Assured Shorthold Tenancy Agreement

What is an assured shorthold tenancy agreement?

An assured shorthold tenancy agreement (AST) is the most common form of private residential tenancy agreement in England*. It is a type of tenancy agreement.

An AST agreement will be used by a landlord when they are letting out a property. The AST agreement will grant the tenant the right to occupy and live in the property. It will set out the rights and obligations of the tenant and the landlord.

This AST agreement can be used to create a tenancy for a fixed period.

Different residential tenancy agreements should be used in Northern Ireland and in Scotland.

What are the different types of tenancy agreements?

It is possible to have a tenancy agreement that is a:

• fixed term tenancy – this type of tenancy will be granted for a certain, defined period of time.
• statutory periodic tenancy – this will occur where a fixed term tenancy was granted in the first instance. If the tenant remains in the property at the end of the fixed term and no new terms are agreed, a periodic tenancy will be automatically created. A periodic tenancy is a tenancy that continues on a rolling basis. This will be defined by the payment of rent (e.g. week to week or month to month).
• contractual periodic tenancy – this is a periodic tenancy that has been granted in this manner from the outset. In this case, the agreement will define the rolling term of the contract (e.g. monthly).

This agreement may be used to create a fixed-term tenancy, which may then convert into a statutory periodic tenancy.

What is the most common type of tenancy agreement?

Many tenancy agreements start with a fixed term (e.g. 12 months or 6 months). At the end of that term, the agreement may then convert into a periodic tenancy (a rolling tenancy)

What is the difference between a lodger agreement and a tenancy agreement?

A tenant will have particular rights under a tenancy agreement. In particular, a certain legal process must be followed to terminate the tenancy. A tenant will enjoy the exclusive occupation of the relevant space.

Under a lodger agreement, the lodger will only have the right to use a certain space or room and this will be in common with the owner. This means the owner (landlord) will retain the right to enter the room or space occupied by the lodger in all circumstances. Typically, a lodger can be asked to leave by the property owner providing written notice at any time.

What is the difference between a residential tenancy agreement and a business lease?

This tenancy agreement is a residential tenancy agreement. It will be used where the tenant will live in the property. The property will be their main home.

A business lease agreement will be used where the property will be used for business purposes only. Commercial tenants have different rights and responsibilities, including obligations regarding the maintenance of the property.

Is it mandatory to have a written tenancy agreement?

No. A landlord can rent a property without a formal written agreement. However, it is always best to set out an agreement in writing so that the tenant and the landlord have a clear understanding of the agreement. In particular, the agreement will help the tenant to understand the terms of occupation.

What does the security of tenure mean?

Security of tenure refers to the tenant's right to remain in the property. A landlord will need to follow a strict process to formally evict a tenant. The grounds that can be relied upon for eviction will depend upon the nature of the tenancy and whether it is a fixed term or periodic tenancy.

What is a guarantor?

A guarantor will agree to pay the rent if the tenant cannot or does not pay this. The guarantor can be in an individual or a corporate entity (a company). This tenancy agreement may include a guarantor as a party if desired.

What are the prerequisites of a tenancy agreement?

Before a landlord enters into a tenancy agreement, they should:

• check that the tenant has the legal right to rent a property in the United Kingdom - this means that their immigration documents must be checked
• ensure that the property is in a safe condition - this will include checking that the relevant safety standards are met (such as gas safety, electrical safety and fire safety)
• check whether they need permission to let the property from their mortgage lender (if applicable)
• ensure that there are not any restrictions imposed by their insurance policy regarding subletting
• check whether they need to notify the local council (usually the case where there are a number of different households/families in one house)

A landlord may also request to undertake additional checks in relation to tenants, such as:

• credit checks
• references (e.g from a previous landlord)
• criminal record checks

If a deposit is payable, the parties will need to make arrangements for this to be paid by the tenant at the outset of the agreement.

Who can enter into a tenancy agreement?

