27 Jan Assured Shorthold Tenancy Agreements (AST) and Buy-to-Let Property
With the recent influx of Buy-To- Let Investments and Letting properties, we thought it be prudent to write an article surrounding Assured Shorthold Tenancy Agreements (AST) and what they mean both to Landlords and Tenants alike. In short, an AST is a form of assured tenancy agreement which allows the owner or the property (the Landlord) to let or rent the property while retaining the right to the property, meaning the landlord can repossess it at the end of the tenancy. The difference between at AST and other types of assured tenancy agreements is that the Tenant in effect will waive their right to remain at the property at the end of the term.
Therefore, in layman’s terms, this is a simplified form of a lease where by you are renting out the asset in accordance to prescribed rights the landlord will be granting the tenant for standard use of a particular property. Generally as a rule of thumb and in line with current legislation, a Tenancy agreement created on or after 28th February 1997 is automatically classed as an AST unless otherwise specifically stated.
What qualifies an Assured Tenancy Agreement?
The Housing Act of 1988 specifies various conditions and requirements which must be met for an AST as follows-
1) The tenant must be an individual (as opposed to a company)
2) The tenant must occupy the property in question as their only and primary residence
3) The tenancy must not be one where it cannot be an assured tenancy; for instance the tenant is a company or the rent is too high – in which case a common law tenancy might be the way forward.
How long does an Assured Shorthold Tenancy usually last?
Assuming the AST has been created after 28th February 1997, the term can be one the two below –
1) For a fixed term which is specified on the tenancy.
2) A contractual periodic tenancy will run indefinitely from one from one rental period to another.
Though there is no minimum term for either of the two forms above, the Landlord will be unable to obtain any order of possession until a minimum of 6 months. It is worth noting however that any Tenancy Agreements granted before February 1997 had to be for a minimum term of 6 months which appears to be cause for the common misconception of minimum terms of current AST’s. By extension of the above, legally there are also no maximum limits on how long the length of the term of an AST can be; however it is common practice to usually use AST’s for short periods of time and there may be practical issues to consider if a longer term is granted.
Can Express Conveyancing assist you in preparing an Assured Shorthold Tenancy Agreement (AST) or conveyancing on a property with a tenancy agreement?
Yes we can. Our specialist property lawyers can assist you with all aspects of Tenancy Agreements, Sale or purchase conveyancing of investment properties with tenants already in possession and off-plan forward purchase properties. Please contact our team on 0203 375 2187 for a bespoke quote or no obligation initial discussion of how we may be able to assist you.