What is the difference between a Short Assured and an Assured Tenancy Agreement?
We’ve already mentioned in our articles an Assured shorthold tenancy (AST) and an Assured tenancy (AT) more times that we can count. There’s no need to tell you that a tenancy agreement is the contract between landlords and their tenants, which sets out the legal terms and conditions of the tenancy. But what are the differences between the two agreements – AT and AST? Keep on reading to find out.
The main difference (and the most significant one) is that a landlord who has let their property under a short assured tenancy has an automatic right to regain possession of it at any time after the fixed term of the tenancy agreement has expired. The only thing necessary is the landlord to provide the required two months’ notice to the tenant in order to get the property back, without having to give a reason or explanation why. Signing an AST is a far safer option for landlords, due to the flexibility, and gives them far more control over the tenancy situation. This tenancy type has been the default agreement in England and Wales since 1997.
Landlords who have let their property using an assured tenancy agreement do not have this right as the tenant has security of tenure. Landlords who are under the terms of an AT have to wait until particular limited circumstances have occurred. In this case they should appeal to the Grounds, pointed in the Housing Act 1988, to seek a possession order against the tenant/s.
You can find the full list of the Grounds .
It’s rather unusual to have an AT, especially in the capital. The main reason often is that the landlord has failed to properly follow the rules in relation to the service of the AT5, so the AT is created mostly inadvertently. This type of agreement provides the tenant with security of tenure, but offers less freedom and security to the landlord, since the landlords are unable to regain possession of the rented property unless the tenant breaks the terms of the tenancy agreement.
However, once the AT is created and agreed upon, the landlords cannot change it to AST.
Assured shorthold tenancy agreements are created when:
- The proprietor is a private landlord or a housing association
- The tenancy has begun on or after 15 January 1989
- The property is the main residence of the tenant/s
- The landlord doesn’t live in the property
A tenancy can’t be an AST if:
- It has started before 15 January 1989.
- The rent exceeds £100,000 a year.
- The rent is lower than £250 a year (or lower than £1,000 if the property is in London.)
- The property consists of business premises.
- The property is a holiday let.
- The property is agricultural land or holdings.
- The property is university halls of residence.
- The landlord is a local council.
Actually, the same is valid for the AT agreements as well.
* Did you know, that even if you don’t have a written contract with your tenant, a tenancy agreement will still be in place. The tenancy will be formed as soon as the tenant pay the first rent – this is state under s54 of the Law of Property Act 1925.
We’re pretty sure that there’s no need to tell you how important the written agreement is, so will simply pass that part and move on to the things happening after the signing.
Here’s a list of the things that your AST must necessarily include:
- Of course first comes the names of everyone involved in the agreement.
- The next logical thing that certainly should be presented is the exact address of the property.
- The AST has to point the start date and the length of the tenancy .
- The agreement should include the period in whichthe rent will be paid and it’s amount, of course.
- The value of the deposit and by which terms it can be given back to the tenant. The agreement should as well state what the reasons for withholding all or part of the deposit may be.
- The tenants’ responsibilities, while indwelling in the estate, such as paying utility bills and council taxes, and maintaining the property.
- The landlords’ obligations, such as taking care of any necessary repairs in the property.
- It is advisable the agreement to include the terms under which the rent will be reviewed and in what period of time.
- State whether the property can be sublet and under what terms this may happen.
- It’s a common practice the agreement to include a so-called
breaking clause, which allows both tenant and landlord the opportunity to terminate the tenancy agreement early during the fixed-term.
- The agreement will be considered as illegal if it discriminate on the grounds of: race, religion, gender, sexual orientation, being pregnant or having a baby, or disability of any kind.
NB! - Before you signed the AST, ensure that the agreement complies with the law. If you have any concerns about what the agreement can or can’t include, consult your legal counsel.
You can download a template of assured shorthold tenancy agreement here:
NB! - If you want to add to or remove parts of the tenancy agreement, we strongly advise you to do this in conjunction with your legal counsel. You need to make sure that the amendments you want to apply comply with the law. So carefully discuss all the changes you want to make before add them in the agreement.
You can read the Model Agreement for an Assured Shorthold Tenancy and Accompanying Guidance, provided by the Department for Communities and Local Government
Google knows almost everything. At least it is well informed what the most common questions are when it comes to tenancy agreements. We’ve the ones asked most frequently and you can see their answers below.
- What are the different types of tenancy agreements?
Obviously, we are leaving the AST and AT aside, still there is a few more tenancy agreements, that you may come across. Those are: excluded tenancy (knows as
lodging), non-assured tenancy, regulated tenancy and company let.
- What does assured shorthold tenancy (AST) agreement mean?
We think that we’ve already answered this one but still in short – AST is the most common type of agreement signed by the landlords and the tenants when residential properties are let to private renters. It gives the tenant the right to exclusive use and enjoyment of the described residential property in exchange for money paid to the landlord.
The agreement outlines the rights and responsibilities of both the landlord and the tenant/s during the tenancy agreement term.
ASTs are typically signed for a period of six months (this is currently the required minimum) or a year - still, depending on the specific situation, the period can be longer. There’s no settled maximum length of an AST agreement, because AST are meant to be for short periods, the agreements usually cover between 6 months and 3 years.
The tenants, who have school-age children, for example, often prefer a longer tenancy agreement as it provides a certain level of security for them. The longer the length, the more rights are accrued to the tenant such as better protection from indiscriminate fee increases and repossession of the house by the landlords.
However, a longer tenancy may be good for the landlord as much as for the tenant. It simply provides a steady income, which isn’t guaranteed by a short tenancy.
What you should remember is that after this initial agreed period, the landlord is able to evict the tenant without a legal reason. Still a notice of a minimum of two months should be served in advance.
