Here things can sound a bit technical but I’ll do my best to make it as clear as I can. Nevertheless – with money like this changing hands – you owe it to yourself to learn some quite specific things. Landlord-tenant law is immense, but assured shorthold tenancies only utilise a small core of this existing legislation. You only need to know about the parts of them that affect you and how you’ll live. Those of you with more appetite for detail can find unlimited browsing resources online.

So let’s start with the absolute basics. And let’s keep things simple. Almost every tenancy now available to you will be one type or another of assured shorthold tenancy. They are the current currency that keeps investment pouring into the rental market.

What is a lease?

It’s a contract. Pure and simple. It can be anything from four pages long to 30 plus pages of close typed script in size 8 font. However impenetrable, always insist on taking the time to read your lease. Once you’ve signed it, you’re bound by it. And by all those itty bitty things hidden in sub clause 2a) iv – or whatever. If you don’t want to sign it, there’s no compulsion.

So read leases and make decisions about what you want or don’t. You are half of this contract – in fact you’re the one with the money everyone wants – so learn how to make a deal. Good lettings/rentals are ‘win win’ situations, where both sides get a degree of what they want from contracts.

Private landlords

The majority of private landlords buy leases from legal suppliers like Oyez. They are cheap, simple to understand, comply with fair contract terms and legally enforceable. They don’t contain any hidden clauses and everything in them complies with the terms of the relevant housing legislation. They rarely included clauses allowing non-negotiable rent increases. We use them because our tenants find them straightforward and so do we.

Agents

The majority of agents have their own leases drawn up by in-house legal services. Many have inbuilt fees, which can be demanded and many incorporate annual rent increases, which are not negotiable if signed by tenants. Ask for time to read through these leases – however long they are – and insist that anything you don’t understand is explained. Because agencies rely on volume with many properties, many tenants and of course lots of itsy bitsy charges that no one mentions out loud, make it your job to read what you’re agreeing to before you sign any lease.

But I don’t have a lease!

Although it’s unwise, some landlords still let out property without paperwork. However by handing over money each week/month, a contract is still created – paperwork or not. So you do have a lease. It’s an unwritten lease. And, so long as you moved in after 1997 it’s almost without exception an assured shorthold lease. With that contract, however informal and unclear, come some rights for tenants (landlords too). You are legally entitled to certain information in writing: start dates, the amount of rent payable and when to pay it. However, like everything else to do with rentals, some landlords comply with nothing. Nevertheless, you’re still legally entitled to that six months’ initial security, just like all other similar tenants. Maybe your landlord simply doesn’t know – or doesn’t want to know that – but that’s the legal position. With or without words a contract with rights on both sides exists.

All these exceptions and much more are in Appendix A of the government’s essential booklet that I keep mentioning: Assured and Assured Shorthold Tenancies: A guide for tenants – product code 97 HC 228C. Call 0870 1226 236 – they’re free, a mere phone call away. They’re also an absolute godsend to tenants trying to deal with landlords/agents who refuse to believe that you have a point to make that’s valid. So get one of these booklets. And wield it wherever necessary when management is being unreasonable.

Assured shorthold leases

Like it or not, no landlord or agent can insert things into leases that conflict with the original or revised legislation (1988/1996). Sounds like gobbledygook? Well, let me give you an example. By law, landlords need to give their tenants two months’ written notice that they need to leave, to exercise their shorthold rights. That’s it, the housing legislation can’t be altered, no matter what’s been sneaked into the lease to shorten that notice period to one month – two months’ notice it is (unless your landlord is acting on a lease breach through court).

Pre-1997 tenants

Tenants who have lived in their units since before 28 Feb 1997 must read this lesson thoroughly. Many tenancies were incorrectly created before this date and a large number of tenancies with unlimited security of tenure (unless lease terms are breached) were created. Many may still exist today.

Recognising what had happened the government changed the law in 1996 so this can no longer happen. Assured shorthold leases no longer require advance paperwork.

As for the rest of you in the here and now, these are the two most widely used types of assured shorthold leases you’re likely to be offered:

• fixed term
• periodic or contractual period

and are outlined below.

Fixed term tenancy

The most popular type by a mile is the fixed term tenancy. This means, in a nutshell, that a specific length of time will be offered for the lease to run initially. This is usually six months, but can be longer/ shorter. Six months is popular because it offers maximum mutual benefits, hence its huge popularity. Look on it as a trial run for both parties. Beyond that there are simple ways to stay put. Assured shortholds can and do run for years – even when they started out with an initial six-month fixed term.

