Assured Shorthold Agreements
First introduced in 1997, an assured shorthold agreement is a formal rental, or "letting," contract between a landlord and a tenant. Typically used for the renting of residential properties, the agreement is popular in British countries where property owners and tenants agree on a fixed sum for a fixed period. According to the Tenancy Agreement Service in the U.K., parties to the contract also refer to the agreement in short as an AST (assured shorthold tenancy) or just "shorthold tenancy."
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The Housing Act of 1988
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Revised in 1996, the statute defines the relationship between a landlord and a tenant by establishing three conditions. First, the property must represent separate housing. Second, it must represent a primary dwelling. Last, the tenant of the property must be an individual.
Time Frame
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Assured shorthold agreements have an initial fixed period of six months. However, tenants can arrange for a longer agreement to extend the initial period to 12 months.
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Exceptions
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The landlord cannot use the agreement to lock tenants into a high rental rate, such as 25,000 pounds per year, or use the agreement to charge a tenant a low rent. The statute does not allow landlords to let property as a holiday home or while they are still living in or on it. Landlords cannot rent property to a private company, and they cannot rent any property owned by the monarchy (the Crown).
Types and Benefits
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There are three types of letting agreements: assured shorthold tenancy, assured tenancy and regulated tenancy. Of the three, the first one allows the landlord to evict and seek legal repossession of the property after the initial period; the landlord reserves the right not to renew the lease. On the other hand, the assured tenancy agreement allows the tenant to stay in the property beyond the fixed period until the court issues a repossession order in favor of the landlord; this gives the tenant more time.
Notice of Intent
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At the end of the initial fixed period, a landlord can issue a notice of intent to increase the rent with both the assured shorthold tenancy and the assured tenancy. The landlord must give at least a one-month notice, which the statute considers as a "one rental period." In reference to all three types of agreements, the statute affords the tenant more protection under the regulated tenancy agreement.
Right of Repossession
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The Housing Act of 1988 statute permits the landlord to increase the rent after the initial period and the tenant to challenge the rent increase. However, in the case of the assured shorthold agreement, the landlord has the right to evict the tenant if the latter does not agree to the increase.
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References
Resources
- Tenancy Agreement Service: Assured Shorthold Tenancy Rights
- Tenancy Agreement Service: Ending Tenancy Agreements
- Tenancy Agreement Service: Landlord's Notice to Quit
- Tenancy Agreement Service: Landlord's Notice during Fixed Term
- Tenancy Agreement Service: Rent Increases and Notice
- Revised Statutes: Landlord and Tenant Act of 1985
- Photo Credit apartment for rent image by dead_account from Fotolia.com