If the both parties do nothing after the fixed period has expired the AST will continue to run indefinitely as a statutory Periodic Assured Shorthold Tenancy under the same previously signed terms. The tenancy starts to run on from month to month (or from week to week, if rent is paid weekly), until the landlord decides to end it or the new agreement is signed. Again if the landlord wants to end the tenancy, he or she can do so by giving as little as two months' notice, by serving a section 21 notice.
- What does assured tenancy (AT) agreement mean?
It’s only fair to provide a summary for this type of agreement as well, so here it is:
There are a few mandatory requirements to have an assured tenancy agreement. The tenant pays rent to a private landlord, who doesn’t live in the same building, and has moved in the property between 15 January 1989 and 27 February 1997. No difference with the AST here.
Nowadays this type of agreements are mainly used for properties let by a Housing Association or by a Housing Trust.
Still the private tenants who are under the terms an AT have long-term tenancy rights.
We’ll say this again – the only significant difference between AT and AST is that the landlord cannot end the tenancy, unless the tenant breaks the terms of the tenancy agreement.
*The non-shorthold version of the assured tenancy (AT) gives tenants long-term security of tenure, and tenants are entitled to stay in the property until either they choose to go, or the landlord can gain possession on one of the 17 grounds listed in Schedule 2 of the Housing Act 1988, since possession under the
no faultsection 21 procedure is not available for assured tenancies.
The assured tenancy might roll on a week-to-week or month-to-month basis (this is called a periodic tenancy) or be for a set period such as 12 or 18 months (this is known as a fixed-term tenancy). Then again, when the fixed term tenancy expires, it continues as a periodic tenancy unless you sign up for a new fixed term.
- How much notice does the tenant have to give to the landlord before leave the property?
Well, it depends. The tenancy agreement is the first place to look for tenant notice requirements. In the majority of cases it set out the length and form of the required notice, and on whom and at which address the notice should be served.
It’s almost certain that the tenants must provide the notice in writing and in line with periods of the tenancy.
If the tenant intend to leave at the end of the fixed term, he or she still has to give notice within the fixed term, which is typically one month.
If the tenancy agreements require tenants’ notice longer that 30 days, the chances are that it will be considered as an unfair term and wouldn’t have a legal value.
If the tenancy agreement states nothing about tenant notice within the fixed term, the tenant is entitled to simply leave on the last day of the term. That will be the end of the tenancy and the tenant will have no further rent liability.
However, if the tenant stays beyond the last day of the fixed term, even by one day, a notice to quit is required. In this case the statutory or the contractual periodic tenancy will be still in force and the tenant will be liable for rent until the end of the notice period.
- Does the tenant still have to give a notice to quit after a Section 8 or Section 21 Notice is served by the landlord?
The short answer is Yes.
Even after the landlord has served a notice of seeking possession, the tenant is still required to give a formal notice to quit. Otherwise the tenant can be held liable for rent until the given notice expires. Here’s why - the effect of a Notice Seeking Possession is not to terminate the tenancy. Legally, the tenancy can only be brought to an end either by a proper notice to quit, by the landlord accepting a surrender of the tenancy, or by a possession order of the court.
- What happens with the provided deposit?
Normally, the deposits are paid by new tenants to landlords at the beginning of the tenancy to secure the property and provide funds in the event of default, or damage to the estate.
If a home is rented on an assured shorthold tenancy (AST) that started after 6 April 2007, the landlord is obligated to put the deposit in a government-backed tenancy deposit scheme (TDP).
In England and Wales deposits can be registered with one of either:
The landlord or the letting agent have to put the deposit in a scheme within 30 days of receiving it from the tenant. Before the end of this period the landlord must inform the tenant of certain details regarding the TDP, which are not stated in the tenancy agreement, such as: how the deposit is being protected, the name and contact details of the TDP scheme, and the dispute resolution service, that it provides.
If the landlord has failed to use a TDP scheme, the a tenant can apply to a county court. The court can order the deposit to be repaid to the tenant or paid into a TDP scheme within 14 days. It also has the authority to order the landlord to pay the tenant up to three times the deposit amount and may as well decide that the tenant doesn’t have to leave the property when the tenancy ends.
At the end of a tenancy, the landlord has to return the deposit to the tenant within 10 days of both parties has agreed on the amount. If there is a dispute, the TDP scheme will continue to protect the deposit until it is solved. The final decision is made by the dispute resolution service, offered by the TDP scheme and it is binding for both parties.
- How does the sublet work?
We are talking about
subletting, when the existing tenant lets all, or part of, a property to another party (referred to as a subtenant).
Let’s get back to the tenancy agreement. The signed contract must state whether subletting is permissible or not. Even if it is legitimate by the agreement, the tenant still may need to obtain permission from the landlord, and the original tenancy agreement will probably set conditions for any sublet.
Normally, the subtenant will pay rent to the tenant (in this case often termed as the mesne landlord), and they in turn will pay rent to the
headlandlord. The agreed conditions under which the subletting is held may vary, that’s why we’ll leave them behind.
If permission to sublet is not sought or given, but the tenant proceeds, the landlord may be entitled to take legal action such as eviction proceedings. And that’s not all - it may also be a criminal offence if a social housing tenant sublets a property unlawfully.
The chances are that you’ve heard about Airbnb and probably even used the accommodations, listed there, at least once. Back to the topic – in recent years, the number of landlords who have pursued possession proceedings against their tenants after finding that they have sublet the property through sites such as Airbnb without permission, is drastically increasing.
In conclusion – we’ve already said that the proper maintaining of the property is obligation either for the landlords and for the tenants and we can offer some much needed help, since our professional cleaning services are available in the whole of London.
NB! - We strongly remind you - Never to forget to: