AST with effect from 1 October 2010 
AST is most popular form of tenancy agreement in letting residential property. The Government has increased the AST rent threshold from 25 K per annum to 100 K per annum with effect from 1 October 2010. The legislation does not provide for any transitional arrangements. It is not ‘retrospective’ as such, but will affect all existing and new tenancies from 1 October. All the existing tenancies or the tenancies created on or after 1 October 2010 whose annual rent is below 100 will be deemed as AST if the tenancy meets the remaining criteria for ASTs. If the rent is excess of 100K, this will amount to Non AST.
AST offers a better extent of security to tenant than that offered by common law tenancy. Deposits for new tenancies starting after 1 October with rents within the new threshold will need to be protected with one of the three government-approved tenancy deposit schemes. Landlords will also need to comply with the full legal framework associated with assured shorthold tenancies. This includes having the option of using accelerated Court procedures for possession. They will also be able to use ‘off-the-shelf’ tenancy agreements. In addition, they will have to follow the procedures in the Housing Act 1988 when proposing rent increases.
A tenancy cannot be an AST if:
- it began – or was agreed – before 15 January 1989
- the rent is more than £100,000 - this is then a bare contractual tenancy
- it is rent free
- the rent is less than £250 a year – or less than £1,000 in London
- it is a business tenancy or tenancy of licensed premises
- it is a holiday let
- the landlord is a local authority
Relevant resources: tenancy deposit scheme | tenancy agreement | tenancy agreement template
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