Most rental contracts in England & Wales between private landlords and tenants are Assured Shorthold Tenancies (AST).
This blog post covers information both landlords and tenants should be aware of before entering an AST. It also addresses common questions and situations which occur during a tenancy.
The information in this post is specifically for residential tenancies in England and Wales.
What is an Assured Shorthold Tenancy Agreement?
It’s a legal contract between landlord and tenant, which sets out the terms and conditions of a tenancy, such as the duration of the agreement and the rental amount payable by the tenant.
If your tenancy began on or after the 28th February 1997, it is likely to be an Assured Shorthold Tenancy, which is the most common type of tenancy in the rental private sector. Tenancies starting before the 28th February 1997, but after 15 January 1989, are more likely to be Assured Tenancies.
The primary difference between an “Assured Shorthold Tenancy Agreement” and an “Assured tenancy” is the legal procedure the landlord has to take in order to regain possession of the property. You should NOT use an AST if you have an Assured tenancy.
Similarly, many landlords make the mistake of using an AST when they actually have a lodger! A ‘lodger’ is not the same as a ‘tenant’, so you should not be using an tenancy agreement contract. Generally speaking, if you are a live-in landlord (i.e. you live in the same property as your tenant, and share communal areas, like the bathroom and kitchen), then you most likely have a lodger, and should use a lodger agreement instead. For more information on lodgers, please go to the lodger guide for live-in landlords.
Where can I get a good one from?
They’re available in all shapes and sizes; they can vary from 2 page documents to 20, and they’re available from a wide variety of sources, especially on the Internet. Therefore it is extremely important to source your tenancy agreement contract from a reputable supplier, which specifies how the document was compiled.
A large number of suppliers, especially the ones which offer free contracts, often supply out-of-date and poorly formatted versions. They also often contain invalid clauses which aren’t enforceable by law. This commonly occurs when landlords and/or letting agents modify (i.e. add their own clauses) to existing contracts without checking if the clause(s) are enforceable by law.
It is important to note that all written tenancy agreement contracts must be “Fair” and “Clear” and not intended to mislead the tenant in any way.
It goes without saying, failing to use a properly compiled contract can be an expensive mistake.
The Assured Shorthold Tenancy Agreements available for download on this website have been written by Stones Solicitors LLP. They are listed as a Top 200 Law Firm and is recognised by the two leading independent directories, Chambers and the Legal 500. Stones have expert solicitors specialising in landlord law. buy one of our tenancy agreements for just £4.99, and reuse it as many times as you wish.
For further information on the subject, please read our guide on how to check if your tenancy agreement is any good or not.
When should I use a Tenancy Agreement?
An AST should be used where a landlord is renting a property to just one person or multiple tenants (that know one another).
An AST is not suitable in all circumstances, and should not be used in the following conditions:
- If the property receives more than 100k per year in rent (This was 25k before October 2010)
- If the property receives very low, or no rent at all
- If the property is a holiday home
- If the property is let to a private limited company
- If the property is owned by the Crown or a government department
- If the property is being let with more than two acres of agricultural land or an agricultural tenancy
Do I need a written Tenancy Agreement?
There is currently no law which states that a tenancy cannot be formed through an oral agreement. In fact, many are (rightly or wrongly so). They can be either written or oral. However, it is strongly advised for all tenancy agreements to be written so both tenant and landlord knows exactly what the terms and conditions of the tenancy are.
With or without a written contract, from the moment a landlord and tenant agree on terms, and the tenant is permitted to enter and live in the property by the landlord, a legal tenancy is formed. The tenant will at this point be protected by their statutory, as will the landlord.
The problem is, if a dispute between landlord and tenant occurs, and there is no written proof of what was agreed upon, it becomes extremely difficult to prove either case. If everything is written in black and white, there can never be any question of what was agreed.
How do I know if I have an Assured Shorthold Tenancy Agreement?
