When letting a property, you may be wondering what type of tenancy agreement to proceed with, and most commonly, the right answer is an Assured Shorthold Tenancy (AST). However, there are some circumstances, when these types of agreements are either not possible, or appropriate. 

Overview of ASTs

An AST is a type of tenancy agreement that gives a landlord the right to repossess their property at the end of the fixed term, subject to certain legal requirements. An AST can be for a fixed term of up to 7 years, but most are for 6 or 12 months. The tenant has the right to stay in the property for the fixed term, as long as they comply with the terms of the tenancy agreement, pay the rent and take care of the property.

An AST can be created by giving the tenant a written notice that specifies the key terms of the agreement, such as the rent, the length of the term, and any other obligations or restrictions. The notice must be given before the tenancy starts or within 28 days of the start, alongside other prescribed information. 

Tenancies that Cannot Be an AST

Not all tenancies can be an AST. In particular, the following tenancies are excluded:

Rent over £100,000 per year

If the rent for the property is over £100,000 per year, the tenancy cannot be an AST. This is because ASTs are subject to a maximum rent limit, which is currently £100,000 per year.

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Holiday lets

If the property is let for holiday purposes, the tenancy cannot be an AST. This is because ASTs are intended for residential purposes only, not for short-term stays.

Company lets

If the tenant is a company, rather than an individual, the tenancy cannot be an AST. This is because ASTs are only available to individuals who will live in the property as their main home.

Tenancies created before 15 January 1989

If the tenancy was created before 15 January 1989, it cannot be an AST. This is because ASTs were introduced by the Housing Act 1988, which came into force on that date.

Rent Act tenancies

If the tenant has a Rent Act tenancy, they cannot be an AST. Rent Act tenancies are a type of protected tenancy that existed before the introduction of ASTs. Rent Act tenancies have different rules and protections than ASTs, and they can only be terminated in certain circumstances.

Conclusion

In summary, not all tenancies can be an Assured Shorthold Tenancy. Landlords should be aware of the circumstances where an AST is not appropriate, and should seek legal advice if they are unsure. By following the correct procedures and using the right tenancy agreement, landlords can avoid costly mistakes and ensure that their properties are let in a legally compliant and effective manner.

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