It is essential that your AST agreement covers you for all eventualities but you must also be aware that there are certain clauses you cannot include – tenants have rights beyond whatever is written down in the contract. We recommend that you use our legally watertight and easy-to-customise AST agreement, which has the added bonus of being free! Additionally, everything you could want to know about AST agreements (and more) can be found in Rentify’s guide ‘Landlords & Contracts’, which is available to our landlords. But for now, here are some key points which sometimes pass under the radar (if you are unsure about any of the terminology, please see Rentify’s handy glossary):
1.) Notice for Section 21 possession: Although an AST agreement allows you to repossess the property without giving a reason through a Section 21 notice (‘no-fault’ possession), this can only take place at the end of a fixed term period and 2 months after written notice has been given. The repossession can only take place a minimum of 6 months after the start of the tenancy, even if it’s a periodic tenancy.
2.) Changing terms: You must have the tenant’s written agreement to change any terms during the course of the tenancy.
3.) Rent review: You should include rent review clauses in case you need to increase the rent at any stage. With a fixed term tenancy, the clause should detail regular periods when the rent is to be reviewed. A clause stating that you can increase the rent whenever you like will almost certainly be unenforceable as tenants are protected by Unfair Terms in Consumer Contracts Regulations. This also means you may well need a justifiable reason to increase rent, either an increase in the Retail Price Index or after significant improvements have been made to the property.
4.) Ending a fixed term AST agreement: You cannot end a tenancy by simply allowing a fixed term AST to come to reach its end. You must provide the Section 21 notice. If you do nothing, the tenant is legally allowed to stay on under a statutory periodic tenancy whereby the terms of the AST agreement remain the same but it’s a periodic rather than fixed term tenancy.