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Assured shorthold tenancy, and the difference between an assured shorthold and assured tenancy. The background behind the creation of this type of tenancy, and an explanation of fixed-term and periodic tenancies.

Assured shorthold and assured tenancies

An assured shorthold tenancy is a type of assured tenancy, so all the requirements of an assured tenancy apply (see the section on Assured tenancies for more information). An assured tenancy can be assured shorthold if it was created on or after 15 January 1989.

Other requirements for assured shorthold tenancies apply depending on whether the tenancy was created between 15 January 1989 and 27 February 1997, or after 27 February 1997 - see the sections on Tenancies created 15/1/89 to 27/2/97 and Tenancies created after 27/2/97.

The principal difference between an assured shorthold tenancy and an assured tenancy is the limited security of tenure an assured shorthold offers the tenant. The landlord can regain possession of an assured shorthold tenancy without giving any specific reason if s/he follows the correct procedure (see the section Ending an assured shorthold tenancy for more information).

Background

The assured shorthold tenancy was introduced by the Housing Act 1988. It brought together the two aims of those who wished to see the deregulation of the private rented sector, being market rents with limited rent control, and an automatic right to possession for the landlord.

The use of the assured shorthold tenancy was extended by the Housing Act 1996. Originally, under the Housing Act 1988, a tenancy was an assured tenancy unless an assured shorthold tenancy was specifically created. Under the Housing Act 1996, this was reversed so a tenancy is automatically an assured shorthold tenancy unless an assured tenancy is specifically created.

Fixed term or periodic

Assured shorthold tenancies can be either fixed term or periodic. It is essential to find out whether a tenancy is fixed term or periodic in order to determine how that tenancy can be brought to an end by the landlord or tenant.

What is a fixed-term tenancy?

A fixed-term tenancy runs for a specific period of time, eg six or 12 months, and will have a clearly ascertainable start and an end date.[1] If a tenancy does not have a fixed term, it will be a periodic tenancy. A fixed term of at least six months was a requirement for the creation of an assured shorthold tenancy created before 27 February 1997.

Fixed-term of more than three years

It is a requirement that a tenancy with a fixed-term of more than three years must be made by deed (ie the contract must say it is a deed and the signatures of the landlord and tenant must be witnessed). However, this does not apply to assured shorthold tenancies of this duration if granted by a private registered provider of social housing on or after 1 April 2012 – except when they are either long leases (granted for 21 years or more) or shared ownership properties.[2]

Where a fixed-term tenancy of more than three years is not executed by deed, the tenancy takes effect as a fixed-term equitable lease.[3]

What is a periodic tenancy?

A periodic tenancy does not have an end date and can continue indefinitely. It runs from period to period, eg month-to-month or week-to-week (or for another specified length of period).

There are two forms of periodic tenancy:

  • those which are periodic from the outset (ie without a fixed term; this can only apply to tenancies created on or after 28 February 1997)
  • those which become periodic following the end of a fixed term.

When a fixed term ends and the tenancy continues, the tenancy becomes 'statutory periodic' on the next day[4] unless:

  • a new fixed term is created, or
  • there is a clause in the original fixed term agreement stating that the tenancy will become periodic on expiry of the fixed term (this will create a 'contractual periodic tenancy').

The landlord and tenant can agree a new fixed term at any time. See the section on Rights to remain on expiry of fixed term for more information.

There are different rules on ending a tenancy depending on whether it is fixed term or periodic. This is explained in detail in the section on Ending an assured shorthold tenancy.

Wales

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] Nicolls v Kinsey [1994] 16 Estates Gazette 145, on what constitutes a fixed term: a tenancy granted 'for one year and thereafter from year to year' was not a fixed term.

[2] s.52 Law of Property Act 1925, as amended by s.156 Localism Act 2011.

[3] Walsh v Lonsdale (1882) 21 Ch. D. 9; R v Tower Hamlets LBC ex p. Von Goetz (1999) 31 H.L.R. 669, CA.

[4] s.5(2) Housing Act 1988.

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