This is a brief guide to setting up an Assured Shorthold Tenancy and some of the most frequently asked questions. If you require information about different types of tenancy or topics not covered in this brief guide, you are advised to seek independent legal advice or seek advice from a national Landlords Association or reputable Letting Agent
Changes brought in by the Housing Act 1996 mean that for tenancies starting on or after the 28th February 1997, there is no special procedure for creating an Assured Shorthold Tenancy, a new tenancy will automatically be a shorthold tenancy.
It is normal practice for an assured shorthold tenancy to be set up on a 6 month or 12 month basis. You do not have to agree a fixed initial term, however, the tenant has the right to stay in the property for a minimum period of 6 months. This means that you do not have a guaranteed right to possession of the property if the tenant refuses to leave within the first 6 months of the tenancy unless there are grounds such as rent arrears or prior notice grounds which were notified at the start of the tenancy.
This is only required by law for fixed term tenancies of greater than 3 years, however it is advised to have a written tenancy agreement as it will make it easier to sort out any disagreements which may arise later, and if necessary to evict the tenant. You cannot use the accelerated possession procedure in County Court unless you have a written tenancy agreement.
Standard tenancy agreements are available from Law stationers and larger general stationers. You can draw up your own agreement, although this is not advisable unless you seek legal advice. If you write your own agreement you must make sure the terms are fair and do not conflict with the duties on Landlords imposed by legislation which will automatically override what you agree with your tenant. In any case, prospective tenant should be given the opportunity to read and understand the terms of the tenancy agreement, before becoming bound by them.
You may ask the tenant to pay a deposit before moving into your property to act as security in case he or she leaves the property owing rent or to pay for any damage or unpaid household bills at the end of the tenancy. However you must register the bond with a Tenancy Deposit Scheme. From the 6th April 2007 new provisions contained in the Housing Act 2004 make it a requirement for any landlord who wishes to take a monetary deposit or bond at the start of an Assured Shorthold Tenancy, to safeguard that deposit in a Tenancy Deposit Scheme (TDS). For further information, see the Tenancy Deposit Schemes page.
You are only legally obliged to provide a rent book if the rent is payable on a weekly basis. However, you should keep a record of rent payments or provide receipts for rent paid to avoid disagreements later. Standard rent books for assured and assured shorthold tenancies are available from law stationers and larger general stationers.
Letting Agents and some Estate Agents will find tenants for you and start up the tenancy. Some will also collect the rent and provide a full management service so that you will not have to deal directly with tenants yourself at all. They will charge a fee for their services. It is always wise to choose an Agent who is a member of the Royal Institute of Chartered Surveyors, the Association of Residential Letting Agents, the Incorporated Society of Valuers and Auctioneers or the National Association of Estate Agents as they are required to operate to national standards recognised by these organisations.
