Assured shorthold tenancy vs common law tenancy

Why it matters

The classification of a tenancy as assured or common law has profound practical and financial consequences for landlords. It dictates the procedures for gaining possession of the property, the requirements for protecting tenancy deposits, and the application of various tenant protection statutes. Misidentifying the tenancy type can lead to costly delays, invalid notices, inability to recover possession, and potential financial penalties for non-compliance with statutory obligations.

Legal requirements

• All landlords must correctly identify the type of tenancy agreement in place for their property.
• Landlords of assured tenancies in England must follow specific statutory procedures for possession, including serving prescribed notices.
• Tenancy deposits for assured tenancies in England must be protected in a government-approved scheme within 30 days of receipt.
• Common law tenancies in England are not subject to statutory deposit protection schemes, but the deposit must still be returned fairly.
• Gas safety certificates must be provided annually for all rented properties, regardless of tenancy type.
• Electrical safety checks must be conducted every five years by a qualified person for all tenancies.
• The property must be fit for human habitation, regardless of whether it's an assured or common law tenancy.
• Landlords must adhere to the Tenant Fees Act 2019 for all tenancies, restricting permissible charges to tenants.
• Energy Performance Certificates (EPCs) must be provided to tenants before they move in for all tenancies.
• Landlords must understand and comply with local authority licensing requirements, such as for HMOs, which apply irrespective of tenancy type.

Common mistakes

• Assuming all private residential tenancies are assured tenancies without considering specific conditions.
• Attempting to use statutory possession notices, like those under the Housing Act 1988, for a common law tenancy.
• Failing to protect a deposit for an assured tenancy, leading to penalties and difficulty regaining possession.
• Applying statutory deposit protection rules to a common law tenancy, where they are not legally required.
• Drafting a tenancy agreement using an incorrect template for the actual tenancy type, invalidating clauses.
• Ignoring the implications of a resident landlord arrangement on the tenancy's legal classification.
• Not understanding how corporate lets or high-value rentals fall outside the assured tenancy regime.
• Confusing the rules for England with those for Scotland, Wales, or Northern Ireland, which have distinct frameworks.

Practical guidance

• Before granting a tenancy, thoroughly assess the specific circumstances, including rent level, occupancy, and landlord residency.
• Consult a legal professional to confirm the correct tenancy type if you are unsure.
• Use a tenancy agreement template specifically designed for either an assured tenancy or a common law tenancy, as appropriate.
• For assured tenancies in England, ensure compliance with deposit protection requirements immediately upon receiving funds.
• For common law tenancies, clearly define terms for deposit handling, notice periods, and possession in the tenancy agreement itself.
• Maintain meticulous records of all tenancy documents, communications, and safety certificates.
• Stay updated on legislative changes, particularly those introduced by the Renters' Rights Act 2025 and future amendments.
• Regularly review your tenancy agreements and procedures to ensure ongoing compliance with current housing law.
• When seeking possession, always follow the appropriate legal pathway for the specific tenancy type, whether statutory or contractual.
• Ensure all required safety checks – gas, electrical, and EPC – are conducted and certificates provided to tenants regardless of tenancy type.

Understanding Assured Tenancies in England from 2026

From 2026, with the commencement of the main provisions of the Renters' Rights Act 2025, most new private residential tenancies in England will be assured periodic tenancies. These tenancies provide a high degree of security for tenants and come with specific statutory obligations for landlords. Key features include the requirement for landlords to protect tenancy deposits in an authorised scheme, and strict procedures for seeking possession through the courts using grounds specified in the Housing Act 1988, as amended. The Act abolishes the fixed term assured shorthold tenancy, meaning all tenancies will operate as periodic agreements from the outset or convert to periodic at the end of any initial term. Landlords must ensure their practices align with this new framework, particularly regarding notice periods and possession grounds, which are no longer tied to 'no fault' grounds like Section 21.

What is a Common Law Tenancy and When Does it Apply?

A common law tenancy arises when an agreement for accommodation does not meet the criteria to be an assured tenancy. These tenancies are primarily governed by the terms explicitly agreed upon in the contract between the landlord and tenant, alongside general contract law principles. Several scenarios commonly result in a common law tenancy in England. These include high-rent lettings where the annual rent exceeds a specified statutory threshold, properties where the landlord lives in the same building and it constitutes their principal home (resident landlord arrangements), and certain company lets where the tenant is a corporate body rather than an individual. Other examples include holiday lets and properties where no rent is payable. In these cases, the statutory protections and procedures of assured tenancies do not apply, offering both landlords and tenants different rights and responsibilities.

Possession Procedures and Deposit Protection Differences

The distinction between an assured tenancy and a common law tenancy is perhaps most critical when a landlord needs to regain possession of their property. For assured tenancies in England, landlords must follow specific statutory grounds for possession and serve prescribed notices, ultimately requiring a court order if the tenant does not vacate. There are no longer 'no fault' grounds for possession. In contrast, common law tenancies are not subject to these statutory procedures. Possession typically relies on the terms agreed within the tenancy contract, such as a contractual notice period, followed by court action for breach of contract if necessary. Similarly, for assured tenancies, deposits must be protected in one of the government-approved schemes, a legal requirement that carries significant penalties for non-compliance. Common law tenancies are not subject to statutory deposit protection schemes, although transparent handling and fair return of the deposit remain essential under general contract law.

Regional Variations: Scotland, Wales, and Northern Ireland

The framework for residential tenancies differs significantly across the UK's devolved nations, impacting the concept of 'assured' versus 'common law' tenancies. In Scotland, the Private Residential Tenancy (PRT), introduced by the Private Housing (Tenancies) (Scotland) Act 2016, is the standard for new private lets. It is an open-ended tenancy with specific termination grounds, replacing assured tenancies. For more details, see 'The Private Residential Tenancy: a complete guide for Scottish landlords'. Wales introduced the Renting Homes (Wales) Act 2022, converting most agreements into 'occupation contracts' (standard or supported), fundamentally changing tenancy law there. Find comprehensive guidance in 'The Renting Homes (Wales) Act: a complete guide for landlords'. Northern Ireland continues to use different legislation, with most private tenancies being either 'protected' or 'non-protected' tenancies, or specific arrangements like common law agreements. Landlords in each region must consult their specific national legislation to ensure compliance, as the rules for possession, deposit protection, and tenant rights vary considerably.