This article is designed to give tenants looking to rent a property, information on the most important documents issued and signed by both tenant and landlord – the Assured Shorthold Tenancy (AST). Many tenants sign an AST without understanding what the document contains and what conditions they will be required to fulfil as a result. This guide although not exhaustive due to the marked differences between ASTs, aims to provide sufficient guidance to ensure the tenant understands the types of conditions that are contained within a typical AST.
What is an Assured Shorthold Tenancy?
An Assured Shorthold Tenancy (AST) is a legal document that gives the person(s) named on the tenancy (tenant) the exclusive right to live in the accommodation for a fixed or defined period of time. An AST outlines both the rights of the tenant and the landlord, and can be granted verbally or in writing.
An Assured Shorthold Tenancy generally starts as a fixed term tenancy which, commonly lasts for 6 to 12 months, but can be longer. Once this fixed period has ended an AST usually moves into the periodic, phase which means it moves onto a rolling week-by-week or month-by-month basis. However, this is not always the case.
The rights of the tenant and the landlord are protected by law, on the condition the landlord and tenant meet the conditions outlined in the AST. Tenants are protected by a set of statutory rights. Statutory rights are the rights of individuals as outlined by law and provide a minimum level of protection to the individual. A tenancy agreement can give the tenant and the landlord more than their statutory rights, but not less than their statutory rights. A term in a tenancy agreement cannot provide less than the tenant’s statutory rights, if it does, the term cannot be enforced.
Why do landlords use an AST?
The majority of tenancies granted by landlords, with the exception of social housing are Assured Shorthold Tenancys (ASTs). ASTs have become popular with landlords as they give the landlord the right to regain the property if the tenant breaks a term of the AST agreement, such as not paying the rent. Other forms of tenancy do not allow the use of these conditions.
Are all tenancies Assured Shorthold Tenancies?
No, an Assured Shorthold Tenancy can only be used:
- If created after the 28th of February 1997.
- The annual rent is less than £25,000.
- If the tenant is granted and exclusive right to the property, or a specific part of the property. This means someone sharing a property with the owner is granted a licence, not a tenancy.
- If letting to a private individual, not a business.
Other types of tenancy include:
- Assured Tenancies.
- Housing Association Tenancies.
Other types of tenancy offer the tenant a greater security of tenure. This means at the end of the tenancy the tenant does not have to move out of the property; the tenant has an enforceable right to remain in possession of the property. As this article is focused on ASTs, alternate tenancies will not be discussed further.
Terms of an Assured Shorthold Tenancy: Express and implied terms
Implied terms are obligations which a tenant and landlord have, which are not set down in the agreement but are enforced by law (statutory rights).
Implied terms include:
- The landlord must carry out basic repairs.
- The landlord must maintain, in good working order, the installations for the supply of gas, water, electricity, heating and hot water.
- The tenant has an obligation to take proper care of the property.
- The tenant has the right to live peacefully in the property, without nuisance from the landlord.
Express terms are those detailed in a tenancy agreement, whether a written or verbal tenancy. Examples of express terms include:
- Rent: How much, when and how it should be paid. What conditions are in place for increasing the rent and the amount and frequency of increases allowed.
- Deposit: The amount and which deposit scheme it will be held within. What deductions can be made from the deposit and under what circumstances these deductions can be made.
- Repairs & Damage: Who is responsible for what areas of the property (see the tenants responsibility article). The list above is not exhaustive and each tenant should ensure they read, and understand, the tenancy agreement they are required by law to meet.
An AST affords the tenant piece of mind that their occupation of the premises will be peaceful and without interruption if they meet the terms of the AST. An AST allows both the tenant and the landlord a way of addressing and ensuring any breaches of the tenancy are remedied, usually by taking legal action.
What should a tenant be aware of in an Assured Shorthold Tenancy?
This section outlines the basic information a tenant should be aware of before signing an Assured Shorthold Tenancy (AST) agreement:
- The type of tenancy: Whether an assured tenancy or an AST.
- What is included: the property (address) or parts of the property included in the tenancy.
The name and address of the landlord or letting agent: this allows the tenant to contact the letting agent or landlord. - Rent: How much, when and how it should be paid. What conditions are in place for increasing the rent and the amount and frequency of increases allowed.
- End date: When the tenancy ends and what happens when it has ended, i.e. does it become a periodic tenancy?
- Deposit: The amount of deposit and what scheme the tenancy deposit will be held in.