During that fixed term, tenants enjoy a relative period of security. If the initial fixed term offered is, say, a year, then your period of security and rental liability becomes a whole year long. Assured shortholds restrict a landlord’s/agent’s options for obtaining a ‘no fault’ guaranteed possession order through the courts until the initial fixed term (or six months) expires, but remain hugely popular because they suit a wide range of circumstances. Also remember that, just as every tenant who hopes their new rental will be a fresh start, every successful landlord is an optimist. We’re not looking for reasons to kick you out from day one, but always hope this new tenancy will be trouble free, long term and, of course, profitable.

What you gain on the roundabouts you can lose on the swings with fixed terms.

Here’s a thought to consider. Signing up for anything beyond the normal six months ties both parties into longer obligations to each other. You may have just found a perfect agent, a perfect landlord ... but on the other hand... So six months is also a fairly decent length of time to test out your own side of the tenancy.

Many agents try to insist that their tenants sign up for an initial fixed term of a whole year from the outset. Again, these things remain in your hands. No one can force you to sign a lease that you don’t like the terms of. If you don’t want what’s being offered, then either negotiate or find an alternative unit with terms that you prefer. A modern landlord/agent with a mid-range property is no longer offering a rarity. Many areas have more property than tenants. So never let management bully you into accepting what’s best for them. Learn to look out for you.

Balancing the pros and cons on fixed terms

It’s a tricky balancing act, but try to work these fixed terms to your advantage if you can (it isn’t always easy though, some landlords/agents have very resolute policies on these matters). Students for example might do well to try negotiating a nine-month lease for their academic year. Many agents will refuse longer initial fixed terms than six months, simply because insisting on a shorter lease gives them the opportunity to offer either a whole new lease or some other dandy thing that agents call a lease extension fee – and again charge you for the privilege of staying on a while longer. Nice work if you can get it.

Final clarification

Because this is the most likely option you’ll get as a modern tenant, let’s run through it again.

• This fixed term is the legal length of time that ties you and your landlord/agent together into a binding contract.
• You agree to pay rent for the whole of that time and keep the lease terms, in return for which you get some security of tenure.
• The longer the fixed term, the longer your security and the length of time that you’re legally responsible for the rent.
• The shorter the fixed term the shorter your rent obligations and your greatest level of security.
• If you want to leave before your fixed term expires, unless your landlord agrees to end your tenancy (and a surprising number of independent landlords will if, say, work demands a relocation that’s beyond your control), you will remain liable for the rent for the remainder of that agreed fixed term – unless or until your landlord/agent finds a suitable replacement tenant.

Periodic or contractual period tenancy

Assured shorthold leases can also be run as periodic or contractual periodic tenancies (which don’t have any fixed term). Basically, these leases run on a month by month basis, meaning that tenants aren’t contractually bound into them from the start for any fixed period of time. Meaning also that these types of leases are rare. Tenants who don’t have fixed terms still enjoy that same six months relative security before the landlord has any guarantee of possession. Therefore these arrangements simply don’t balance up. Tenants get security of tenure for six months, while landlords don’t get an undertaking on rent for the same period of time. Periodic tenancies give landlord/agent a slightly wider range of options on possession at an earlier stage. They suit (in some cases) tenants who have no intention of staying long – but every time the landlord agrees to this, s/he’s running a risk on guaranteed possession without guaranteed rent for the same timeframe. This tends to be a ‘top end’ option – used for the business classes rather than the majority of tenants who are looking for homes.

What happens at the end of the initial fixed term?

As usual, one of several things can happen. These are the most likely scenarios, assuming that you are happy to stay on and your landlord/ agent has no concern about you doing so.

Option 1

Your landlord/agent approaches you and offers another brand new lease with another fixed term. This ties both of you back to broadly where you started. Landlords can’t get guaranteed possession until a new fixed term (or another six months) has expired and tenants are obliged to pay rent for another whole fixed term.

Sometimes it’s done this way to incorporate a change in terms that wasn’t written into the old lease. For example a rent increase will appear with the new lease. It’s always up to you as a tenant to decide whether or not to agree to sign a new lease. Of course, declining new terms means finding somewhere else to live. Try negotiating on unexpected rent increases, especially where they come along in under a year. Good tenants with good track records can often trigger a change of heart. But if the management insists that new terms are the only ones on offer you either accept and sign or give notice to leave and find somewhere else.

Option 2

Nothing happens. You continue paying your rent and the landlord continues accepting it. Then, without any further commitments, undertakings or paperwork, the landlord reaches that secure place, beyond the fixed term where they can obtain guaranteed possession if things go pear shaped – and tenants don’t have to commit for another whole fixed term.

