An assured shorthold tenancy (AST) is a common type of rental agreement in England and Wales. It sets out the terms under which a tenant can occupy a property and the landlord’s responsibilities.
An assured shorthold tenancy (AST) is the predominant form of tenancy in England and Wales, (other types of tenancies include but are not limited to: excluded tenancies/licences, assured tenancies, fixed term/periodic agreements). ASTs automatically apply to most new tenancies and when you invest in a buy-to-let property it is the most likely agreement you will use.
An AST provides a structured yet flexible framework for both landlords and tenants, ensuring clear terms and protections within a fixed-term agreement. AST’s offer the following benefits:
For tenants, it’s important to grasp their rights and responsibilities under an AST. The tenancy agreement typically specifies:
An assured shorthold tenancy (AST) is legally defined under the Housing Act 1988. This act sets the framework for how these tenancies should operate, ensuring both landlords and tenants understand their respective obligations and rights.
A tenancy must meet specific conditions to qualify as an AST. For instance, the tenancy agreement must not have started before 15th January 1989. An AST is not applicable if the property’s rent exceeds £100,000 per annum or is very low (£250 outside Greater London or £1,000 within Greater London) if it’s a business tenancy, it’s a holiday rental property or if the landlord is a local council.
ASTs are known for their flexibility and clarity. They do not apply to properties rented for business, agricultural purposes, or holidays. One of the primary aims of an AST is to minimise disputes by clearly defining rental terms and conditions from the outset. An AST test can help ensure that these terms are well understood and agreed upon by both parties.
While there is no minimum period for an AST, they typically ensure a minimum of six months of eviction protection, offering tenants a sense of security. This flexibility makes ASTs suitable for a wide range of rental situations, providing both landlords and tenants with a clear legal framework to operate within.
An assured shorthold tenancy agreement must outline several key clauses to ensure clarity and prevent disputes. The agreement should include:
Certain clauses in an AST are deemed illegal and cannot be legally enforced. For instance, clauses charging interest on overdue rent above a statutory limit are illegal under the Tenant Fees Act. Similarly, requiring tenants to pay for professional cleaning services at the end of the tenancy is not enforceable.
Tenants and landlords should be aware of these illegal clauses to avoid potential disputes and ensure the tenancy agreement is fair and lawful.
As a landlord you will have several critical obligations under an assured shorthold tenancy to ensure the property remains in good condition and the tenancy runs smoothly. These responsibilities include maintaining the property, protecting tenant deposits, and providing essential information to tenants.
Maintaining the property’s structure and exterior elements like drains, gutters, and external pipes in good condition is a fundamental obligation. Landlords must also keep installations for water, gas, electricity, and sanitation in proper working order and ensure these installations are safe.
Tenants are entitled to live in a property that is in good repair, including the structure and exterior. Landlords must address any structural issues with roofs, walls, and windows, ensuring these are properly maintained.
Interior repairs for installations related to water, gas, and electricity, such as boilers and radiators, are also the landlord’s responsibility. Preserving heating and hot water systems in good condition is vital for the sustenance of a livable property.
You are required to:
Landlords must provide tenants with necessary safety certificates, such as a Gas Safety Certificate before the lease begins and annually thereafter. An Energy Performance Certificate (EPC) showing the energy efficiency of the property must also be provided.
Tenants are entitled to the name and address of the landlord they pay rent to. If a landlord fails to provide the required guide for tenants, they cannot evict a tenant using a Section 21 notice.
Without a written tenancy agreement, tenants and landlords might find themselves in an awkward situation. Verbal assured shorthold tenancies are legally binding and provide the same statutory rights as written agreements. However, misunderstandings are more likely without a written document, leading to disputes over terms.
Written agreements are favoured as they offer more explicit proof of terms and conditions, thereby minimising potential conflicts.
Verbal tenancy agreements, while legally valid, can often lead to misunderstandings and enforcement issues. Once a landlord accepts rent from a tenant, the verbal agreement is considered legally binding. Both parties must agree to the tenancy terms for the agreement to hold. However, without a written document, proving the agreed terms can become challenging in legal disputes.
Landlords may also find it harder to regain possession of their property compared to situations with a written agreement.
Digital tenancy agreements are becoming increasingly common and are legally valid, provided they meet specific requirements such as electronic signatures. These agreements hold the same legal weight as traditional written agreements and can help streamline the leasing process. Landlords and tenants should keep electronic records of digitally signed agreements to avoid disputes.
Verifying that these digital agreements fulfil all legal prerequisites is vital for their enforceability.
Here at Prosperity Wealth we fully support our investors by offering a property management service for managing all tenancies within our investment property developments. We offer a comprehensive range of support services that ensure compliance with relevant regulations and optimise rental income.
Our expertise in all things investment properties, helps our investors maximise rental returns and property value appreciation whilst also enabling our investors to concentrate on expanding their portfolios.
Contact us today via phone on +44 (0) 121 237 4610 or email info@prosperity-wealth.co.uk to get started or to ask any questions you may have.
An assured shorthold tenancy (AST) is the most common type of tenancy agreement in England and Wales, offering a structured yet adaptable framework for both landlords and tenants.
Common clauses in an AST agreement often include details about rent, utilities, property maintenance, tenant restrictions, and obligations to keep the property clean and well-maintained.
Tenants under an AST have responsibilities to pay rent on time, maintain the property, and live in a safe environment provided by the landlord. Be sure to also secure the property when away.
Without a written tenancy agreement, verbal agreements are still legally binding but enforcing and proving the terms can be challenging.
Prosperity Wealth supports investors by managing assured shorthold tenancies within their property developments, ensuring compliance and optimising rental income for them.
