INTRODUCTION TO ASSURED SHORTHOLD TENANCY AGREEMENTS
Ellie Dalglish-Hawkins
November 20th, 2020
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An Assured Shorthold Tenancy Agreement if you’re looking at getting into the world of residential letting it might be a term you’ve come across as it’s one of the most used types of tenancy agreements in the UK.
What exactly is it though? In this post we dive into the in’s and out’s of Assured Shorthold Tenancy agreements, or AST for short, and tell you everything you need to know.
Let’s start with the basics, what exactly is an AST agreement? As we eluded too, it’s the most common type of tenancy in the UK when you are renting from a letting agent or private landlord. These agreements are typically given for a 6-month period, but it can be longer, during that period it protects the tenant from being evicted without any legal reason, however after that period the landlord is able to evict the tenant without giving a reason.
The only way that a landlord can evict a tenant when an assured shorthold tenancy agreement is in place is by gaining possession on the ground of the Housing Act 1988. This provides security to the tenant as it means that when this agreement is active, the tenant generally needs to have infringed on a particular condition for the landlord to evict, for example, going into arrears.
An assured shorthold tenancy is used in pretty much all residential letting situations which started after the 28th February 1997. There are a few other reasons that you may not have an AST in place, including if you live with your landlord or your rent is over £100,000 a year, or under £1,000 a year in London or £250 elsewhere in the UK.
WHAT IS THE MINIMUM TERM FOR AN ASSURED SHORTHOLD TENANCY?
The current minimum length of an AST is six months, and most landlords do opt for this option initially as it gives them the flexibility to remove a tenant easily at the end of a term, as with new tenants this is the time your most at risk of having missed payments, if the tenancy is going well the landlord can always extend the term.
Setting up an AST is fairly easy, you’ll need to create a document that has sound legal footing and is up to date, which all parties should sign. There are several online templates that you can download that will provide you with a document which you can tweak and use as your AST. Here’s an example to a sample AST from Open Rent.
When the agreement of the shorthold tenancy comes to an end as dictated by the contract, the tenancy will still continue, which is due to the statue.
The reason that the tenancy continues is due to section 5 which is part of the Housing Act 1988, which say that the tenant can remain in the occupation at the end of the fixed term, and a new periodic tenancy is created automatically. The new period tenancy starts immediately after the term ends, is deemed to be between the same parties, and will run normally on a monthly or weekly basis.
If you are during the agreed fixed tenancy term there can still be rare occasions where either the landlord or tenant would want to end it early. You can do this but it can only be achieved by negotiation and agreement by both parties which may be subject to a cash settlement.
As a landlord if you want to evict a tenant during a fixed term you must have grounds to do so, and serve a notice seeking possession, typically served for rental arrears.
After the fixed tenancy ends the tenant will go to a periodic tenancy, which is typically month by month, and a tenant can give notice which is typically a month, but in practice due to when rental payments fall, this often means the tenants are obliged to give landlords two months’ notice. If the landlord wants to give notice, it’s a little trickier, and there are generally three stages involved:
- Serving a section 21 or section 8 notice
- Applying to the county court for a possession order
- Applying to the court to evict the tenant
Tenants however often leave of their own accord often within the expiry date of the two months’ notice given within the section 21 notice.
Sometimes within the AST there can be a break clause put in place, which is a term that allows a tenant or landlord to end the fixed term tenancy before the expiry of the fixed term period. If you intend on using this, you will have to refer to the notice and requirements dictated in the AST document that all parties have signed.
As we’ve discussed in this article, the most common type of tenancy is an Assured Shorthold Tenancy (AST) – but there are other types of tenancies.
- Secure Tenancy
Replaced by the AST, it’s a lifetime tenancy mostly for council tenants. These types of agreements give the tenant stronger rights and can only be evicted under very specific circumstances such as not paying rent, causing a nuisance to neighbours, using the property for any illegal activity.
- Non-assured Shorthold Tenancy
This is used in specific circumstances in which the AST can’t be, so as we mentioned, an AST can’t be used if the rent is less than £250 a year, or £1,000 in London or over £100,000 a year or if the landlord is living in the same property as the tenant but doesn’t share the use of any facilities.
The difference from this to an AST is that the landlord isn’t obliged to hold the deposit in a government-backed scheme, and they don’t have to give a section 21 to end the tenancy, but the tenant does have the right to stay in the property until the end of the fixed term.
- Statutory / Rolling
When a fixed-term tenancy expires, it doesn’t automatically terminate, instead, it rolls to a periodic tenancy. Essentially the original terms and conditions of the agreement are still in play, the tenancy just runs on a rolling monthly basis.
