If you are planning to rent a property, understanding the types of renting contracts is essential. Renting contracts outline the relationship between you and your landlord, and they can vary significantly. In this article, we will discuss the most common types of renting contracts.
1. Assured Shorthold Tenancy (AST)
This is the most common type of renting contract in the UK. An AST is an agreement between the landlord and tenant, and it provides specific rights and responsibilities for both parties.
An AST typically lasts for six months to a year, and it can be renewed or extended if both parties agree. Under an AST, the landlord can evict the tenant after the initial fixed term for any reason, as long as they give two months` notice.
2. Non-Assured Shorthold Tenancy
A non-assured shorthold tenancy is similar to an AST, but it doesn`t provide the tenant with the same level of protection. With a non-assured shorthold tenancy, the landlord can evict the tenant without having to give a reason, as long as they give reasonable notice.
Non-assured shorthold tenancies are less common than ASTs, but they can be used in situations where the landlord wants more flexibility.
A licence is different from a tenancy agreement. With a licence, you are only granted permission to occupy the property for a limited time, and you don`t have the same rights as a tenant.
Licences are most commonly used in situations where individuals are living in a property temporarily or a landlord is renting out a spare room in their house.
4. Company lettings
A company letting is a renting contract between a landlord and a company, rather than an individual. The company becomes the tenant and is responsible for paying the rent and fulfilling the terms of the contract.
Company lettings are often used when businesses need to provide accommodation for their employees.
5. Rent to Buy
Rent to Buy is a new scheme that allows tenants to rent a property with the option to buy it at a later date. Under the scheme, a portion of the rent is put towards a deposit, which can be used to purchase the property.
The scheme is designed to help first-time buyers get onto the property ladder. However, it`s important to note that Rent to Buy agreements can be complex, so it`s important to seek legal advice before entering into any contract.
In conclusion, understanding the types of renting contracts is critical when renting a property. Make sure you carefully read and understand any agreement before signing it to ensure you have a clear understanding of your rights and responsibilities as a tenant.