What is an Assured Shorthold Tenancy?
An Assured Shorthold Tenancy has a minimum length of six months where the tenant cannot be evicted unless they seriously breach the terms of the tenancy agreement. Assured Shorthold Tenancies can either be fixed term contracts, such as 6/12/18 months, or periodic from the start, such as weekly/monthly/quarterly. The Assured Shorthold Tenancy will then run indefinitely after the fixed term, if the tenant wishes to continue renting the property, lapsing into a statutory periodic Assured Shorthold Tenancy automatically if both parties do nothing. An alternative to this is to renew the tenancy for a new term if both parties sign a new agreement on the same terms or revised ones. Though this is less common and landlords usually opt for the lapsing into the periodic tenancy rolling contract as it encourages tenants to continue the Assured Shorthold Tenancy for as long as possible, without inconveniencing either party by having to recurrently sign a tenancy agreement renewal.
According to gov.uk, a tenancy can be an Assured Shorthold Tenancy if all of the following conditions apply:
- you’re a private landlord or housing association
- the tenancy started on or after 15th January 1989
- the property is your tenants’ main accommodation
- you don’t live in the property
However, a tenancy cannot be an Assured Shorthold Tenancy if the rent is more than £100,000 a year or less than £250 a year (less than £1000 in London). Or if the tenancy began or was agreed before 15th January 1989, it’s a holiday let, business tenancy or tenancy of licensed premises or if the landlord is a local council.
What is the Difference Between Assured Tenancy and Assured Shorthold Tenancy?
With Assured Tenancies, landlords are unable to regain possession of the rented property unless the tenant breaks the terms of the tenancy agreement. Once an Assured Tenancy has been agreed upon with the tenants, the landlord cannot change from Assured Tenancy to Assured Shorthold Tenancy. This provides the tenant with security of tenure, but offers less freedom and security to the landlord.
The Assured Shorthold Tenancy (AST) offers flexibility to landlords as, unlike the Assured Tenancy, the landlord has an automatic right to regain possession of the rented property after six months without being obligated to give reason – so long as they give the tenants a minimum of two months’ notice. This is a far safer option for landlords, due to the flexibility, and has been the default tenancy type in England and Wales since 1997.
Landlords have far more control over the tenancy situation with Assured Shorthold Tenancies, as they can give two months’ notice to the tenants and regain possession of the property whenever they wish, without having to give a reason or explanation as to why they would like the property back. With Assured Tenancies, landlords do not have this power. They cannot regain possession of property unless the tenant has broken the terms of the tenancy agreement, for example, by being in rent arrears or using the property for illegal purposes.
For this reason, it is uncommon for landlords to want to create an Assured Tenancy rather than an Assured Shorthold Tenancy, and sometimes Assured Tenancies are created inadvertently due to the landlord failing to follow the correct tenancy procedure.