gone into a rolling contract, a landlord is then required to give notice should he require possession of the property. However, this notice is in the form of a Notice To Quit – giving a minimum of four weeks' notice.
From all this, it’s probably clear to you, as a landlord, that tenancies that fall outside the Housing Act give you greater opportunities and shorter notice period times than Assured Short-hold Tenancies. That being said, Landlords, please do not think that you can use Non-Housing Act agreements when, in fact, an Assured Short-hold Tenancy criteria is met. If your tenant is an individual, the property is their main home, and the landlord is not residing on the property, the tenancy qualifies as an Assured Short-hold Tenancy. This is the agreement that will be used in the eyes of the law when determining your compliance, regardless of the contract the tenant has signed. Please be mindful when selecting your tenants and ensure that you use the correct tenancy agreement in every scenario.
We hope you’ve found this information useful. If you did, please feel free to take a look at other posts here on our blog, where you’ll find answers to all your landlord legislation questions. There are over 170 different pieces of legislation impacting the private rented sector! Do you know them all? One of the best ways to stay up to date and stay compliant is to join our FREE quarterly webinars hosted by our very own Dawn Bennett. In these webinars, we talk about the laws and regulations you need to be aware of and landlords and take a deeper dive into the best ways to stay compliant with the latest legislation.
