When it comes to letting a property, having a proper tenancy agreement in place is an absolute must. The most common, and indeed popular, choice for private landlords whether new, accidental or experienced is to have in place an assured shorthold tenancy agreement (or AST). With one of these in place you afford yourself the control and financial protection you need for your houses and flats to rent.
To give you a clearer idea of what these involve, in this post we take a closer look at the fundamentals of an assured shorthold tenancy agreement, why they’re important for private landlords and how you can go about creating one.
AST agreements explained
The short, definition of an AST is it’s essentially the contract the landlord has between themselves and the tenant. It details the terms of the tenancy and can cover the amount of rent the tenant has to pay, any repair responsibilities, as well as the length of the tenancy.
There are certain criteria to meet to be able to create an AST agreement, they are as detailed on Gov.uk:
‘A tenancy can be an AST if all of the following apply:
- you’re a private landlord or housing association
- the tenancy started on or after 15 January 1989
- the property is your tenants’ main accommodation
- you don’t live in the property
A tenancy can’t be an AST if:
- it began or was agreed before 15 January 1989
- the rent is more than £100,000 a year
- the rent is less than £250 a year (less than £1,000 in London)
- it’s a business tenancy or tenancy of licensed premises
- it’s a holiday let
- the landlord is a local council
Typically, these agreements are for a shorter six-month period but can be up to twelve months. They also give tenants the right to have notice of eviction and deposit protection.
Why they are important and how they keep you safe
These legally binding documents are important because they protect both you and your tenants in a number of ways.
- Firstly, as a private landlord you’re financially secure as the agreement will clearly state the amount of rent you expect. From the tenant’s point of view this is also fair and beneficial as they will too know how much they need to pay
On top of this, you get the financial security in knowing that you’ll receive a fixed income for these months
- With the shorter term of the agreement, you are legally entitled to evict a tenant once the fixed term is over and you have the flexibility to not renew the tenancy as you see fit. This is especially useful if after six months you feel the tenants are unsuitable or a liability
- If in your agreement you outline that the tenant has an obligation to maintain the property and the surrounding gardens, providing you have trustworthy people living there, you can rest assured your properties will be looked after
Creating your AST agreement with Rentr
Instead of paying somebody else or an agency to create your tenancy agreement, you can do this yourself with the new, easy to use Rentr property management app.
Details regarding what needs to be included in one of these forms can be found online on Gov.uk covering the official Government guidelines. You can use this information and the template forms available with the Rentr app to create a legally binding agreement, digitally from the convenience of your smartphone or tablet. What’s more you can then get tenants to sign these electronically via the app, again saving you time and speeding up the letting process.
To return to a key point, it really is essential for any landlord with private properties to rent to have a secure tenancy agreement in place no matter what their circumstances. The portfolio you have is a huge investment opportunity and a proper agreement will protect this asset and lower the risks involved in private lettings. So, make sure you consider using Rentr to make this process simple and straightforward for you and your tenants.