Updated non-assured tenancy agreements now live
New non-assured tenancy agreements, updated to reflect changes coming in under the Renters’ Rights Act are now live.
Most tenancies are assured, with the most common, the Assured Periodic Tenancy (APT), replacing the Assured Shorthold Tenancy (AST) in England when the first phase of the Renters’ Rights Act came into force on 1st May this year.
However, some tenancies cannot be assured tenancies. These non-assured tenancies exist outside most of the regulations applying to the private rented sector – including the Renters’ Rights Act.
The agreements updated to make this clear, to ensure landlords and tenants know where they stand.
How do I know what type of tenancy I have?
APTs are now the default tenancy in England, and if you have created a tenancy at any point since 15th January 1989 it is likely to be an APT if it ticks all these boxes:
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The rent is between £250 (£1000 in London) and £100,000 per annum.
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The tenants are people rather than an organisation such as a company or a charity.
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The property will be the tenant's main home.
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The landlord does not live in the same property as the tenant.
If you don’t meet all these criteria – you will have a non-assured tenancy.
What differences exist?
As explained above, the primary – and major – difference is that most of the regulations that apply to the private rented sector do not apply to non-assured tenancies.
For example, deposits don't need to be protected, landlords use a 'notice to quit' to terminate the tenancy rather than a section 8 notice, and they can also charge fees that are restricted for landlords with APTs.
Also, in the post Renters’ Rights world, landlords with non-assured tenancies can still offer fixed terms and can increase the rent via contractual clause
However, these tenancy agreements can only be used in very specific circumstances.
What types of tenancies are non-assured?
Non-assured tenancies typically fall into one of four categories:
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Company lets, if your tenant or tenants are a limited company, limited liability partnership (LLP) or other incorporated body (rather than individuals).
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Resident landlord, if you are living in the same building as your tenant (as your main home), but don’t share any living accommodation. (Note: This does not apply if the building is a purpose-built block of flats).
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Non-resident tenant, if you are certain that this will not be the tenant's main home, nor will it be during the lifetime of the tenancy.
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High value tenancy: if the rent is less than £250 per year (or £1,000 in Greater London) or more than £100,000 per year.
These are Common Law tenancies where the rules and obligations are primarily based on the terms of the contract rather than housing law. They also have different rules around the notices you serve to end a tenancy.
So, what has changed?
Each of the tenancies has been updated to include an automatic rent review clause. This happens automatically without the need for notice on the anniversary of the tenancy starting.
Company Lets
This agreement will typically be used where you let out your property to a company who then place their employees inside the property, with the agreement updated to make it clear that the company is permitted to grant a licence to occupy to members of staff but not sublet it without permission. If they do the company is responsible for ensuring they comply with the Renters’ Rights Act.
This is to reflect the fact that a company let could be complicated by a company subletting the property to an employees as their main home. If this is the case, they will have entered into an Assured Periodic Tenancy with the company in question and it may be more difficult or costly to gain vacant possession.
In these circumstances you could end up becoming the landlord for these subletters if you end the agreement before they leave – so you will need to make sure you have their details and all the documents related to their APT before the company let ends.
You should check that the company understand its obligations as their landlord, as you could be held liable if they fail to meet them.
You can find more detailed information on this – and the new non-assured tenancy agreement here.
Non-resident Tenant
We have added a new tenancy agreement to be used where tenants are not using the property as their main home.
Sometimes tenants may not intend to use your rental property as their main home, for example if they are moving temporarily for a work placement or short contract they may want to keep their family home but also need a second place to live in during the week while they work. In these cases they would be classes as a ‘non-resident tenant’ and so would need to sign a non-assured tenancy.
To make sure they fall into this category you can consider a number of factors including:
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Whether the tenant's children will be living with them
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Whether they will be occupying the property continuously without visiting their other home
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If they're bringing all their belongings with them
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Whether they have proof of another permanent residence in the UK.
If you are satisfied they meet the criteria then they can sign the agreement – but make sure you are kept up-to-date as the requirements will change if they decide they decide they want to make it their main home.
High Value Tenancy and Resident Landlord agreement
These agreements have had updates to include a rent review clause, with some other smaller changes to wording to make them clearer and easier to use like allowing service of notices via email.
- The Resident Landlord Agreement will typically be used where you have converted a home into multiple dwellings.
- The High value tenancy agreement is available for use where the rent per annum is greater than £100,000.
More information
For more information on non- assured tenancies click on the links above. For more on assured tenancies please visit our Renters’ Rights Hub here.
You can also find the templates for Assured Periodic Tenancies (APTs) here.
