What are assured shorthold tenancies?
If you're a private landlord it's highly likely you're letting your property on an assured shorthold tenancy. If you're a new landlord this will almost certainly be the case. Assured shorthold tenancies (ASTs) are the most common form of tenancy in the UK.
What is an assured shorthold tenancy?
In the UK most new tenancies are ASTs. They have been since the revision of The Housing Act 1996.
There are several conditions to ASTs:
- A private landlord must let the property.
- The tenancy began after 15 January, 1989.
- The property is the tenant's main residence.
- The rent must be less than £100,000 per year.
- The rent must not be less than £1,000 per year in London or £250 outside of the capital.
Holiday lets and social housing are not ASTs.
What are the other types of tenancies?
Although most tenancies in England and Wales are ASTs it's possible to find other types. These are:
- Assured tenancies. This gives the tenant more security. The tenant can remain in the property after the tenancy has ended. To remove the tenant the landlord must obtain an order of possession.
- Excluded tenancies. Mainly applies to lodgers who share facilities with their landlord.
- Regulated tenancies. Prior to 1989 regulated tenancies provided the tenant with the right to apply for 'fair rent'.
How do ASTs work?
As a private landlord you are entitled to a possession order after the initial fixed term of the tenancy. This is usually six or twelve months. After the initial period you may evict your tenant legally without needing to prove they have breached their tenancy agreement. But if you aren't going to renew the tenancy you must give two months notice.
After the fixed term ends you can also choose to raise the rent. However, the tenancy agreement must include guidelines on this. You must also give the tenant written notice. This should be equal to one rent period. If the tenant believes the rent is unfair, in other words too high, they can appeal to the Rent Assessment Committee.
At the start of the tenancy you can (and should) take a tenancy deposit from your tenant. You must protect this deposit in a government approved scheme.
As we've already discussed you can raise the rent at the end of the fixed term. You can't increase it during the tenancy unless:
- The tenant agrees.
- There's a rent review clause in the tenancy agreement.
Repairs and maintenance
As a private landlord you have responsibility for the safety of your tenant. This includes maintaining the property along with its services and appliances. Electrical and gas safety are especially important but, depending on your tenancy agreement, you may also be responsible for everyday repairs and maintenance.
Paperwork and regulations
You must carry out certain tasks and provide your tenant with documentation to ensure your AST is valid. You must:
- Carry out a right to rent check on your tenant.
- Provide your tenant with a tenancy agreement.
- Give your tenant a copy of the property's energy performance certificate.
- Provide the tenant with a copy of the gas safety certificate (if applicable).
- Give the tenant the details of the deposit protection scheme you are using.
- Present your tenant with a copy of the 'How to Rent' booklet.
At the end of the fixed term
You have several options here. You can:
- Ask the tenant to leave ensuring you give appropriate notice.
- Draw up another fixed term tenancy agreement for the tenant.
- Allow the tenancy to roll over into a periodic tenancy.
Returning the deposit
At the end of an assured shorthold tenancy you must return the tenant's deposit to them in full. However. If you feel you have the right to make deductions from the deposit for damage or rent arrears you must inform the tenant. If they agree to the deductions you pay them the balance of the deposit after your costs.
If they don't agree to the deductions you can either use alternative dispute resolution or take legal action.
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