Assured And Shorthold Tenancies
What are Assured and Shorthold Tenancies?
These are the names of the commonest forms of arrangement for the renting of houses and flats by private tenants. In their current form, they were introduced by the Housing Act 1988 but important changes were made by the Housing Act 1996 with effect from 28 February 1997.
An Assured Shorthold Tenancy is one of the most common in the private rented sector. If your tenancy began, or was agreed, on or after 28 February 1997, it is likely to be an Assured Shorthold Tenancy. Tenancies starting, or agreed, before that date but after 15 January 1989, are more likely to be Assured Tenancies.
Assured shorthold tenancies (ASTs)
The most common form of tenancy is an AST agreement. You may have an AST if all of the following apply:
your rented property is private
your tenancy started on or after 15 January 1989
the property is your main accommodation
your landlord doesn't live in the property
All new tenancies are automatically ASTs. You can set up another type of tenancy - called an 'assured tenancy' - but this gives the tenant more rights to stay in the property.
A tenancy cannot be an AST if:
it began - or was agreed - before 15 January 1989
the rent is more than 25,000 a year (100,000 from 1 October 2010) - this is then a bare contractual tenancy
it is rent free
the rent is less than 250 a year - or less than 1,000 in London
it is a business tenancy or tenancy of licensed premises
it is a holiday let
the landlord is a local authority
Assured tenancies
You may have an assured tenancy if the tenancy began before 28 February 1997. This has similar legal rights to an AST, but the tenant can stay in the property for an unspecified period of time. There is no automatic right for the landlord to repossess the property at the end of the tenancy. They must show the court that they have a good reason for wanting possession, using one of the grounds for possession in the legislation.
Do I need a Written Shorhold Tenancy Agreement?
It is not legally required to have a written tenancy agreement in place to start a tenancy. A tenancy agreement can be an oral contract between landlord and tenant. However, written tenancy agreements are highly recommended so important terms and conditions dont get forgotten.
Additionally, if under any unfortunate circumstance, complications between landlord and tenant surfaces which require the aid of the court, the tenancy agreement can prove to be vital.
The Differences between an Assured and a Shorthold Tenancy
In
shorthold tenancy, the landlord can regain possession of the property 6 months after the beginning of the tenancy; provided that he gives tenant 2 months notice requiring possession
In assured tenancy, tenant has the right to remain in the property unless the landlord can prove to the court that he has grounds for possession. The landlord does not have an automatic right to repossess the property when the tenancy comes to an end. The landlord can charge a full market rent for an assured or a
shorthold tenancy.
How do the Procedures for Setting up Assured and Shorthold Tenancies Differ?
An important change was made in the Housing Act 1996. The change means that tenancies starting on or after 28 February 1997 are automatically shorthold tenancies unless special steps are taken to set up an assured tenancy. Tenancies which started or were agreed before 28 February were automatically assured tenancies unless a special procedure was followed to set up a shorthold tenancy.
How do I know if I have an Assured Shorthold Tenancy Agreement?
There are serveral factors which will determine whether or not an Assured Shorthold Tenancy has been agreed. You will have an AST if:
If the tenant pays less than 50k per year in rent
If the tenant moved into the property on or after 28th febuary 1997
If the tenant is renting from a private landlord
If the tenant has rights to have privacy in the property where the landlord cannot enter the property without mutual agreement
How long can the Agreement last for?
An Assured Shorthold Tenancy can now be (after 28th February 1989) for any period of time, it does not have to be short (Prior to 28th February, there was a requirement for a tenancy to be for a minimum of six months, there is no longer this minimum set.)
The landlord and tenant may agree on a fixed term of less than six months. However, the tenant has a right to stay in the property for a minimum period of six months, regardless of what the agreement stipulates.
At the end of the term if the tenancy agreement is not renewed, it then becomes what is known as a Statutory Periodic Assured Shorthold Tenancy Agreement. The terms of the original tenancy agreement still apply, but the tenancy continues on the rent schedule. For example, if rent is paid on a monthly basis, then the contract will become a monthly periodic tenancy.
Theres also what is known as a Contractual Periodic Tenancy; this is when no term for the end of the let is set and the tenancy agreement simply continues until either party decide to bring it to an end.
Regardless of which status your agreement is in (fixed term or statutory), the landlord still has to give two months notice to the tenant and cant obtain possession (before 6 months of the tenancy agreement has elapsed) other than by satisfying certain of the prescribed grounds.
Can the Landlord charge a Deposit?
The landlord can ask tenant to pay a deposit before moving into the property to act as security in case tenant leave the property owing rent or to pay for any damage or unpaid household bills at the end of the tenancy.
Under the Tenancy Deposit Protection legislation introduced by the Housing Act 2004, landlords are required to protect the deposits for all assured shorthold tenancies that have been created since 6 April 2007 in a Government-approved scheme. It is the responsibility of whoever holds the deposit whether it is the landlord or agent to ensure that the money is properly protected in an authorised scheme. For more details: see Tenancy Deposit Protection Scheme
Rights and Obligations under a Shorthold Tenancy Agreement
All types of tenancies include the following rights and obligations.
Rights and obligations as a tenant
Tenants' rights include:
freedom to live in the property undisturbed
the right to live in a property in a good state of repair - your landlord should make repairs and maintain the property
the right to access information about your tenancy at any time
protection from unfair eviction
If you fail to pay rent or breach other terms of your tenancy agreement you can lose your legal rights as a tenant.
