Introduction
An Assured Shorthold Tenancy is an agreement between a tenant and a landlord. This agreement has intricate details that may result in a tenant not having a place to stay if they do not understand.
In the same way, landlords cannot take advantage of tenants who sign assured shorthold tenancies. It is extremely important you understand the law to keep tenants safe and stay on the right side of the law.
Read on to find out all about the specifics of an assured tenancy shorthold. From who should sign up for an AST and what kind of rights a tenant has once they sign one. All will be revealed in this article.
What is an AST?
An AST stands for an Assured Shorthold Tenancy. It includes a lot of important information to do with the agreement between a tenant and a landlord such as their right to privacy and their right to a safe home.
The complications of the agreement are quite intricate and it is essential both the tenant and the landlord understand it in detail. How long can an AST last? And who can sign up for an AST? All will be revealed in this in-depth article on the topic.
AST Meaning
The term “AST” stands for an Assured Tenancy Shorthold. The key difference between an AST and an assured tenancy is that the landlord can evict the tenant without a reason given which results in the agreements for ASTs being generally shorter and favouring the needs of a tenant living somewhere in the short term.
There are also multiple other criteria that must be there for the agreement to be classed under this category too. Firstly, the rent payable by the tenant must be below £100,000 per year. If it is over this amount the agreement must be a non-assured tenancy agreement.
Also, the rents must be below £1,000 per month within Greater London or £250 per month outside Greater London in order to be eligible for an AST. Rent paid below these amounts again should be signed within a non-assured shorthold tenancy.
For more on the types of tenancies available to tenants, see the government website here for an overview. The tenancies and their requirements are outlined in detail.
In addition to this, there is also a requirement for the landlord to not live in the property that the tenant is in. So, a landlord cannot live in one room of a house and rent out the others using an AST. Even though it is common to use an assured shorthold tenancy in HMO buildings for example.
Finally, the tenancy must not be a business tenancy with commercial tenants, a property used for leases for people travelling or on holiday and the agreement cannot be used by a public authority like the council for example.
Regarding an assured tenancy shorthold, an agreement can be a fixed term, where a landlord and tenant agree on a tenancy for a few months. A common time period to go by is 6 months.
On the other hand, it can be a periodic or rolling tenancy where there is no agreement on the timespan. A tenant just keeps paying rent every month or week until the landlord or tenant chooses to part ways. This can be done by either party handing in a one-month notice period without the need for eviction.
What happens at the end of an assured shorthold tenancy?
If an AST comes to an end and the tenant wants to move out of the property, there is nothing you can do as a landlord. This would be a fair ending to an Assured Tenancy Shorthold and in fact, Assured Tenancy Shortholds are designed for this very reason. Landlords can evict tenants without any reason and tenants can move out without notice too.
However, if the agreement comes to an end after a fixed term notice, most of the time unless stated otherwise in the agreement, the tenancy will roll over into a periodic tenancy where the tenant now pays rent automatically every month. However, there is also an option for the landlord to evict the tenant with 28 days’ notice if they wish to repossess the property.
In this case, if the tenant wishes to still continue living in the property with added peace of mind, the tenant must sign another fixed-term agreement. In this fixed-term assured shorthold tenancy agreement, the landlord can no longer just evict a tenant without a section 8 or 21 notice.
What happens at the end of a lease option?
Some tenants do not like an AST arrangement and prefer lease options. In a lease option, a tenant can have the option to buy the property at the end of the agreement which is more appealing to those looking for accommodation in the longer term.
Is a 3-month tenancy agreement legal?
Under the housing act of 1996, it is no longer legal to have an assured tenancy shorthold agreement for less than 6 months. This means it is perfectly legal to do a tenancy agreement for three months as long as it is under an AST.
This could entail the tenant signing an agreement for three months or they could be involved in a rolling tenancy where there is no set time period but they end up paying for three months and then ending their agreement.
The key to assured shorthold tenancies is that they are shorthold, meaning they offer the most flexibility in the lease for both landlords and tenants.
What information should a tenancy agreement include?
Every new Assured Shorthold Tenancy should have specific information for both the landlord and the tenant. If these clauses aren’t available then this could result in there being a breach of the rights of the tenant.
Once decided, it is a good idea for both the tenant and the landlord to keep a copy of their assured shorthold tenancy agreement to ensure there are no misunderstandings and disputes.
Especially if a tenant wishes to sign a tenant in fixed term agreement to keep them there for longer, it is important they maintain a good relationship with tenants in the very beginning when they are perhaps signed into a periodic tenancy to gain rapport.
Tenant responsibilities when signing an assured shorthold tenancy
Like most tenancy agreements, there is a need for tenants to abide by basic rules when renting a property such as not damaging the property, not causing anti-social behaviour or nuisances that impact the livelihood of other tenants or neighbours as well as paying their rent on time.
