Very often, a well functioning flatshare is made up of a group of friends, or of people who may not have known each other at the outset, but have become friends over time. Flatmates who get on make living together enjoyable, and living in a flatshare can be particularly helpful to those who have just moved into town and are looking for new connections and a friendly environment to live in.
Equally, when room seekers view a room in a flatshare, the decision on which candidate to choose is often made based on intuition and on how good the match between the room seeker and the other flatmates appears to be. But this is precisely a situation where the legal aspects of a flatshare can easily be neglected – people get on, so why bother about signing a contract? It does, indeed, feel awkward to discuss legal aspects or to hand out papers to sign. However, this aspect should not be neglected. Rather, it is best to deal with it in the beginning and sign the right piece of paper.
Whether you are looking for a flatshare or for a flatmate, it is important you make sure that the legal aspect of your tenancy is being addressed properly.
Not only will many of you need a tenancy agreement when, for example, you plan to open a bank account. It will also help you out if something really goes wrong in the flatshare – with the landlord (be it a live-in or live-out landlord) or with other flat sharers.
So what are the main types of tenancy agreements for flatshares in England and Wales? You should make sure you choose the one fitting your purpose and situation.
The Assured Shorthold Tenancy (AST, Housing Act 1988)
The assured short-hold tenancy, regulated by the Housing Act of 1988, is the default agreement used for tenancies. It can be used for either self-contained flats or for flatshares.
In the case of a flatshare, the live-out landlord and the tenants can agree on two different options:
- The shared AST: all flat sharers will rent the property as a group and sign a joint contract with the landlord.
- The room only AST: the landlord rents out individual rooms, and each flat sharer has their own individual agreement with the landlord
No initial fixed term is required, although the parties may agree on one. With the tenant’s consent, an AST can also be for less than six months. Alternatively, a periodic tenancy (i.e. a tenancy running from month to month or week to week) may be set up.
Under the terms of the AST, the tenant’s deposit must be held and protected under one of the government’s approved deposit schemes. When the fixed term ends, the tenancy runs on unless either party decides to end it.
Handing in notice under the AST
The Section 21 procedure regulates how to hand in notice to the tenant and obtain possession. Under Section 21, notice must be given to the tenants at least two months before the date they should leave the property. A judge won’t be able to grant a possession order to come into force already during the first six months of the tenancy. Consequently, even if landlord and tenant agree on a fixed term of, for instance, just three months, there is no guaranteed possession right until six months have expired: the AST gives the tenants the right to stay in their home for a minimum of six months. Nevertheless, the landlord is allowed to start proceedings for possession already before the end of that six months period.
In case the notice is motivated by rent arrears or any other breach of contract by the tenant, Section 8 applies. Depending on the tenancy terms that have been broken, the tenants will be given between two weeks and two months notice. The landlord can apply for a possession order to the court if the tenants have not left by the specified date.
Lodger’s Agreement (a.k.a. Excluded Tenancy Agreement)
Renting a room from a live-in landlord isn’t the same as renting from a live-out landlord. The live-in landlord is one of the flatmates renting out one or several rooms in their own home, and the Lodger’s Agreement hence is a license allowing the lodger(s) to live in the landlord’s house, rather than a tenancy agreement. It is therefore different from an AST, which has important implications.
Key differences between Lodger’s Agreement and AST
There are two crucial differences between the Lodger’s Agreement and the AST:
- First, the Protection from Eviction provisions do not apply to a Lodger’s Agreement. This implies that a tenant can be evicted without a Court order as long as the landlord gives notice as required by the agreement. The minimum notice period of four weeks is not required either.
- Second, if the landlord takes a deposit, it does not need to be protected under one of the government deposit schemes.
Important: the Lodger’s Agreement does not apply to shared access (i.e. if the landlord lives in the same house but has a self contained flat separated from where the tenants live).
An agreement between flatmates may be useful to regulate key aspects of life together between those sharing the house. It is less formal than a tenancy agreement, but it is helpful to cover the basics and potentially include responsibilities for key duties (who pays what bills, who is in charge of finding new flatmates, etc.).