Renting in England and Wales often means entering into an Assured Shorthold Tenancy (AST) which is a common type of tenancy agreement that has protections and outlines the responsibilities for both landlords and tenants. Whether you’re a landlord looking to let your property or a tenant looking to rent, understanding an AST is key to a smooth and legal tenancy.
What is an AST?
An Assured Shorthold Tenancy (AST) is the most widely used type of rental agreement in the private rental market in England and Wales. Introduced by the Housing Act 1988 the AST framework provides a balanced structure that protects the interests of both landlords and tenants. It sets out the terms under which a tenant can occupy a landlord’s property including the length of the tenancy, the rent and the rights and responsibilities of both parties.
An AST is designed to give security to tenants whilst allowing landlords to regain possession of their property under certain circumstances. This type of tenancy is popular because it balances the tenant’s right to live in the property and the landlord’s right to manage their investment. The agreement is legally binding so both parties must adhere to its terms. Recent changes to the Housing Act including the Renter’s Reform Bill are examples of new legislation affecting ASTs.
What’s in an Assured Shorthold Tenancy Agreement
A well drafted AST sets out the main terms of the tenancy and helps avoid disputes by clearly defining the rights and responsibilities of the landlord and tenant. Having a written agreement gives clarity on obligations, protections and specific details such as rent and length of tenancy. Here are the main components of an AST:
Start Date of Tenancy: This states when the tenancy begins which is important for calculating the length of the tenancy and when rent is due.
Rent and Payment Terms: The agreement should state the rent, payment date and payment method. This section may also include details of how rent is to be paid – by direct debit, standing order or another method.
Rent Review Clause: This clause states when and how rent can be increased. It usually states the notice period for a rent increase and the method of calculating the new rent. This gives transparency and ensures both parties are aware of potential changes in rental costs.
Property Maintenance: The AST should state who is responsible for what in the property. While landlords are generally responsible for major repairs, tenants may be expected to do minor maintenance tasks like changing light bulbs or keeping the property clean.
Eviction Clauses: These clauses state the circumstances under which a landlord can seek to evict a tenant, such as non-payment of rent or breach of tenancy terms. Understanding these conditions is key for both parties to avoid disputes.
Property Condition and Inventory: An inventory or schedule of condition is often included which documents the state of the property and its contents at the start of the tenancy. This helps prevent disputes over damage or wear and tear when the tenancy ends.
Managing the Tenancy
Once the tenancy is in place both landlords and tenants have ongoing responsibilities to keep the tenancy running smoothly. Landlords can increase rent for justifiable reasons such as local property price changes or indices like the Retail Price Index.
Landlord’s Responsibilities
As a landlord you have several key duties under an AST:
Notice of Reoccupation: If you want to reoccupy the property you must give the tenant at least 2 months’ notice. This allows the tenant time to find alternative accommodation. Landlords must serve notice to tenants using specific forms and following legal requirements when terminating or varying an AST.
Property Maintenance: Landlords must ensure the property is safe, habitable and complies with health and safety regulations. This includes the structure of the building, gas and electrical systems and major repairs.
Notice for Visits: If you need to visit the property – for example to do inspections or repairs – you must give the tenant 24 hours’ notice unless it’s an emergency.
Tenant’s Responsibilities
Tenants also have responsibilities under an AST:
Following the Agreement: Tenants must follow the terms of the tenancy agreement. This includes paying rent on time, looking after the property and not breaching the terms of the tenancy – for example subletting without permission.
Reporting Issues: If anything breaks or goes wrong with the property tenants must report it to the landlord as soon as possible. Failure to do so could result in further damage and potential liability for the tenant.
Seeking Advice: If tenants are unsure of their responsibilities or facing issues such as eviction they should seek advice. Knowing their rights and obligations will prevent misunderstandings and legal problems.
Ending the Tenancy
Ending an AST requires following the terms of the agreement. Both landlords and tenants must follow specific procedures to end the tenancy legally and fairly.
Landlords must get a court order to evict tenants, especially under section 8 of the eviction process.
Tenant-initiated Termination
Tenants can end the tenancy early in certain circumstances:
Break Clause: If the AST has a break clause tenants can leave the tenancy early without penalty as long as they follow the terms of the clause. This usually means giving notice within a specified time frame.
Notice Period: The AST will state the notice period to end the tenancy. Tenants must give this notice in writing and are usually responsible for rent and property upkeep until the end of the notice period.
Negotiating Early Termination: In some cases tenants can negotiate with the landlord to end a fixed term tenancy early. This might be finding a new tenant or paying rent until the property is re-let.
Rent and Deposits
Rent and deposits are key to any tenancy agreement and both landlords and tenants need to understand the rules around them.
Rent Increases: During a fixed term landlords can’t increase the rent unless the AST has a rent review clause or the tenant agrees to the increase. The rent review clause will state when an increase can happen, how much notice must be given and how the new rent will be calculated.
Deposit Protection: Landlords must by law protect the tenant’s deposit in a government approved tenancy deposit scheme. If the deposit is not protected or protected late the landlord may lose the right to serve a Section 21 notice to evict the tenant.
Dispute Resolution
Despite everyone’s best efforts disputes can arise during a tenancy. It’s good to know the options for resolving them.
Requests to Landlord: Tenants can make formal requests to the landlord for things like repairs or improvements. The landlord must respond reasonably and can’t withhold consent without good reason.
Rent Assessment Committee: If a tenant thinks their rent is too high they can apply to the local rent assessment committee to have it reduced. This is especially relevant if there has been a big rent increase that the tenant feels is unfair.
Seeking Advice: Both landlords and tenants can seek advice if a dispute arises. This will help clarify the situation and provide a way forward that is in line with the law.
Assured Shorthold Tenancy Reform
The Assured Shorthold Tenancy landscape is set to change with proposed reforms from the UK government which will affect both landlords and tenants.
Abolition of Section 21 Notices: One of the biggest changes is the abolition of Section 21 notices which currently allow landlords to evict tenants without reason as long as they give two months’ notice. The Renter’s Reform Bill aims to remove this ability so landlords can’t evict tenants without cause.
Transition to Periodic Tenancies: The government will also transition ASTs to periodic tenancies which don’t have a fixed term. Under these changes tenants will only need to give two months’ notice to end the tenancy, giving more flexibility and security.
These changes will create a fairer rental market where tenants have more security and landlords are incentivised to behave well. But they will require landlords to get used to new rules and may change how tenancies are managed going forward.
Summary
Assured Shorthold Tenancies are the foundation of the private rental sector in England and Wales, it’s a clear framework for both landlords and tenants. By knowing the basics of an AST, managing the tenancy well and staying informed of the changes both parties can have a good rental experience.
For landlords a well drafted AST and compliance with the law will protect your property and your relationship with your tenants. For tenants knowing your rights and responsibilities under an AST will help you avoid disputes and have a smooth and trouble free tenancy.
As the rental market changes staying informed is more important than ever. Whether you’re a landlord or a tenant understanding Assured Shorthold Tenancies is key to navigating the world of renting and letting.