Other than this, the rest of the agreement entails the landlord agreeing with the common causes of the agreement. It is crucial a tenant reads more government advice here on how to rent as it may be the case that an AST isn’t the best fit and using a different type of tenancy agreement is a better way forward.
A physical copy of this guide is required to be given to tenants anyway unless a tenant has notified the landlord they are happy with receiving it by email. Without providing this document, a landlord cannot evict a tenant using section 21 where the landlord has a right of repossession.
For a full guide on what documents are required to rent a flat refer to the type of building you are renting and the type of tenancy agreement, you are signing to find the answer.
Common clauses included in an assured shorthold tenancy
There are common pieces of information that are mandatory and obvious to be included in an assured shorthold tenancy agreement. This includes the date the agreement was signed for both tenant and landlord.
Also, the amount of rent due for every rent payment. Whether this payment is due every month or week. In addition, things like whether there are break clauses in the fixed term agreement of certain ASTs and if the landlord can open the agreement up for a rent review, increasing or decreasing rents.
Without these key pieces of information being relayed to the tenant in writing, the landlord could be liable for persecution and face a fine of up to £2,500 from the local authority. Further rights for tenants included under the landlord and tenant act of 1954 are included in the below subheadings.
Basic right to information
Tenants in an AST agreement or even an agreement that isn’t an assured tenancy shorthold but perhaps a non-assured tenancy agreement for example have the right to know the name and address of the landlord they pay rent to.
After this request, the tenant must receive this information within 21 days or the tenant will be able to take a landlord to court where they could face a fine as seen here.
If the rent is payable to someone who isn’t a landlord like a company or a property manager, for example, the property manager must find out the information of said landlord. If the landlord is a company, a tenant has the right to find the name and address of the group of directors of the company.
Basic right to a safe home
Tenants have the right to live in a home free from serious hazards. These safety measures can be things like having a dry property free from flooding but also include preventative inspections and the passing of safety tests during a PPM inspection.
For example, at any time in the duration of a tenancy, a tenant can ask to see a valid EPC certificate that must be rated at least an E. If a home isn’t deemed safe, landlords can be taken to court under the fitness for human habitation act seen here. As a tenant, there is also protection from eviction if you are anxious your landlord may evict you for reporting them.
If a landlord is found to not be meeting the minimum building safety requirements, they have a maximum of 6 months to make changes to the property during which time they cannot evict you.
However, if a tenant decides to not want to live on the property due to unsafe conditions they may also leave at any time under no obligation if the building is investigated and deemed unsafe.
Basic right to live undisturbed
Tenants have the right that a landlord isn’t allowed to go through their property at will unless there is permission given to do so. This excludes if the tenant is being evicted, there is a clear emergency in the property like a fire or health officials need access to the property for whatever reason.
So landlords cannot breach entry to a property for reasons like property maintenance or even house viewings if they wish to find a new tenant.
Basic right to share your home
Tenants have a right to share their home if it is stated in their agreement that they can take on subletters or renters. However, most of the time a landlord will not allow this and if the tenant breaches these terms they can be evicted.
Basic right to protection from eviction
A tenant should have the right to not be evicted from the house they are renting if they choose. This is with the exception of a tenant signing a periodic AST where a landlord can evict them with 28 days’ notice for no stated reason.
However, this example is different to most other tenancy agreements because they include protections. For example, if a tenant chooses to, they can sign an assured tenancy with no break clauses for two years with the agreement of a landlord.
This means the only reason a landlord can evict a tenant is if they break the terms of the agreement. A tenancy with no break clauses means that section 21 cannot be applied until the tenancy agreement comes to an end and the only reason a landlord can evict a tenant in such a case is through section 8 where a tenant must have breached the terms of the agreement.
These types of long-term tenancies are popular for landlords who own developments like build to rents were finding long-term rental agreements are common and this is the only type of term a landlord is interested in.
How does an assured shorthold tenancy work?
This type of tenancy agreement works by locking the tenant into a contract for either an undisclosed period of time known as a periodic tenancy or a set number of months or years which is known as a fixed tenancy.
Periodic or rolling tenancies can be brought to a close by a landlord or tenant with no reason within 28 days whereas a fixed tenancy can be for any length of time but the landlord will need to evict you using a section 8 or section 21 notice.
This means they’ll need to either wait for the end of the agreement or wait for a break clause. Alternatively, they could also find evidence a tenant has breached the terms of the tenancy agreement.
When would you use an AST?
Because of the flexibility of the agreement, an assured tenancy shorthold would be perfect for someone who needs to live somewhere temporarily or who knows where they’re going to live for a set amount of time and sign for those number of months in a fixed-term deal.
The agreement attracts those looking for temporary accommodation who perhaps live alone or don’t have families, finding it easy to hop around from lease agreement to lease agreement.
Another popular reason for signing an AST as a tenant is if you know you’ll be moving house soon.
For example, if a tenant knows they have 4 months until their mortgage comes into effect and they’re moving out, they can sign a 4 month AST in the meantime. This agreement has the added benefit of rolling over for however long necessary if there are any delays in the process.
