What Is An Assured Shorthold Tenancy Agreement?

An assured shorthold tenancy (AST) offers some security of tenure to a tenant, giving them the right to occupy a property for an agreed period or so-called ‘term’, provided that they pay the rent and comply with the conditions of the tenancy.

The assurance works both ways, meaning that the landlord is entitled to regain possession of the property at the end of the term while the tenant has no further rights of occupation.

When can an AST be used?

An AST can only be used by private landlords and housing associations so long as the property is the tenant’s main home and is not occupied by the landlord.

This type of agreement cannot be used for business tenancies, pubs or holiday lets, nor for lodgers living in the landlord’s home. Additionally, their use is invalid when the rent is less than £250 per annum (£1,000 in London) or more than £100,000.

However, this information applies only to England and Wales. In Scotland, tenancies are normally assured or short assured tenancies, but a new type of agreement, the private residential tenancy, (PRT) came into force on December 1, 2017.

Short or long?

The word ‘shorthold’ is something of a misnomer in this context as an AST is not necessarily short. The term is used to distinguish it from tenancies that give renters ongoing rights, such as periodic tenancies. A new AST is often granted for fixed terms of six or twelve months, although there is no minimum term and the agreement can last for up to seven years.

Once the fixed term has expired, the landlord can either grant the tenant another fixed-term AST or allow the tenancy to continue on a month-by-month basis, in which case it becomes a periodic tenancy.

The Government has recently consulted on proposals to make the minimum term of an AST three years, although there would be a six-month break clause. If these proposals are adopted, there is likely to be new legislation concerning ASTs.

Creating an AST

As an AST is a legal contract between landlord and tenant, it is important to ensure that it is correct in all its details. If any errors were made in the wording, the agreement could be deemed invalid. Ultimately, it could cause difficulties in regaining possession of the property or securing the payment of rent.

Ideally, the agreement should state all the terms and conditions under which the tenant is entitled to occupy the property. These include, for instance, how they may use the accommodation; what they may not do; accepting responsibility for damage; and how much the rent is and when it should be paid.

There is no official version of what an AST should include, although it can save time and trouble to use a ready-made template from a reliable source, rather than trying to create an original from scratch. The official UK Government site provides a free example of a model agreement for an AST.

The National Landlords Association (NLA) provides templates for ASTs and other tenancy documents to paying members, and the Landlord Zone also offers a range of tenancy documents, both free and chargeable.

Important considerations

When a landlord enters into an agreement with a tenant, there are a number of legal obligations which must be complied with.

These include the Right to Rent, Tenancy Deposit Protection, Gas Safety Certificates and Energy Performance Certificates (EPCs), the ‘How to Rent‘ Guide, Terminating the Agreement, the Section 21 Notice for no-fault eviction and the Section 8 Notice for eviction with grounds for possession.