Letting your property? In certain circumstances you should not use an assured tenancy – the most common used being an assured shorthold tenancy (AST) to let your house or flat.
They are not applicable for example to:
- a letting to a limited company.
- a tenancy where the annual rent is more than £100,000.
- where the landlord is a resident landlord.
If the above conditions apply you would normally grant a “Common Law” tenancy or where you are resident a licence to occupy a room.
What is a Common Law tenancy?
A common law tenancy is one that falls outside the statutory regimes and is instead governed by the common law.
For example, a letting to a company cannot be an assured tenancy (or an AST) because of the exclusions listed in Schedule 2 to the HA 1988. So, the grant of a residential tenancy to a company is usually done using a common law tenancy. This might be used where a company rents a property for the use of an employee who is working away from their usual location.
A residential tenancy in England where the yearly rent exceeds £100,000 will also normally be a common law tenancy.
Security of tenure for common law tenancies
The tenancy agreement should specify the circumstances in which either party can end the tenancy during the term. For example, if the tenant is in breach of the agreement. At the end of the term, the landlord is entitled to possession of the property.
If the tenancy is a periodic tenancy, the agreement should state that the landlord can end the tenancy by serving a notice to quit. The notice procedures in section 8 and section 21 of the HA 1988 do not apply to common law tenancies.
However, the landlord of a common law tenancy may still have to obtain a court order to gain possession of the property (section 3, Protection from Eviction Act 1977).
Deposit protection for common law tenancies
Deposits taken in connection with a common law tenancy do not have to be protected in a tenancy deposit scheme.
If you require an Assured Shorthold Tenancy, Common Law Tenancy or Licence Agreement we can prepare this for you at a fixed cost. Contact Fred Rylah or Mark Sadler on 01708 757575 or email fred.rylah@ker.co.uk or mark.sadler@ker.co.uk