Rights and obligations as a landlord
As a landlord, you also have rights. You can:
repossess the property when the tenancy ends
take back the property if it gets damaged
access the property by giving 24 hours' notice
take legal action to evict your tenant in some instances - like non-payment of rent
You may have other rights and responsibilities specifically included in your tenancy agreement.
Should these Responsibilities and Rights be included in the Tenancy Agreement?
Statutory responsibilities and rights will apply to you and the landlord even if they are not included in the tenancy agreement. However, it is useful to include these and other rights you have negotiated in the tenancy agreement to prevent misunderstandings later.
Some of the most common implied terms are:
The landlord must carry out basic repairs
the landlord must keep the installations for the supply of water, gas, electricity, sanitation, space heating and heating water
in good working order
the tenant has the right to live peacefully in the accommodation without nuisance from the landlord
the tenant has an obligation to take proper care of the accommodation.
Ending a Shorthold Tenancy Agreement in the Middle of the Terms
It both parties agree to terminate the agreement, they can legally do so. This is called surrender. There are two ways that surrender of a tenancy can occur: by operation of the law or by a declaration of surrender.
Surrender of operation by law
This is when the tenant gives up their occupation of the property to the landlord and the landlord accepting this. This could involve the tenant handing over the propertys keys to the landlord and the landlord accepting that the agreement is over and that they now have possession.
Declaration of operation by law
This is when the tenant signs a Declaration of Surrender. This written document then acts as proof that the tenant has given up possession of the property to the landlord.
For a surrender to be legal, both parties must agree. Its advised for everything that has been agreed to be writen down so everyone knows where they stand. If a joint tenancy is in place, all the joint tenants and the landlord must agree to the surrender.
When a tenant has legally surrendered the tenancy, then the landlord has the right of possession of the property under Section 5 of the Housing Act 1988. The landlord needs to end the agreement properly, before re-letting the property; otherwise the landlord could be accused of unlawful eviction.
Changing the Shorthold Tenancy Agreement
You may want to change certain terms in the tenancy agreement - for example, allowing your tenant to have pets in the property. As a tenant, you may want to change your tenancy to include another member of the household.
You cannot change the terms of a tenancy agreement unless you both agree to the changes. Whether a landlord or a tenant, you should check that any changes to the terms are written into the tenancy agreement.
Letting out other Rooms in your Rented Property 'Subletting'
As a tenant, in some circumstances, you may be able to let one of the rooms in the property you are renting to somebody else - this is called subletting.
Permission to sublet should be included in the tenancy agreement before you move in. If it isn't, you should get permission from your landlord before anyone else moves in. This should be written into the tenancy agreement, to avoid any disputes later.
What happens when a Tenant dies before their Tenancy ends?
Your tenancy may be passed on to another member of your family if you die, depending on which type of tenancy you have.
If the tenancy is a joint tenancy, the remaining joint tenant or tenants have an automatic right to stay in the property for the rest of the tenancy.
If you are the only tenant, rights to the tenancy depend on which tenancy type you have:
if it is a tenancy for a set period of six months or more (fixed-term) and is still valid, it will be passed on to the person named in your will
if the tenancy is rolling (periodic), it will automatically pass to your husband or wife
If you die while in a rolling tenancy agreement and the people left in the property have no rights to your tenancy, your landlord can recover the house. The landlord must start possession proceedings within a year of your death in order to get the property back.
Your landlord has an automatic right to get the property back if the tenancy is a shorthold tenancy. They can only do this at the end of the tenancy and must give two months' notice that they want the property back.
When an Eviction may be illegal
If your landlord tries to evict you without getting a court order it may be a criminal offence. Your local council should help if you have been illegally evicted or harassed by your landlord. You may also be able to get a court order to force your landlord to allow you back into the property. Get advice if you are in this situation.
Shorthold Tenancy Agreement should not be Unfair
The
shorthold tenancy agreement is a form of consumer contract and as such it must be in plain language which is clear and easy to understand. It must not contain any terms which could be unfair. This means, for example, that the tenancy agreement must not put either tenant or landlord in a disadvantageous position, enable one party to change terms unilaterally without a valid reason. An unfair term is not valid in law and cannot be enforced.
Therefore, it is better to seek an expert advice. Net Lawman templates does not contact any unfair term which may make the agreement invalid and unenforceable..
Discrimination in Tenancy Agreements
Your landlord must not discriminate against you because of your race, sex, disability, sexuality or religion. This means that they are probably breaking the law if they:
rent a property to you on worse terms than other tenants
treat you differently from other tenants in the way you are allowed to use facilities such as a laundry or a garden
evict or harass you because of your race, sex, disability, sexuality or religion
refuse to make reasonable changes to a term in the tenancy agreement which would allow a disabled person to live there.
The rules about discrimination because of sex, disability, sexuality or religion, generally don't apply if your landlord lives in the same property as you. However, your landlord still mustn't discriminate against you because of your race.
Clauses in Our Assured Shorthold Tenancy Agreement
Our Assured Shorthold Tenancy Agreement contains the following clauses. The clauses in our agreement template are:
Parties
Interpretation
Grant of the Tenancy
Rent
Deposit
Tenancy deposit Scheme
Tenant's Obligations
Landlord's Obligations
Utilities and Council Tax
Landlord's Right to Re Enter
Ending the Tenancy
Notices
Law and Jurisdiction
Schedule - Inventory
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