Assured Shorthold Tenancy Agreement

What is an assured shorthold tenancy agreement?

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

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 agreement for a fixed period.

Since 28 February 1997, almost all private residential tenancies have been AST agreements. Under an AST agreement, the landlord may repossess the property in certain circumstances.

We have different residential tenancy agreements available for use in Northern Ireland and for use in Scotland.

What are the different types of assured shorthold tenancy agreements?

It is possible to have an AST 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 the a fixed term AST was granted in the first instance. If the fixed term expires and the tenant remains in the property (where no new terms have been 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 assured shorthold tenancy agreement?

Many private residential 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.

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

A tenancy agreement is different from a lodger agreement. A tenant will have particular rights under a tenancy agreement (including protection from unfair eviction). The formal legal term for a lodger agreement is a 'licence to occupy'. A licence is an agreement that permits a person to do something. A licence to occupy therefore permits a person to occupy a space or part of a property but does not grant a legal interest in the property. A tenant will enjoy exclusive occupation of the relevant property, whereas a lodger will only have the right to use a certain space or room and the landlord will retain the right to occupy that space at all times.

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

A residential lease (an assured shorthold tenancy) will be used where the tenant will live in the property and the property will be used as their home. A business lease agreement will be used where the property will be occupied for business purposes only. Commercial tenants have distinct and different rights and responsibilities.

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 about the agreement. In particular, the agreement will help the tenant to understand the extent of the agreement and the terms of occupation.

What does 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 in order to formally evict a tenant. The grounds that may 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 in the event that the tenant cannot or does not pay this. It is possible for the guarantor to be in an individual or a corporate entity (a company). This assured shorthold tenancy agreement may include a guarantor as a party, if desired.

What cannot be included in an assured shorthold tenancy agreement?

A tenancy agreement should not include any clauses which:

• restrict the legal rights of tenants; or
• attempt to waive or diminish the legal obligations of the landlord.

What are the prerequisites of an assured shorthold 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
• ensure that the property is in a safe condition - this will include checking that the relevant safety standards are met
• check whether they need permission to let the property their mortgage lender (if applicable)
• notify their home insurance provider that they are renting the property
• check whether they need to notify the local council

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 an assured shorthold 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.

Who cannot enter into an assured shorthold tenancy agreement?

A person who is under the age of 18 should not generally sign a tenancy agreement. A landlord should not grant a tenancy agreement to a person if they do not have the right to rent a property in the United Kingdom.

What can the duration of an assured shorthold 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 covert into a periodic tenancy.

This assured shorthold tenancy is designed for use where the fixed term will not exceed 3 years. If the parties wish to create an assured shorthold tenancy agreement for a term exceeding 3 years, then there will be additional requirements. If the parties would like to seek 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 assured shorthold 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. The landlord should ensure that they comply with their ongoing obligations as a landlord.

If the parties wish to terminate the agreement, they should follow the prescribed processes.

What documents should be attached to the assured shorthold tenancy agreement?

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

 

What must an assured shorthold tenancy agreement contain?

An assured shorthold tenancy 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

Which laws apply to an assured shorthold tenancy agreement?

The following legal provisions are most relevant to an assured shorthold 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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