Requirements of an assured shorthold tenancy created between 15 January 1989 and 27 February 1997

The default tenancy for a private landlord or a private registered provider of social housing (formerly a registered social landlord) between these dates was an assured tenancy, but an assured shorthold tenancy was created if it met the requirements of an assured tenancy and if it met the three conditions listed.[1]

The tenancy must have a fixed term of at least six months; there is no limit on the maximum length of a fixed term. The fixed term can start on or after the day on which the tenancy agreement is signed and the pre-tenancy notice is served.[2]

If the tenancy agreement states that the tenancy started on an earlier date than the date it was actually agreed, then the length of the fixed term will be counted from the date of the actual agreement.[3]

The agreement must not contain a break clause allowing the landlord to end it earlier than six months after the start of the tenancy. If the agreement contains such a clause, the tenancy will not be an assured shorthold. Rather, it will be a fixed-term assured tenancy, as long as the conditions for assured status are met. An assured shorthold tenancy will not be invalidated, however, if the agreement contains a break clause that can be exercised by the tenant only.

The landlord can gain possession during the first six months of an assured shorthold tenancy, but only if they can prove one of the grounds stated under the Housing Act 1988 as applicable during the fixed term, and where the terms of the tenancy contain a provision for the tenancy to be terminated on the ground in question.

Often this provision takes the form of a 'forfeiture clause' in the agreement. This clause is different from a break clause because, rather than allowing the landlord to give notice in any circumstances, it is only available where there has been a breach of one of the terms of the tenancy mentioned in the clause. A forfeiture clause does not alter the fact that the landlord needs a court order to gain lawful possession. The grounds for possession that can be used during a fixed term are the same as those available for fixed-term assured tenancies.

An assured shorthold tenancy is valid if it contains a landlord's break clause that can only be operated after the initial six-month period has ended, or where a new fixed term is agreed after the end of the original fixed term, and the new fixed term contains a break clause.

The landlord (or one of joint landlords) must have served on the tenant a notice, in a prescribed form,[4] stating that the tenancy is to be an assured shorthold, before the tenancy commences. This notice is sometimes referred to as a 'section 20 notice'. The court has no power to waive the requirement to serve this notice. If a correct notice has not been served then the tenancy is assured. Service of the notice can be on the tenant's agent.[5]

Validity of section 20 notices not in the prescribed form

The notice must have been in the correct form[6] or 'substantially to the same effect'. The meaning of this phrase has been the subject of much litigation, but the Court of Appeal has developed guidance to assessing the validity of a pre-tenancy notice.[7] It is necessary to look at the purpose of a section 20 notice, which is to tell a tenant that the tenancy is to be an assured shorthold and to suggest that they might want to take legal advice before entering into the tenancy. Even if a notice has a technical defect, it will still be valid if it clearly 'informs the proposed tenant of the special nature of an assured shorthold tenancy' and they would not misled by it.[8]

Invalid notices

In the following cases the courts found that the notice was invalid and resulted in an assured tenancy:

• a notice which failed to provide the prescribed information about the tenant's rights[9]

• a notice which referred to the tenancy as being for six months when the actual contract was for one year[10]

• a notice which was given prior to the start of a tenancy, where the start date of the tenancy was subsequently changed without a new section 20 notice being issued[11]

Valid notices

In the following cases the courts decided that the notice was valid in spite of errors, and therefore assured shorthold tenancies had been created:

• a notice that had the correct start date but the wrong end date: the court held that a notice is valid even if it contains a minor mistake when in the context it informs a reasonably-minded person on how the notice is to operate[12]

• a notice that had the termination date with the wrong year and omitted a prescribed note concerning council tax in relation to rent assessment: the court held that the wrong date was merely a clerical error[13]

• a notice that gave a commencement date for the tenancy which was earlier than the date on which the tenancy had in fact been granted[14]

• a notice where the expiry date of the tenancy was out by one month[15]

• a notice where parts of the text of the notice differed from the wording of the prescribed form[16]

An assured shorthold tenancy is a type of assured tenancy, so tenancies that cannot be assured equally cannot be assured shorthold.

Agreements replacing assured tenancies

Where a landlord granted a new agreement and complied with section 20 requirements in relation to the new agreement, the new tenancy would remain fully assured if:[17]

• the new agreement was granted to someone who was an assured tenant immediately beforehand (or, in the case of a joint assured tenancy, to at least one of the previously joint assured tenants), and

• the landlord remained the same

This would apply even if the premises in question were different, as long as there was no gap in time between the tenancies.

Where, in the circumstances above, the new agreement was granted on or after 28 February 1997, see Tenancies created after 27/02/97.

New joint tenant and failure to meet shorthold requirements

A joint tenancy which was originally an assured shorthold will cease to be assured shorthold where one of the joint tenants left and was replaced by another, and the landlord granted a new joint tenancy before 28 February 1997 but failed to fulfil the requirements of an assured shorthold tenancy to have a fixed term of at least six months, no break clause in the first six months, and a pre-tenancy notice.

In this case the tenancy would be an assured tenancy. If a new joint tenancy is created on or after 28 February 1997, this loophole no longer applies.

Agreement to create assured tenancy

A tenancy will also no longer be an assured shorthold tenancy if the landlord and the tenant agree to create an assured tenancy on expiry of the assured shorthold. In order to do this the landlord, or one of the landlords where there are joint landlords, must give the tenant written notice that the new tenancy is not an assured shorthold.[18]