What is the difference between a shorthold and an assured tenancy?
A shorthold tenancy can be made for any length of time and the landlord doesn’t need any reason to evict you. In an assured tenancy agreement, the landlord cannot evict you within the terms of your agreement unless you have breached tenancy terms.
However, there are two types of Assured shorthold tenancies. The first one is a rolling tenancy which is where there is no end date to the tenancy and the landlord can evict the tenant or the tenant can leave with just 28 days’ notice.
The second type of AST is a fixed tenancy where a tenant signs for a certain amount of time and is protected by section 21 of the Housing Act 1988. This is similar to other types of tenancies but the difference is an AST doesn’t have a minimum period of time the agreement has to last.
As an example, a tenant can sign an assured shorthold tenancy for just 2 months if they choose to. They can also legally leave the property without a notice period after their agreement is over but if they don’t want to, a landlord is also permitted to allow that tenant to live in the property for at least 6 months before they can repossess the property.
In this example, after two months, the tenancy will change from a fixed assured shorthold tenancy to a statutory periodic assured shorthold tenancy where the tenant just pays monthly rent to stay there.
Do you need a deposit for an AST?
It is not always the case that a landlord requires a deposit for an AST. It is common for landlords to ask for one but for significantly shorter rental periods, many don’t find it worth it to ask for a deposit. Typically, if they do it will be 4-5 weeks’ rent and be kept securely in a tenancy deposit scheme (TDS).
Is an AST a lease?
An AST is an agreement that formalises a lease, bringing the tenant and the landlord legally. This way if there’s any form of disagreement to do with the property, the document can be referred to in order or reach a conclusion.
So yes, an AST is a lease and one of the four types of tenancy agreements available to tenants.
How long can an AST last?
Landlords and tenants often have questions about how long an AST (assured shorthold tenancy) can last. Some clarity on the issue is given below.
How long does an assured tenancy last?
The length of time an AST lasts is up to the tenant. A tenant can choose to start with a fixed tenancy period of a week if they choose to. However, regardless of how short the tenancy is, a landlord cannot evict a tenant before at least 6 months are over. Regardless of how long the initial fixed-term period was.
When comparing this to other tenancies, this is quite short, tenants can commonly be in and out of the property within weeks but most of the time it is within 6 and 12 months.
What is the minimum period for an assured shorthold tenancy?
There is no minimum period for an Assured Shorthold Tenancy. However, if there is a fixed-term AST in place the tenant will have to remain on the property paying rent until it is over unless they want to face eviction for not paying rent.
This is something to be avoided as tenants use their rental history to apply for new tenancies and it is common for landlords to choose tenants based on a history of favourable bank statements.
How can a tenant end an AST?
The process of ending an AST is extremely easy for a tenant, if they are currently in a fixed-term AST, they’ll have to wait for a break clause or the end of their agreement and they can then hand in a notice to quit with a warning of at least four weeks before they stop paying rent.
Sometimes, especially in cases where a tenant is involved in a periodic assured shorthold agreement, they’ll have to give a longer notice period before moving out. This is dependent on the tenancy agreement and it can also change based on the agreement a tenant had at the beginning of their contract when it was a fixed-term agreement.
Can a landlord get out of an assured shorthold tenancy?
If a landlord has signed an agreement with a tenant and they now want to get out of the contract, they may need to wait for a break clause in the agreement or for the tenancy to be over.
However, if a landlord has reasonable grounds to evict a tenant, they can do this under section 8 of the Housing Act 1988. These grounds are a breach of the tenancy agreement such as late rental payments, being a nuisance in the property and causing damage to the premises.
Otherwise, there is no legal ground a landlord has to get out of an AST. Their best bet is to negotiate with the tenant in person and come to an agreement based on the best interest of the person renting the property.
What if you don’t have a written tenancy agreement?
Most of the time a written tenancy agreement with a physical copy given to both the landlord and the tenant is the best-case scenario to prevent legal misunderstanding between both parties. However, this doesn’t always go to plan.
Surprisingly, there is no law that states there has to be a physical copy of the tenancy agreement and a landlord may have to refer to a verbal agreement laid out by the landlord or a less formal agreement sent digitally in text or email.
An easy way to make sure there are physical copies given is to give a tenant a copy of the agreement when you give them a copy of the how to rent guide which is also a requirement under the law. If you’re not sure what this guide is click here.
In Conclusion
So, what is an assured shorthold tenancy? In a nutshell, it’s a type of rental agreement that gives landlords more security and takes it away from tenants. The tenant has to give notice before moving out, and the landlord can evict them if they don’t pay rent or break the terms of the agreement.
If you’re thinking of renting in the UK, it’s important to be aware of your rights and responsibilities under this kind of tenancy agreement. Ultimately, only you can decide whether an assured shorthold tenancy is right for you but now you know what to expect if you sign one.
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