Short Leases

Short leases are the type of lease contract that will be in place when someone tells you they are renting a flat. The same applies for a house. As the name implies short leases are really intended for short-term tenancies but it is very common for people to occupy the same property for a lifetime under a short lease that is continually renewed or extended. Tenants may also stay in occupation after expiration of the lease where they have security of tenancy under the law.

Rental payments under a short lease are normally paid on a weekly or monthly basis. Use of a rent book is common under such an arrangement and payments are often made in cash. Unlike long leases, property rented out under a short lease may also include furniture provided by the landlord in which case, the rent will be higher taking the rental of the furniture into account. Furniture is more often provided where tenants are expected to stay only for a short period of time, for example students and young professionals who are in a transitory period of their life. Longer term tenants generally prefer to have their own furniture.

There are a variety of common short leases available due to a number of changes in legislation over the years and the short term nature demands some flexibility.

There are a few standard terms used to describe lease contracts that may be useful for you to know about.

Regulated Tenancy

Regulated tenancies were designed to give tenants more protection. Regulated tenancies came into effect with the Rent Act of 1977 and the housing Act of 1980 giving tenants more security of tenure with private landlords. Naturally, such tenancies are not favored by private landlords and up until the recent introduction of the Assured Shorthold type of Tenancy, regulated tenancies were responsible for a major shortage of rental accommodation in the private sector.

A regulated tenancy gives tenants a number of benefits including: rental protection; the right to pass the tenancy to another member of the family who is living in the property if the tenant dies and in the case of divorce, the tenancy may be passed to a spouse by obtaining a court order. In addition, the landlord must obtain a court order to regain possession of a property.

Protected Tenancy

During the period of a Regulated tenancy before the lease has expired, the tenancy is termed a "Protected Tenancy". The typical rights of the tenants under a regulated tenancy are still in force.

Statutory Tenancy

When the lease for a Regulated tenancy expires, the tenancy may lapse into what is called Statutory tenancy. If the tenants stays in possession of the property, the tenant still enjoys the rights of the the regulated tenancy lease and has security of tenure. However he cannot assign or sell the lease. If the original tenant dies while the tenancy is a statutory tenancy, the tenancy can automatically be transferred to a member of the family as a statutory tenancy under the rules of transfer to a family member of a protected tenancy. If the first inheritor of the tenancy dies it can be transferred again as a statutory tenancy to a family member. If the inheritor of the tenancy at the second transfer dies then the tenancy is terminated.

Shorthold Tenancy

Under a shorthold tenancy, the tenant has a right to fair rent protection controls using a local authority rent officer to decide the fair level of rent. However the tenant does not enjoy the same security of tenure offered by a regulated tenancy. This type of tenancy is offered for a fixed period between one and five years.

Assured Tenancy

Under an assured tenancy, the tenant does not enjoy any fair rent protection but some degree of security of occupation. Once the lease contract expires, the tenant has the right to renew the lease as long as he has not persistently breached the terms of the original lease.

The lease contract is negotiated between the landlord and tenant for any rent and for any length of time. In addition, the terms and conditions of the lease stated in the contract are negotiable between the landlord and tenant, these may be things like not allowing the tenant to keep pets in the property or making the landlord responsible for paying for maintenance of the building in the case of a house.

On renewal of the contract a new rental payment may be negotiated. Failing an agreement, an open market rent may be applied. The tenant may claim compensation from the landlord if the landlord has failed unreasonable in offering a new lease to the tenant

Assured Shorthold Tenancy

As the name implies, an assured shorthold tenancy consists of features from a shorthold tenancy and an assured tenancy. For most residential tenancies created after 1997, this is the default type of tenancy created. The rent is agreed between the landlord and the tenant, and the tenant has little protection from fair rent controls. After the period of the tenancy agreement, the property automatically reverts back to the landlord; that is unless the landlord and tenant agree to a new tenancy.

If after the period of the tenancy has expired and the tenant does not go willingly, the tenant may stay in occupation and the landlord will have to obtain a court order to evict the tenant. If the landlord wishes to evict the tenant for any other reason during the period of the contract he will have to prove that the tenant has breached the terms of the tenancy contract and the tenant has to be given six months notice.

It cannot be stresses enough that both tenant and landlord should seek proper legal advice before entering into a lease agreement due to all the complexities. Additionally, for the landlords, when considering buying a property with existing tenants occupying the property, he should investigate the tenancy agreements of the existing tenants to find out what length of time tenants have left in occupation or if there are any issues with sitting tenants since this would have a considerably effect on the value of the property.