One of the most common forms of tenancy agreement is the assured shorthold tenancy (AST) agreement. In order to qualify as an AST, there are a number of statutory requirements to be met.
An AST provides certainty in rent and possession for tenants, but also provides landlords a right to repossess the premises without cause after an initial six-month period. Tenants are entitled to enforce rights against disturbance of possession and for repair of the premises against the landlord.
The agreement can be for any fixed duration. An AST will offer protection from eviction for the first six months following commencement of the agreement, even if the agreed term is less than six months. Typically, ASTs are provided for a six-month to a one-year period. However, if the tenant breaches any terms of the agreement, the landlord may seek eviction at any point.
Requirements for an assured shorthold tenancy
As well as being for a fixed period of time, the tenant and landlord will agree on a fixed amount of rent payable. Under the Housing Act 1988, to qualify as an AST, the premises must:
- be let out as separate accommodation i.e. the landlord cannot reside in the same premises;
- serve as the tenant’s principal residence;
- be let out for less than £100,000 in rent per annum or equivalent pro rata; and
- incorporate more than two acres of agricultural land.
Further the tenant in an AST must be a natural person, and cannot be a legal entity such as an LLP.
If agreed before 28 February 1997, the tenant must have been provided notice that they are signing an AST.
Typically, conditions that are added to ASTs relate to leaving the premises unattended, paying local council taxes and keeping of pets.
In terms of fixed rent, the landlord is usually required to ask the tenant to pay full market rent, which is measured relative to other similar properties in the same geographic area. A fixed rate can only be amended in the course of the tenancy with the agreement of both parties.
If a tenant considers their rent to be excessive, they can refer the landlord to the Rent Assessment Committee within the first six months of their tenancy. The Committee is independent from local authorities and has a statutorily prescribed membership of a lawyer, property expert and a lay member. The Committee will determine what constitutes reasonable market rent for the premises, and will usually look to other ASTs in that area. Application to the Committee is free for tenants.
At the outset of the tenancy, the landlord is obliged to place any deposit received into a government approved scheme. Failure to do so may result in the landlord being unable to enforce their rights, including the right to repossession after six months.
Rights of the tenant
A tenant who has agreed an AST enjoys a range of rights, including:
- The right to live in the premises undisturbed, which includes sole control and use of the premises and free access. A landlord who interferes with this right can leave himself or herself open to a harassment claim.
- The right to have the premises maintained in good repair, which requires the landlord to keep the exterior of the premises in working condition. It also requires that they maintain utilities, including gas, electricity, water, sanitation and heating, and for such utilities to comply with official certification.
- The right to information regarding the tenancy, which obliges landlords to provide a statement detailing the agreed start and end date, and the amount of rent and when it should be paid.
Accelerated Possession Proceedings
Under the Housing Act 1988, a landlord has a right to repossession of the premises after expiry of the initial six-month period, even if an actual fixed term has no yet expired. No reason is required for the landlord to exercise their right to repossess.
This right is evoked through use of Accelerated Possession Proceedings, which enable a landlord to bypass the need for a court hearing and instead apply to the court for an order for possession. At least two months’ notice must be provided to the tenant before the actual date of possession.
If the AST expires and no new fixed term is agreed, the tenancy will become a periodic tenancy. This will typically arise if the tenant simply pays month-to-month on a set date. If the landlord wished to initiate Accelerated Possession Proceedings, they must still provide two months’ notice through service of a Section 21 Notice, running from the date rent is routinely paid.
Eviction for valid reason
A landlord can bring an AST to an end prior to expiry of its term if a valid reason exists. This will enable a landlord to bypass the six-month protective period where Accelerated Possession Proceedings are concerned. Reasons can include non-payment of rent, late payment of rent, violation of the terms of the tenancy and nuisance or annoyance caused by the tenant. In order to initiate eviction proceedings against a tenant, the landlord will have to serve a Section 8 Notice, notifying the tenant of the grounds for seeking repossession.
The tenant can challenge the repossession in court on the basis that the grounds the landlord has relied on are unreasonable.
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It is important a landlord and new tenant are fully aware of the agreement they are entering into form the outset, as well as the rights and obligations they owe to one another. This can avoid costly and time-consuming court proceedings at a later date.
The Property Lawyers at Lewis Nedas Law have specialist knowledge in both commercial and residential property disputes. With offices in Camden and Mayfair, we provide advice to clients across Central, West and North London, as well as the wider UK.