There are several factors which will determine whether or not an Assured Shorthold Tenancy has been agreed. You will have an AST if:
- If the tenant pays less than 100k per year in rent
- If the tenant moved into the property on or after 28th febuary 1997
- If the tenant is renting from a private landlord
- If the tenant has rights to have privacy in the property where the landlord cannot enter the property without mutual agreement
How long can the contract last for?
Since the 28th of February 1989, an Assured Shorthold Tenancy can last for any duration, short or long. Before then, there was a requirement for a tenancy to be for a minimum of six months. However, while the tenancy can be as short as required, the tenant has a legal right to stay in the property for a minimum period of six months, regardless of whether the tenancy duration is for a shorter period.
If at the end of the fixed term of the tenancy is not renewed, it then becomes what is known as a Statutory Periodic Assured Shorthold Tenancy Agreement. This means that the terms of the original tenancy agreement still apply, but the tenancy continues on the rent schedule. For example, if rent is paid on a monthly basis, then the contract will become a monthly periodic tenancy.
There’s also what is known as a Contractual Periodic Tenancy; this is when no term for the end of the let is set and the tenancy simply continues until either party decide to bring it to an end.
Regardless of which status your agreement is in (fixed term or statutory), the landlord is legally required to give two months notice to the tenant and can’t obtain possession unless the tenant has breached their terms and consequently the landlord has grounds for eviction.
Tenancy Deposit Protection Scheme
All landlords and letting agents who take deposits for Assured Shorthold Tenancies in England and Wales must join a Government-authorised tenancy deposit protection scheme. This is a legal requirement, and failing to comply can lead to legal prosecution.
Within 14 days of receiving the deposit the landlord must secure and provide the tenant with details of the scheme chosen to safeguard the deposit. More details on Tenancy Deposit Protection Scheme.
Who keeps a copy of the contract?
There is no legal legislation specifying who keeps a copy. However, it’s advised that both landlord and tenant each have their own copy of the contract, which should be signed by both parties.
It’s important that everyone keeps their own copy, as it may prove to be useful if any misunderstandings occur.
What’s in the contract?
They can range from 2 pages to more than 20, so the contents of them can drastically vary. However, the following is generally always included:
Here are just a few of the issues the contract should cover:
- The amount of rent and deposit payable and the term of the tenancy
- Tenant’s obligation to pay bills and council tax
- Tenant’s obligation to keep the property and any garden in good order and repair
- To use the property for residential purposes only
- Not to cause nuisance or annoyance to others
- Not to keep pets without written permission
- Not to leave property unattended for more than 21 days without informing landlord
An agreement can be amended by adding or removing any terms as required, but all the terms and conditions must comply with the law in order for them to be enforceable. The tenancy agreement can give both the tenant and landlord more than their statutory rights, but cannot give any less.
Tenant And Landlord Basic rights
There are basic obligations a tenant and landlord must adhere to, even if they aren’t specified in the agreement, but which are given by law and are implied into all tenancy agreements. These terms form part of the contract, even though they have not been specifically agreed upon.
Some of the most common implied terms are:
- The landlord must carry out basic repairs
- the landlord must keep the installations for the supply of water, gas, electricity, sanitation, space heating and heating water
- the tenant has the right to live peacefully in the accommodation without nuisance from the landlord
- the tenant has an obligation to take proper care of the accommodation.
Changing the tenancy agreement
The terms and conditions can be amended after it has been created and agreed upon if both the landlord and tenant agree to the new conditions. The change should be recorded in writing, either by drawing up a new written document setting out the terms of the tenancy or by amending the existing written contract.
An oral agreement can also be amended. Usually the change will be oral too. In the case of a dispute, evidence of the variation can be provided if there were witnesses to the new agreement or simply by both parties acting on the variation, for example, by paying and accepting a new rent.
It’s important to be diligent when modifying a tenancy agreement. Ensure that ALL terms and conditions in the agreement are legal and enforceable by law i.e. a clause which suggests that the tenant or landlord have fewer rights than those given by common law or statute are not valid, and will not be enforceable by law.