- Notice: The amount of notice required to end the tenancy. When and how this notice must be provided to the landlord.
- Repairs: Who is responsible for what repairs and how and when these will be made.
- Access arrangements: How much notice the landlord must give to access the property to undertake inspections and repairs.
- What happens if the tenant leaves belongings when they move out: Who is responsible for belongings that are left in a rental property after a tenancy ends and if/when a landlord can dispose of these belongings. For more information on the Landlords perspective on the subject of tenants leaving belongings read the ‘Absconding Tenants article’.
What happens at the end of an Assured Shorthold Tenancy?
The tenancy agreement should outline whether the tenancy can move from a fixed term to a periodic term tenancy. If the tenancy has a clause which allows it to move onto a periodic tenancy, the terms and conditions of the tenancy remain the same. However, there is an exception; the notice period that the landlord is required to give for the tenant to leave the property is reduced. The landlord is now able to end the AST without a court order by issuing a Section 21 notice, asking the tenant to leave within a set period of time. This time period is traditionally 2 months (if paying rent monthly) from the next rent payment date, after the Section 21 notice was served.
What is the difference between a periodic and a fixed term Assured Shorthold Tenancy?
The difference between a periodic and a fixed term AST is the security of tenure given. In a fixed term tenancy a tenant has security of tenure till the expiry of the fixed term (assuming tenancy clauses are met), whereas a periodic tenancy has security of tenure for approximately two months – if paying rent monthly.
If the tenancy has reverted from a fixed term tenancy to a periodic tenancy, the same conditions and obligations apply for both the tenant and the landlord in terms of repairs, rent payment etc.
Can a landlord evict a tenant within an Assured Shorthold Tenancy?
A landlord can only evict a tenant in the fixed term if the tenant has breached one of the conditions of the tenancy agreement. If a tenant is in the fixed term of their AST a landlord can only evict a tenant using a court order. If the fixed term has ended and the tenant is in the periodic term of the tenancy, the landlord can evict the tenant with, or without, a court judgement.
In a periodic tenancy, the landlord can issue a Section 21 notice, which legally ends the tenancy within a specified period, usually 2 months (if paying monthly) from the next rent payment date, after the notice was issued.
How can a tenant end an Assured Shorthold Tenancy?
The method of ending an AST is dependent on whether the tenancy is a fixed or periodic tenancy. An AST is a legal document and must be ended in a prescribed way.
If the tenancy is in its fixed term, the tenant can not end the tenancy before the end of the fixed term, without:
- Paying the rent for the remainder of the fixed term.
- Finding a replacement tenant at their cost.
If the tenant leaves the property without making provision for a replacement tenant, they will be liable for the outstanding rent and can be pursued through the courts for the outstanding monies.
In a periodic tenancy, the arrangements are different for ending a tenancy, these are:
- Give notice on the specified date, in the specified way – usually in writing – on a rent payment date, one month (in the case of a monthly tenancy) before the date the tenant wants to leave.
The tenant will be free to leave on this date without any further penalties, assuming they are up-to-date with the rent and have not damaged the property.
Can my rent be increased if I am in an Assured Shorthold Tenancy?
Yes, rent can be increased during an AST, without the need for a new tenancy. A rent increase can take place in the fixed term of an AST if there is provision in the tenancy. If there is a provision in the tenancy agreement on rental increases, the landlord must adhere to these terms. If a provision is not present, rent can not be increased during the fixed term.
In a periodic tenancy, the rent can be increased even if there is no provision in the AST for a rent increase. If there is provision in the AST, the landlord must adhere to these terms when increasing the rent. Any increase in rent when there is no provision in the AST must be done following the procedure, described in the Housing Act 1996.
If there is no provision in the AST for a rental increase, the landlord must serve a notice in a prescribed format to the tenant, suggesting the amount of the new rent. If the tenant disagrees with the rent, they can refer the notice to the Rent Assessment Committee.
The Rent Assessment Committee is an independent public body which operates on a regional basis who determine the rent at which the property could be reasonably let in the open market. The decision of the Rent Assessment Committee will be final once they have been involved in the rent setting. This article will not discuss Rent Assessment Committees and we recommend anyone looking to use the Rent Assessment Committees visit their website.
Summary
Assured Shorthold Tenancys (ASTs) are legal contracts that can be enforced by law. A tenant must understand the conditions they must fulfil when signing an AST, as it offers the landlord and the tenant protection, and an avenue through the courts to ensure any breaches of the contract are remedied.