Start your property portfolio today!
An Assured Shorthold Tenancy Agreement if you’re looking at getting into the world of residential letting it might be a term you’ve come across as it’s one of the most used types of tenancy agreements in the UK.
What exactly is it though? In this post we dive into the in’s and out’s of Assured Shorthold Tenancy agreements, or AST for short, and tell you everything you need to know.
Let’s start with the basics, what exactly is an AST agreement? As we eluded too, it’s the most common type of tenancy in the UK when you are renting from a letting agent or private landlord. These agreements are typically given for a 6-month period, but it can be longer, during that period it protects the tenant from being evicted without any legal reason, however after that period the landlord is able to evict the tenant without giving a reason.
The only way that a landlord can evict a tenant when an assured shorthold tenancy agreement is in place is by gaining possession on the ground of the Housing Act 1988. This provides security to the tenant as it means that when this agreement is active, the tenant generally needs to have infringed on a particular condition for the landlord to evict, for example, going into arrears.
An assured shorthold tenancy is used in pretty much all residential letting situations which started after the 28th February 1997. There are a few other reasons that you may not have an AST in place, including if you live with your landlord or your rent is over £100,000 a year, or under £1,000 a year in London or £250 elsewhere in the UK.
WHAT IS THE MINIMUM TERM FOR AN ASSURED SHORTHOLD TENANCY?
The current minimum length of an AST is six months, and most landlords do opt for this option initially as it gives them the flexibility to remove a tenant easily at the end of a term, as with new tenants this is the time your most at risk of having missed payments, if the tenancy is going well the landlord can always extend the term.
Setting up an AST is fairly easy, you’ll need to create a document that has sound legal footing and is up to date, which all parties should sign. There are several online templates that you can download that will provide you with a document which you can tweak and use as your AST. Here’s an example to a sample AST from Open Rent.
When the agreement of the shorthold tenancy comes to an end as dictated by the contract, the tenancy will still continue, which is due to the statue.
The reason that the tenancy continues is due to section 5 which is part of the Housing Act 1988, which say that the tenant can remain in the occupation at the end of the fixed term, and a new periodic tenancy is created automatically. The new period tenancy starts immediately after the term ends, is deemed to be between the same parties, and will run normally on a monthly or weekly basis.
If you are during the agreed fixed tenancy term there can still be rare occasions where either the landlord or tenant would want to end it early. You can do this but it can only be achieved by negotiation and agreement by both parties which may be subject to a cash settlement.
As a landlord if you want to evict a tenant during a fixed term you must have grounds to do so, and serve a notice seeking possession, typically served for rental arrears.
After the fixed tenancy ends the tenant will go to a periodic tenancy, which is typically month by month, and a tenant can give notice which is typically a month, but in practice due to when rental payments fall, this often means the tenants are obliged to give landlords two months’ notice. If the landlord wants to give notice, it’s a little trickier, and there are generally three stages involved:
- Serving a section 21 or section 8 notice
- Applying to the county court for a possession order
- Applying to the court to evict the tenant
Tenants however often leave of their own accord often within the expiry date of the two months’ notice given within the section 21 notice.
Sometimes within the AST there can be a break clause put in place, which is a term that allows a tenant or landlord to end the fixed term tenancy before the expiry of the fixed term period. If you intend on using this, you will have to refer to the notice and requirements dictated in the AST document that all parties have signed.
As we’ve discussed in this article, the most common type of tenancy is an Assured Shorthold Tenancy (AST) – but there are other types of tenancies.
- Secure Tenancy
Replaced by the AST, it’s a lifetime tenancy mostly for council tenants. These types of agreements give the tenant stronger rights and can only be evicted under very specific circumstances such as not paying rent, causing a nuisance to neighbours, using the property for any illegal activity.
- Non-assured Shorthold Tenancy
This is used in specific circumstances in which the AST can’t be, so as we mentioned, an AST can’t be used if the rent is less than £250 a year, or £1,000 in London or over £100,000 a year or if the landlord is living in the same property as the tenant but doesn’t share the use of any facilities.
The difference from this to an AST is that the landlord isn’t obliged to hold the deposit in a government-backed scheme, and they don’t have to give a section 21 to end the tenancy, but the tenant does have the right to stay in the property until the end of the fixed term.
- Statutory / Rolling
When a fixed-term tenancy expires, it doesn’t automatically terminate, instead, it rolls to a periodic tenancy. Essentially the original terms and conditions of the agreement are still in play, the tenancy just runs on a rolling monthly basis.
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