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How to Create an Assured Shorthold Tenancy Agreement

Landlords and agents can use an assured shorthold tenancy (AST) agreement to create a tenancy for residential property that provides the highest level of security and protection available for the landlord. Once the document is completed, it can be saved and amended for additional tenancies in the future.

Requirements of an Assured Shorthold Tenancy

The following requirements apply to an AST:

  • The landlord is a private party
  • The property is the tenant's main accommodation
  • The landlord does not live at the property
  • The rent is not more than £100,000 per annum
  • The rent is not less than £250 per annum, or £1,000 in London
  • The tenancy is not a holiday let
  • The tenancy is not a business tenancy or a tenancy of a licensed premises

If all of the above conditions are not met, then an assured shorthold tenancy is not appropriate for your situation.

Completing the Assured Shorthold Tenancy Agreement

Once the document has been completed, ensure that all the information is correct. This includes the rent price, tenants' names and notice address. It is best to print two copies: one for the landlord's records and the other for the tenants'. Before presenting the assured shorthold tenancy agreement to the tenant(s), ensure that the landlord is completely satisfied to proceed with the tenancy.

Presenting documents to the tenant(s) or allowing them to sign the agreement can be construed as intention to form a tenancy through course of dealings. If the landlord is happy to proceed, then present the tenant(s) with both copies of the agreement to sign. Once the tenant(s) have signed, the landlord should sign and return a copy to the tenant(s).

The assured shorthold tenancy agreement allows the user to include additional binding terms and conditions that the parties have agreed upon. This helps you further customise your agreement according to the wishes of the parties, and these terms will be compiled into an addendum.

The uses can vary widely, but some examples are additional decorative works, additional furniture, repairs before move-in or gardener services. If you included additional terms, both parties will need to sign the addendum as well. Any additional covenants within the addendum must fully comply with any governing law, whether or not the parties want to include them. For example, the landlord cannot relieve himself of repair obligations or the duty to perform annual gas safety checks.

When the last party signs the contract, the area on the first page marked 'Dated' should be filled in by hand with the date of the last party's signature. This shows the date on which the contract became effective. Even if the tenancy does not start until later, the contract is still binding from that day.

Important Notes

If the tenancy is subject to a guarantor being in place, it is crucial that the guarantor signs a Deed of Guarantee before the tenant(s) sign the tenancy agreement.

For deposit protection reasons, it is always advisable to have a third-party inventory conducted before the start of a tenancy. Upon commencement of the tenancy, the tenant(s) should be provided with copies of the inventory and the current gas safety certificate.

This document is only for use in England and Wales.