The landlord must have the authority to let the property, so they must either own the property or have a legal right or interest in the property. The landlord should ensure that they have the relevant permission to let the property, which will include permission from a mortgage lender. The tenant should be over the age of 18 and must have the right to rent a property in the United Kingdom.

What can the duration of a tenancy agreement be?

The parties can agree upon a fixed term. Commonly, this will be a period of 6 or 12 months. After the fixed term, the tenancy agreement can be converted into a periodic tenancy.

This tenancy agreement is designed for use where the fixed term will not exceed 3 years. If the parties wish to create a tenancy agreement for a term exceeding 3 years, then there will be additional requirements. If the parties would like to get advice about a tenancy agreement for a term exceeding 3 years, they should seek specialist advice from a regulated lawyer.

What must the parties do once the tenancy agreement is ready?

The parties should sign and date the agreement once it has been finalised. After the document has been signed by both parties, each party should retain a signed copy. The tenant may then occupy the property under the terms of the agreement.

What documents should be attached to the tenancy agreement?

The agreement must include an inventory and schedule of condition should be completed and attached to the agreement before signing.

A property inventory and schedule of condition will provide a summary of all the items (such as furniture and white goods) in the property and will note the condition of those items.

What must a tenancy agreement contain?

A tenancy agreement should include information about:

• definitions – this will define key information relevant to the tenancy such as the term, the rent amount and any deposit amount
• letting – this will confirm that the property will be let to the tenant by the landlord for the relevant term
• the right of the tenant to rent - this will confirm and delcare that the tenant is over 18 and has the legal right to rent the property in accordance with immigration laws
• the tenant's obligations – this will include important information including the obligation to pay rent and any other charges. It will also refer to any applicable restrictions as part of the tenancy (e.g. making alterations, subletting etc.)
• the deposit - this will include when and how any deposit must be paid. It will also declare and confirm that the landlord will comply with the regulations under the deposit protection scheme
• the landlord's obligations – this will include important information about the landlord's responsibilities including the need to maintain the property and carry out repairs
• the guarantor obligations (if applicable) – this will confirm that the guarantor shall be responsible for the payment of rent and other charges in the event of default

How can a tenancy agreement be terminated?

A tenant can generally end an assured tenancy agreement:

• if there is a clause in the agreement that allows them to end the agreement before the end of a fixed term - this is known as a break clause
• by leaving the property before the end of the fixed term
• by sending a 'notice to quit' (a written notice) - this can be sent once a fixed term tenancy has converted into a periodic (rolling) tenancy

A landlord can generally end an assured tenancy agreement:

• by sending a notice after the tenant has been in the property for 4 months (by giving 2 months' notice to leave) - if there is a clause in the agreement that allows them to end the agreement before the end of a fixed term (this is known as a break clause)
• by sending a notice 2 months before the end of the fixed term- to prevent the agreement from converting into a periodic (rolling) tenancy
• where the landlord is relying on certain legal grounds* - including rent arrears or anti-social behaviour

A landlord should seek advice/obtain information about the termination process, required notice periods and the relevant legal grounds before ending a tenancy.

Which laws apply to a tenancy agreement?

The following legal provisions are most relevant to a tenancy agreement:

• The Law of Property Act 1925
• The Housing Act 1988
• The Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083
• The Consumer Rights Act 2015
• Tenant Fees Act 2019
• The Landlord and Tenant Act 1985
• The Immigration Act 2016
• The Protection from Eviction Act 1977

A property owner should also consider safety/legal requirements relating to:

• Gas safety requirements - The Gas Safety (Installation and Use) Regulations 1998, SI 1998/2451
• Fire safety - Furniture and Furnishings (Fire Safety) Regulations 1988/1989, 1993 and 2010
• Electrical safety - The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020, SI 2020/312
• Safety alarms - The Smoke and Carbon Monoxide Alarm (England) Regulations 2015, The Smoke and Carbon Monoxide Alarm (Amendment) Regulations 2022)

The government website has more information about the legal obligations of landlords.

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