This guide explains the key clauses in our Assured Shorthold Tenancy Agreement template in order to give you a clear understanding of what the document covers and how easy the document is to complete.
The agreement is for use by a landlord to let a single residential dwelling to a tenant to live in.
You should take notice of the notes at the start of the agreement (and leave them in for the tenant’s benefit).
You should take advice if you are not familiar with the responsibilities and duties of a landlord or how the deposit must be held in a tenancy deposit protection scheme – there are penalties if you do not sort this out quickly after receiving it.
Clauses in this Assured Shorthold Tenancy Agreement
Date – Insert just the year at this stage. Handwrite the rest of the date in the agreement once both the parties have signed it.
Party clauses – You will need to insert the names and addresses of party 1 (the landlord) and party 2 (the tenant). If the landlord is a company, use the following alternative format and insert the country where they are incorporated and their company number: “[COMPANY NAME] incorporated and registered in [COUNTRY OF INCORPORATION] with company number [NUMBER] whose registered office is at [REGISTERED OFFICE ADDRESS]”.
1. Interpretation – This clause defines the main terms used in the agreement.
- Contents – list anything in the property in a separate inventory that is signed by you (or your agent) and the tenant. You should also use the inventory to state the condition of any such items, as it can later be used as evidence that the tenant has damaged them beyond fair wear and tear if that proves to be the case. You may need to go into a good amount of detail here (e.g. to state that interior doors are painted) as you can have difficulties getting compensation out of the tenancy deposit protection schemes if you do not. A photographic schedule of the condition of the property inside and out may also be of great help if you need to make a claim against the tenant’s deposit later on. (A template inventory is available to purchase separately from Legalo’s website – click the link.)
- Deposit – If there is a deposit, fill in the amount; if not delete the definition. As noted above, if you take a deposit, it now needs to be held by one of the approved deposit protection schemes – the landlord or its agent cannot hold onto it.
- Landlord’s Agent – Delete the definition if there is not an agent, i.e. the landlord is managing the property in person.
- Rent – Insert the level of the rent payable and the day of each month that it is due on, e.g. the first day of each month. You should set the rent at a sufficient level that it includes the following:
1. if it is a flat, any service charge levied for the common parts of the building (e.g. cleaning and repairs to lifts, stairs or car park);
2. buildings insurance;
3. an allowance for fair wear and tear on the contents, carpets, etc in the property and for redecorating when needed, because you cannot charge extra for this; and
the amount your agent (if any) charges to manage the property.
- Term – Check and amend the minimum term as appropriate. The tenancy will roll on after the term until one party gives notice to terminate it in accordance with clauses 9.1 and 9.2.
2. Letting and charges – This is the main clause setting up the tenancy. In addition to the rent, as per clause 2.3, the tenant must pay for the Council Tax due and the utilities used – these are to be paid directly to those due them and not to the landlord or the agent. Clause 2.4 (the reference to “quiet enjoyment”) means the landlord must not disturb the tenant by visiting the property except as permitted in this agreement, e.g. to inspect the property for damage. If there is no agent, delete the references to one in clauses 2.2, 2.4 and 2.5.
3. Deposit – If there is no deposit to be taken from the tenant, delete this whole clause. If there is no agent, delete the 2 references to one in clause 3.1. In clause 3.2 fill in the name of your chosen deposit protection scheme and their website address, so that the tenant can check their terms and how they operate. You may also wish to hand the tenant a leaflet about them, which is normally available from their website.
4. Use – This clause sets various common-sense limits on the way the tenant can use the dwelling, e.g. a ban on keeping pets in clause 4.5. If the landlord does give permission for pets to be kept, then a larger deposit might be advisable (in case of damage by the pets) and inserting special conditions in schedule 1, such as the tenant having the carpets professionally cleaned at the end of the tenancy and producing a receipt as proof that this has been done.
In respect of clause 4.7, if the dwelling is held by the landlord on a lease (e.g. a flat in a block of flats, where the landlord’s interest will most likely be a long leasehold one), then there will no doubt be other restrictions or requirements that the tenant ought to be made aware of and should comply with, and a copy of the landlord’s lease should be provided to the tenant (and annexed/attached to this tenancy agreement). In clause 4.8, if there is no agent, delete the 2 references to an agent.
In relation to clause 4.8, watch out for the need to extend your buildings insurance cover if the tenant is absent for a prolonged period – many insurers do not cover this as standard and will charge extra if you want the cover (this also applies if there is a significant vacant period between different tenants). If the dwelling is not strictly non-smoking, delete clause 4.9.
5. Repairs, etc – This clause covers repairs and the duty of the Tenant to look after the property and treat it properly. If there is no agent, delete the reference to one in clauses 5.4, 5.5, 5.6, 5.9, and 5.10. Clause 5.1 and note 4 refer to the landlord’s duty to keep much of the dwelling in good repair at his/her own cost. Clause 5.3 refers to the need for the tenant to keep the property properly heated and aired so as to avoid growth of mould, e.g. in the bathroom. The landlord or his agent should carry out regular and careful inspections to check the property is being looked after by the tenant, e.g. every 6 months.
For example any “trickle ventilation” slots in modern double-glazing should be checked to see that they are left open. Clause 5.5 refers to the tenant’s having to pay if they cause damage beyond what is considered to be fair wear and tear, but remember that:
- it is better to keep an eye on the tenant by a thorough regular inspection (as per clause 5.6), than later finding out that more damage has been caused than can be covered by the deposit (and deposit protection schemes can seem weighted in favour of the tenant and force the landlord to go to extreme levels of proof before they will pay out any compensation to the landlord); and
- good references on the tenant from previous landlords are also important before you let in someone who might abuse your property.
6. Other obligations of the tenant – This clause covers various other duties of the tenant and the right in clause 6.3 for the landlord to arrange viewings for prospective purchasers or tenants towards the end of the tenancy. In clause 6.3, if there is no agent, delete the reference to one.
7. Data protection – This permits the landlord and agent to share personal data on the tenant if they need to occasionally and to carry out credit checks on the tenant. In clause 7.1, if there is no agent, delete the reference to one.
8. Re-entry and repossession – In all circumstances if the residential tenant will not leave voluntarily, you will need a court order to evict the tenant in accordance with clause 8.2. The right under clause 8.1, to take possession does not mean you can do so without a court order for eviction – but it does mean that even during any fixed term you could “forfeit” the remainder of the fixed term tenancy (i.e. terminate it early) due to such a situation or due to the tenant’s breach, so long as (a) you serve the right notices and (b) you then get a court order. If in doubt, take legal advice.
9. Termination – Clause 9.1 provides that the landlord can terminate the tenancy at any time on giving 2 months’ notice to the tenant, provided that the earliest termination date is 6 months after the start of the tenancy.
In relation to an assured shorthold tenancy it is not legal for an order for possession to take effect earlier than six months from the commencement of the term of the original tenancy, so this clause ties in with that statutory restriction. If the tenant does not leave at that point, you need a court order to evict the tenant – see the note on clause 8 above.
Clause 9.2 provides that the tenant can terminate the tenancy at any time on giving 1 month’s notice to the landlord, provided that the earliest termination date is 6 months after the start of the tenancyHowever if the parties agree something different at the time, they can have an earlier date or terminate on shorter notice. Where the landlord wants to terminate, he has to give notice to the tenant in the correct form – if in doubt take legal advice.
10. Following termination – In clauses 10.1.3 and 10.2, if there is no agent, delete the references to one.
11. Special conditions – If there are additional conditions you want to impose e.g. for the particular property or tenant, then you can add them into Schedule 1. If there are none, delete Schedule 1 and clause 11.
Schedule 1 – If you have any special conditions, then state them in here. If there are none, you can delete the whole of the Schedule and clause 11.
As you can see the agreement is comprehensive but still simple to complete and can be drafted in about fifteen minutes.