An Assured Shorthold Tenancy agreement establishes the terms of a letting between a landlord and a tenant for a specified term at an agreed rate. Both parties undertake certain duties in regard to the property, rent, deposit, and repair. Depending on the term of the tenancy, there are various rules about termination. Both the landlord and tenant undertake certain duties under an assured shorthold tenancy agreement.
Key features of an Assured Shorthold Tenancy Agreement:
Under an Assured Shorthold Tenancy agreement a tenant contracts to place themselves under certain obligations in relation to the property. A tenant's obligations are often to:
Under an AST, a tenant is often liable to pay rent (and other charges, such as bills) by an agreed date. If they fail to do so, they are liable to pay interest (capped at 3% of the Bank of England's rate) on rent arrears. It is also standard for a tenant to be liable to pay a deposit (capped at 5 weeks’ worth of rent in most circumstances).
A tenant is not a lodger. A lodger has less rights than a tenant as they do not have exclusive possession of the room they are licensing. This means that because they are staying in the landlord's main home they can be evicted without a court order if they breach the terms of their lodger licence agreement. A tenancy agreement is not appropriate for a holiday let as the rented property will not be the occupier's main home.
It is also common for tenants to have to ask the landlord’s consent for certain activities. These may include:
Upon the expiry of the AST, the tenant will be obliged under the contract to return the property in the same condition as when it was let (excluding wear and tear). They must also return keys, remove all of their possessions from the property and provide forwarding addresses.
A landlord will also be under obligations in relation to the property under an AST. These obligations typically include:
Where a tenant asks for the landlord’s consent for one of the above mentioned activities, such as having an adult to stay, the landlord cannot unreasonably withhold consents.
Under an AST, a private landlord is entitled to increase rent where it is an option by serving a detailed notice. They are also entitled to receive a deposit from the tenant, provided that it is placed in a tenancy deposit scheme, and make deductions from the deposit for certain purposes, included repairs required due to the tenant’s fault.
A landlord has the right to terminate a tenant and following the Housing Act 1988 they must follow certain procedures for giving notice. The current Coronavirus Regulations have temporarily amended these notice periods. Landlords are also entitled to include and exercise break clauses in ASTs.
Before renting, a landlord must also obtain consents. These include, where relevant, consents from any:
If a landlord is entering into an AST with the intention of renting a House in Multiple Occupation (HMO), a landlord will also need to ensure they obtain a HMO licence. The HMO licence requirements will vary between local authorities and landlords will need to apply to their local councils for a licence.
An AST is not suitable for landlords who wish to rent out a room in their main home to a lodger. When this is the case, the live-in landlord will need to enter into a lodger licence agreement.
There is no minimum period for an assured shorthold tenancy agreement but the minimum term is usually 6 or 12 months. At the end of the fixed term, an assured shorthold tenancy can have the option to convert into a rolling statutory periodic tenancy. Legislate's assured shorthold tenancy agreement can be configured to convert into a rolling periodic at the end of the initial fixed term. Alternatively a fixed term tenancy can be created without the option to convert into a periodic tenancy. A break clause can also be inserted if required.
A landlord and letting agent will usually reserve a property once the holding deposit has been paid and circulate a tenancy agreement shortly afterwards. This means that you will need to sign the residential tenancy agreement before your prospective move-in date which can be as far as 1 year away or as soon as the next day. If you change your mind about signing the tenancy agreement, the landlord will be entitled to keeping the holding deposit which is capped to 1 week's rent.
An assured tenancy is often used by councils and Housing associations and gives tenants long-term tenancy rights. Assured tenancies have security of tenure which means they do not have an expiry date. Assured shorthold tenancies do not have security of tenure.
Below are some examples of assured shorthold tenancies which can be created easily with Legislate:
Below are some examples of bedsit tenancies which can be created easily with Legislate:
Below are some examples of HMO tenancies which can be created easily with Legislate:
Finally you can create rolling tenancies with Legislate which can kick in automatically after 6 or 12 months and support break clauses, shared facilities, letting agents, superior landlords and insured risks as well.
Legislate’s patented knowledge graph approach (United States patent 11,087,219) understands and reads your contracts in a new and novel way. It allows obligations and restrictions under a contract to be automatically retrieved and visible to ensure that both parties know exactly what their contracts mean. Furthermore, our approach makes managing your properties a seamless process with our reminders on contract anniversaries and updates on the progress of your contracts.
Far aside from providing invaluable insights into your contacts, saving you time and cost, Legislate’s ASTs:
Once you have generated one AST on Legislate, your terms and contacts will be remembered meaning that serving a how to rentletter, rent increase letter, tenancy amendment letter, section 8and 21 eviction notices to your tenants is a quick, seamless and easy process.
Creating an Assured shorthold tenancy agreement with Legislate is effortless. Specify the type of tenancy (HMO, bedsit or sole occupancy) and provide the terms of the agreement by answering simple questions. Invite the tenant when you are happy with the terms.
Once the tenant has reviewed the contract and accepted the terms they can sign. Legislate also supports witnessing should you require this.
For more information on how to create your agreements with Legislate, sign up, read our assured shorthold tenancy contract tutorial or book an introductory call with one of our team members.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.