This type of arrangement is called a statutory periodic tenancy. It works brilliantly for many landlords and tenants because it offers such great flexibility. It’s rarer in agency lettings because, frankly, there’s no paperwork that agents can charge for. Under a statutory periodic, landlords and tenants are each able to give notice whenever they choose – so long as they observe the specific rules on giving notice to quit. One of my assured shorthold tenants stayed on for 13 years without ever needing a new lease.

Option 3

One or other of you decides to call it a day. In that case, landlords or tenants must give written notice to close down the tenancy. There are other variations on this theme, but in the overwhelming majority of cases one of the above will happen.

Giving notice to leave

Letting people know your intentions in writing is essential. Don’t imagine that your landlord/agent will somehow just guess that you intend leaving at the end of your fixed term. On the contrary, unless they hear from you, they’ll assume that you want to stay on. You must tell them that you intend leaving in writing – at least one month beforehand. So, if you intend leaving at the end of a six-month fixed term, write and inform your landlord that you will be leaving then, no later than five months into your lease.

What you need to know about leases

• They must be signed by both landlord and tenant (or agent).
• They must be witnessed and dated to be valid.
• The landlord/agent has a copy, you have an identical copy.
• You are legally obliged to observe all the terms of the lease you have signed, unless something has been added which is not acceptable in law (if you’ve been asked to sign something that is obviously weighted against you, get your local housing officer or Citizen’s Advice Bureau to check it out).

Security of tenure really matters

Good tenants who pay their rent on time, look after the unit and don’t cause damage (or hassle the landlord with an endless stream of daft demands) have all the security they’ll usually ever need, so don’t get too hooked up on lengthy fixed terms. Landlords/agents want tenants in place and paying rent. That security aspect is already largely in your own hands and it’s called good tenant conduct.

Landlords/agents only bother with all the hassle and costs of forcing out troublesome tenants in the most unusual of circumstances. Abide by your lease and you’ll become a welcome partner in what can often become a lengthy business partnership.

Break clauses

Sometimes, before agreeing to rent a property for a fixed period of time, a tenant will ask for a break clause to be inserted. These give an opportunity for a tenant to leave on a certain date, agreed mutually before the tenancy begins, written into the lease and usually mid-way through at, say, three months. They are not standard clauses, and will certainly not be found in a standard lease. They are quite common in more expensive units, and almost standard in company lettings. Seek specialist advice, or use a very reputable agency if you are looking for this type of arrangement.

A reality check for many tenants on tight budgets

No matter how well informed they are, tenants can and do still find themselves in property which is unfit to live in, or positively unsafe. The huge demand, particularly in university towns, and now some very expensive cities (especially in the south east) has caused a real shortage of safe, affordable accommodation. If you have been fortunate/ determined enough to obtain a lease from your landlord/agent, which covers the full period you wish to live there under the first fixed term, you do have the relatively safe option of asking your local environmental health department to inspect, and at least check if you are covered under new and existing safety laws.

Why? Because, no matter what the outcome, you can’t lose your home until the fixed term has expired unless you break a lease term.

If however you have only been able to obtain a ‘fix’ of six months when perhaps you need nine to complete your course, or you have a year’s short-term employment contract and a six month fixed term, you run the genuine risk of being asked to leave if you complain at all. Landlords running unsafe multi-let properties can take a very dim view of being ‘reported to the council’.

Meanwhile all too often, tenants dependent on lease extensions are too afraid to complain about anything at all. It can take a brave person indeed to insist to some of the more assertive landlords that, as tenants, they enjoy certain rights, however limited.

• Being prepared before you become a tenant is the best safeguard you can have.
• Being aware if you already are a tenant is the second best.

Never forget, your lease does offer you some safeguards, if you know where to find them. While some landlords can become a bit belligerent, they too are bound by the contracts they entered into when they took your rent. And there are a surprising number of organisations out there to help you through difficult times.

Does it matter when my lease began?

It can be crucial! Following the introduction of assured shorthold tenancies in 1988, many landlords and some agents did not comply with the strict requirement to serve the tenant with a Section 20 notice advising them that the tenancy was an assured shorthold. Despite everyone signing documents titled ‘assured shorthold tenancies’, unless the Section 20 Notice that the tenancy was an assured shorthold was served before the tenancy agreement was signed, the tenancy created was in fact a straightforward assured tenancy, with extensive security of tenure inadvertently given to the tenants, often without either party realising what they had accidentally created – let alone just been handed on a golden plate.

Recognising the problem, revisions were put in place for all tenancies starting on or after 28 February 1997, and now, unless otherwise quite specifically stated in writing, all tenancies (within the framework – i.e. the overwhelming majority) are automatically assured shorthold tenancies.