Deciding on the length of tenancy agreement can be tricky, especially in situations where “cowboy landlords” and short-term agreements are involved. Adam Smith, the popular economist, said, “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.” Tenants are sometimes evicted unlawfully if repairs are requested, and they are given two months notice to quit while being under a 6 month tenancy agreement. Law enforcement assistance is even drafted by these “cowboy landlords” in some cases. Let’s take a look at the type of Tenancy Agreement that exists:
- Shorthold Tenancy Agreement: This is the most common type of tenancy agreement in the UK, popularly known as the Assured Shorthold Tenancy. A shorthold tenancy agreement is usually agreed on by both the landlord and tenant, and they are usually between 6 months and 3 years. Contingent on the pre-agreed conditions, the tenancy agreement could be dissolved before the end of the contracted period. If there is a breach of contract on the part of the tenant, the landlord can take legal action, the same goes for the tenant.
What is the Assured Shorthold Tenancy?
The assured shorthold tenancy is a type of tenancy agreement that is commonly practiced in the UK and is regulated by the Housing Act of 1988. Under the assured tenancy agreement, rent is paid to a private landlord and the landlord does not reside on the same property as the tenant.
- Periodic Tenancy Agreement: When a shorthold tenancy agreement expires, the tenant may either move out or sign another contract with the landlord. The tenant may opt for a periodic tenancy agreement in this situation. If that is the situation, then there is no specified date for contract termination, and the rent is either paid on a monthly or quarterly basis. Maybe this philosophy works, Rory Vaden says, “Success is not owned, it’s rented and the rent is due every day”. Periodic tenancy agreements are flexible and beneficial to tenants; a tenant can move out of the premises once a notice is submitted as and when due.
- Permanent Tenancy Agreement: A permanent tenancy agreement is a tenancy system that is fixed for a predetermined period between the landlord and the tenant. The permanent tenancy agreement can secure the interests of both the landlord and the tenant. If the tenant is seeking a long-term tenancy, then the landlord is assured of steady income on a monthly basis, and that means stability for both. A long-term tenancy can help the tenant to settle down and get used to their environment. Because of its fixed nature, a permanent tenancy agreement can be the perfect solution to the challenge of “cowboy landlords“. If there is a breach, legal action can ensue.