It is always advised to seek legal advice from a professional when amending any form of legal contract.
Renewing a tenancy agreement
There are generally two common ways of renewing an existing tenancy. The good news is both processes are pretty straight forward.
Sign a new tenancy agreement
The first way is to simply draft a new tenancy agreement, which takes over when the previous tenancy ends. Both landlord and tenant will need to sign the contracts again, and agree to any new terms and conditions that may have been added e.g. rent increase.
Allow the existing tenancy to become a periodic tenancy
The second method is to do nothing, and allow the tenant(s) to continue their occupancy as they have been. In this instance, the tenancy will become what is known as a periodic tenancy (or “rolling tenancy”).
All the same terms and conditions in the expiring tenancy agreement will still apply, but the only difference is that the new tenancy agreement becomes periodic. The “period” is dependent on how frequently the rent is paid. For example, if the rent is paid on a PCM (Per Calendar Month) basis, then the contract will run on a month-by-month basis. Same principle applies if the rent is paid on a weekly or bi-weekly basis.
For more details on renewing tenancies, please refer to the How To Renew A Tenancy Agreement blog post.
Ending a tenancy agreement
Under the Housing Act 1988, a landlord has the legal right to repossess their property at the end of the tenancy. In order for a landlord to do this legally, they must follow the correct legal procedure, which includes serving a Section 21 notice (under section 21 of the Housing Act 1988) to the tenant.
A tenant is required by law to be given 2 months notice if the landlord wishes for them to vacate and repossess the property. Specifying the “end-date” in a tenancy agreement alone is not a valid repossession notice. A Section 21 should be served.
More details can be found on ending a tenancy agreement in the terminating tenancy agreement post, which includes all the methods available for both landlord and tenant.
Ending a tenancy agreement in the middle of the terms
In cases where both parties agree to terminating the agreement before the tenancy has ended, they can legally do so. This is called ‘surrender’. There are two ways that surrender of a tenancy can occur: by “operation of the law” or by a “declaration of surrender”.
Surrender of operation by law
This is when the tenant gives up their occupation of the property to the landlord and the landlord accepting this. This could involve the tenant handing over the property’s keys to the landlord and the landlord accepting that the agreement is over and that they now have possession.
Declaration of operation by law
This is when the tenant signs a “Declaration of Surrender”. This written document then acts as proof that the tenant has given up possession of the property to the landlord.
For a surrender to be legal, both parties must agree. It’s advised for everything that has been agreed to be written down so everyone knows where they stand. If a joint tenancy is in place, all the joint tenants and the landlord must agree to the surrender.
When a tenant has legally surrendered the tenancy, the landlord will then have the right of possession of the property under Section 5 of the Housing Act 1988. The landlord needs to end the agreement properly, before re-letting the property; otherwise the landlord could be accused of unlawful eviction.
Discrimination in tenancy agreements
The landlord must not discriminate against tenants based on race, sex, disability, sexuality or religion. It is against the law for the landlord to do any of the following:
- rent a property to a tenant on worse terms than other tenants
- treat the tenant differently from other tenants in the useage of facilities such as the garden
- evict or harass the tenant because race, sex, disability, sexuality or religion
- refuse to make reasonable changes to a term in the tenancy agreement which would allow a disabled person to live there.
Discriminating against sex, disability, sexuality or religion, generally don’t apply to live-in landlords. However, the landlord still cannot discriminate against race.
Pet Clauses in Tenancy Agreements
Most tenancy agreements will have a pet clause, which stipulates whether a tenant has been granted permission to keep a pet in the property. However, even if the tenancy agreement does state that pets are NOT permitted, the landlord can change his/her mind. In that case, the landlord should give written permission.
In the event of any damage caused by pets, the tenant will still be held liable and responsible. The security deposit can be used to cover damages caused by pets. However, just so tenants are clear about what is expected, landlords can provide a supplement Pet Clause Policy Form with the Tenancy Agreement.