Assured Shorthold Tenancies
Most tenancies granted by private landlords since February 1997 will be “Assured Shorthold Tenancies” (AST). The concept embodied in the Housing Act 1996 is to reassure landlords that they will be able to easily recover possession of their property – and by doing so stimulate the availability of rented accommodation.
A tenancy will qualify as an AST if:-
- The tenancy is for a fixed term of at least 6 months.
- That the terms of the agreement provide that the landlord may not terminate the tenancy within the first 6 months – all the time that the tenant fulfils his obligations under the tenancy.
- That before the tenancy commenced the landlord served upon all of the tenants a notice in a specifically set out format.
It is not a requirement that there is a written tenancy agreement – although the landlord must provide the tenant with written particulars if requested by the tenant.
Failure to provide key information including details of the rent and dates of the tenancy is a criminal offence.
A landlord may recover possession during the initial 6 month term of the tenancy if:-
i. The mortgage lender requires possession – in order to exercise their right to sell.
ii. There are at least 8 weeks arrears of rent.
iii. The tenant breaches the obligations under the tenancy.
iv. The tenant has permitted the condition of the property to deteriorate.
v. The tenant has allowed the property to be used for illegal/immoral purposes or has caused nuisance or annoyance.
If the tenant remains in occupation to the end of the fixed term the landlord may elect to require the tenant to enter into a new fixed term contact or in default the tenant will become a “periodic” tenant and the landlord may at any time seek possession of the property by serving a “Section 21” notice which must give the tenant at least 2 months notice to terminate. Considerable care needs to be taken with the drafting of these notices.
If the landlord is seeking possession pursuant to Section 21 of the Housing Act 1996 and certain conditions are met (most notably that the claim is limited to possession and is not also seeking to recover agreed rent) the landlord may be entitled to use the “accelerated procedure” and gain possession without a court hearing – though a Court Order will also be necessary where the tenant does not move out voluntarily (see separate note re harassment of tenants – and possible criminal sanctions).
Under the accelerated procedure the court will usually direct the tenant to vacate after 14 days – though a tenant may be given a maximum of 6 weeks in exceptional circumstances. Once again, the Possession Order may be enforced only through the court by seeking a warrant for possession (the County Court bailiff taking possession).
Most landlords will ask for one or more months rent deposit. This deposit has to either be held by a Government approved company or the landlord has to pay an insurance premium to cover the amount (see our separate briefing note). There is an arbitration scheme available if there is a dispute about how much of the deposit the landlord should return when the tenant leaves. The landlord may ask for a guarantor for the tenants as well as a deposit.