Tenancy Agreement: How Long Should it Be?

The most common tenancy agreement type for private rentals in England is an Assured Shorthold Tenancy. These leases often start out as fixed-term leases, whose timespans are established up front and typically range from six months to three years (but may go as high as seven years), as mutually agreed upon by the landlord and renter.

Finding the most optimal tenancy agreement length will depend on numerous factors. As the landlord, you should weigh the advantages and disadvantages of short- and long-term tenancy. Read the guide below by the experts in tenancy at AST Assistance.

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Periodic tenancies

A new fixed-term agreement is often the best course of action once the current tenancy ends. Such an agreement is made at the end of the current one, or when the tenants vacate the premises. 

However, you may decide to change the tenancy to a periodic one. Periodic tenancies are agreements that last from month to month until they are terminated by either the landlord or the tenant. As such, they do not have a set end date. These give landlords more flexibility to sell properties quickly and raise the rent more often.

In order to terminate a periodic tenancy, the landlord must serve a Section 21 Notice or a Grounds for Possession Notice.

Fixed-term tenancies

If you are looking for more stability and to provide long-term security to a tenant, you may consider fixed-term tenancies. Fixed-term tenancies can last however long you wish, up to seven years, and are often agreed by both the landlord and tenant to fit their needs. 

A longer tenancy is financially more reassuring for landlords, since it means there will be a consistent flow of rent and a lower chance of the property being vacant.

However, if you have a fixed-term tenancy, you cannot raise the rent unless you have specifically agreed to do so in the rental contract with the tenant.

When choosing the length of a tenancy, it is important to take into account the type of renter your property is likely to draw. A six-month lease may not be as desirable if you own a home that appeals to families. If the tenancy agreement’s duration is longer than three years, it must be created and signed as a deed.

What happens if you want to cut short an assured tenancy agreement?

Either party may terminate an AST at the end of a fixed term, or in line with a pre-negotiated break clause. If you wish to repossess your property to cut the tenancy short, you must always give the required notice (a Section 21 Notice), and may also need a court order. Before undertaking this process, you should always ensure that you understand your landlord's legal rights and that you are not at risk of breaching your tenants’ rights. Seeking the help of legal tenancy professionals will guarantee that you are taking the best course of action to manage your property, whatever type of tenancy. 

Currently, you must give tenants at least two months' notice to vacate a property. You cannot give this notice until four months of the tenancy have passed, and only in line with a break clause or at the conclusion of the fixed term. However, if the tenant is in blatant breach of the tenancy agreement (including being in rent arrears), you may have grounds to apply for a possession order by stating one of the Grounds for Possession set forth in the Housing Act of 1988. 

Receive bespoke assistance for your property tenancies

If you are deciding on the best type of tenancy for your circumstances, or are seeking ways to cut short a tenancy, you must do so in accordance with the law. To ensure you fulfil your landlord obligations and approach the management of your tenancies in the best possible way, get bespoke advice from our specialist team.

Contact AST Assistance today by calling 01706 619 954, emailing info@ast-assistance.com, or filling out our contact form here.

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