What is an Assured Shorthold Tenancy (AST)?
A Brief History:
Assured Shorthold Tenancies (ASTs) are a common form of tenancy in the United Kingdom’s private rented sector. They were first introduced by the Housing Act of 1988, which repealed and replaced the previous Rent Act 1977 and introduced a new legal framework for the sector.
Before the Housing Act 1988, there were two main types of tenancies in the private rented sector – Rent Act tenancies and protected tenancies. These tenancies provided tenants with greater security of tenure but limited landlords’ ability to regain possession of their properties.
The Housing Act 1988 introduced a new form of tenancy – the AST – which aimed to provide a more flexible and balanced legal framework for both landlords and tenants. The AST introduced a minimum term of six months, during which time the tenant could not be evicted except for specific reasons, such as rent arrears or breach of the tenancy agreement.
After the initial six months, the landlord could regain possession of the property by giving the tenant a two-month notice period, without having to provide a reason for doing so. This new framework gave landlords more flexibility in managing their properties while providing tenants with a degree of security of tenure.
The Evolution of ASTs:
Over the years, the AST has undergone several changes to reflect the changing rental market and the needs of both landlords and tenants. In 1996, the Housing Act was amended to include provisions that allowed landlords to regain possession of their property quickly and efficiently. The Act introduced a new type of notice, known as the Section 21 notice, which allowed landlords to evict tenants without having to provide a reason for doing so.
In 2015, the government introduced further changes to ASTs through the Deregulation Act. The Act aimed to improve the standards of rental properties and provide greater protection to tenants against retaliatory eviction and unfair rent increases. The Act introduced restrictions on the use of Section 21 notices, which prevented landlords from evicting tenants for certain reasons, such as if the property was in disrepair or if the landlord had failed to address the tenant’s complaints.
The Tenancy Agreement:
The Assured Shorthold Tenancy Agreement, is a legal agreement between a landlord and tenant in the UK. It is the most widely used type of tenancy agreement in the country and is suitable for a range of residential rental properties, including single let properties, flats, and single rooms in HMOs.
Minimum Room Sizes
One of the key provisions of the HMO Standards is minimum room sizes. For example, the minimum bedroom size for one person is 6.51 square metres and for two people over 10 years old, it is 10.22 square metres, however local authorities may have their own stricter requirements.
Kitchens generally must measure 7 square metres for every 5 residents, but again certain local authorities may have their own guidelines.
Generally, the minimum living room size is 11 square metres for every 5 residents, but local authorities may have their own specific regulations regarding this. Read more about HMO Room Sizes.
What should be in an HMO Tenancy Agreement?
A tenancy agreement for an HMO property should include all the essential information that a typical tenancy agreement would have, such as the names of the landlord and tenants, the rental amount, the payment due date, and the length of the tenancy. However, there are some specific differences that should be considered in an HMO tenancy agreement compared to a single let tenancy agreement.
When it comes to the number of tenants and the shared areas, an HMO tenancy agreement should specify the number of tenants living in the property and the shared areas, such as the kitchen, bathrooms, and living areas. This helps to establish clear lines of responsibility and avoid confusion about who is responsible for what.
Typically, in HMO’s, all bills such as council tax, water, electricity, gas, and sometimes even cleaning, are included in the rent. This should be clearly stated in the HMO tenancy agreement to ensure all parties are aware of what is included in the rent and what is not.
The rights and responsibilities of each tenant and the landlord should also be specified in the tenancy agreement. For example, the tenants may be responsible for keeping their own bedrooms clean and tidy, but the landlord may be responsible for cleaning the shared areas. The tenancy agreement should also include information on the shared facilities, such as the kitchen, bathrooms, and living areas, and who is responsible for their maintenance.
Another important aspect of an HMO tenancy agreement is the notice period for the landlord to enter a tenant’s bedroom. In a typical AST, the landlord must give the tenant 24 hours’ notice before entering the property, but this may differ in an HMO property where the landlord may have more frequent access to the shared areas and may not be required to give notice.
A written tenancy agreement is essential in documenting the terms and conditions of the tenancy. It sets out each party’s obligations and provides a clear record of what has been agreed upon. If there is a dispute between the tenant and landlord, a written tenancy agreement can provide vital evidence in court. However, if no written agreement is in place, the tenant is still entitled to legal protections and rights.
What are Tenant’s Rights Without a Written Agreement?
A tenant has rights, whether or not there is a written tenancy agreement in place. These rights include:
- The right to quiet enjoyment: The tenant has the right to enjoy their home without unnecessary interference from the landlord. The landlord cannot enter the property without the tenant’s consent or a valid reason.
- The right to a safe and habitable property: The landlord must ensure that the property is safe and habitable. This includes providing adequate heating, water, and electricity and carrying out repairs when necessary.
- The right to notice: If the landlord wants to end the tenancy, they must provide the tenant with a written notice.
- The right to dispute resolution: If there is a dispute between the tenant and landlord, either party can seek mediation or arbitration to resolve the issue.
Invalid Clauses in a Tenancy Agreement
In some cases, landlords may try to include clauses in a tenancy agreement that are not legally binding. For example, a clause that requires the tenant to move out within one week if the landlord tells them to leave. This type of clause is not enforceable, and the tenant has the right to dispute it.
Why are Some Clauses Not Legally Binding?
There are various reasons why a clause may not be legally binding. For example:
- Unfair Contract Terms: The clause may be considered unfair and unreasonable under the Unfair Contract Terms Act 1977. This act aims to protect consumers from terms that are not negotiated fairly or are excessively one-sided.
- Contrary to Statutory Rights: The clause may conflict with the tenant’s statutory rights under the law.
- Unenforceable Under Common Law: The clause may be unenforceable under common law, which is a body of law based on judicial decisions.
Using Outdated or Self-Written ASTs
Landlords should avoid using outdated or self-written ASTs as these may not be legally binding or may conflict with the latest legislation. Instead, it is crucial for landlords to use a correct AST written by a solicitor or professional. A professional AST includes all necessary clauses, reflects the specifics of the rental relationship, complies with the latest legislation, and provides protection for both the landlord and the tenant.
Seeking legal or professional advice when drafting an AST ensures compliance with the latest legislation and provides a legally binding document that protects both parties. Using outdated, randomly downloaded or purchased, or self-written ASTs may lead to legal disputes, conflicts with the tenant’s statutory rights, and leave landlords vulnerable to financial loss and reputational damage.
A comprehensive tenancy agreement is essential for both landlords and tenants in the UK’s private rented sector. The Assured Shorthold Tenancy (AST) is the most commonly used form of tenancy agreement, and it is important to ensure that it includes key elements such as the names of the landlord and tenant, rental amount, length of tenancy, rights and responsibilities of both parties, and maintenance of the property.
HMO tenancy agreements have specific differences that should be considered, such as the number of tenants, shared areas, and included bills. Even without a written agreement, tenants still have legal protections and rights. It is important to avoid using outdated or self-written ASTs, as they may not be legally binding and could lead to disputes and financial loss. Seeking legal or professional advice when drafting an AST ensures compliance with the latest legislation and provides a legally binding document that protects both parties.
Get in touch with us today if you need a specialised HMO Letting Agent to manage or let your HMO property in South London, or if you require expert HMO advice and consultation or if you want to purchase an up-to-date legally binding HMO Tenancy Agreement.