The purpose of setting up a contract is to establish rules and regulations for both the landlord and tenants for the duration of the tenancy. Should a dispute arise, a well-constructed contract will help resolve issues more easily, without the need of involving third parties. Put simply, if you’re renting property, they are vital to the success of your business.


Types of Contracts

There are two major types of rental contract and one minor type, namely: Assured Shorthold Tenancy (AST), Assured Tenancy and License.

Assured Shorthold Tenancy

This type of rental agreement covers the basic rental situation between private landlord and private tenant alike. It is the simplest and most common tenancy agreement and normally has the following features:

  • The tenant and landlord live in separate properties.
  • The tenant controls the property in such a way that the landlord, or any other person, may not enter without notice, unless deemed an emergency.
  • The tenant pays rent to the landlord.

Assured Tenancy

This form of tenancy is less common and it offers poor security of tenure. This can make landlords look at them unfavorably, as it can make gaining possession of a tenanted property quite difficult unless the tenant actively decides to leave.

Fixed Term or Periodic Tenancies

The following types of agreement period can be implemented into either an Assured Tenancy or an AST:

Fixed term – The agreement period can last for weeks, months, years or any other specified length of time.

Periodic tenancy – The agreement period can last indefinitely, with rent being paid at fixed intervals.


A contract can also come in the form of a license, instead of a tenancy agreement. Although this form of contract is not common, it is usually used for short-term rentals and does not normally give the tenant permission to occupy the property exclusively.

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