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9 July 2010 0 Comments
Posted in Opinion, Real Estate

‘Landlords and tenants: Changes to the Assured Shorthold Rent Threshold’

Author headshot image Posted by , Partner

Following the Assured Tenancies (Amendment) (England) Order 2010 the rent threshold for Assured Shorthold tenancies (“ASTs”) will increase from £25,000 to £100,000. This will take effect from the 1st October 2010.

Currently all tenancies with an annual rent of over £25,000 are not ASTs and therefore are not afforded the protection of the Housing Act 1988. Upon the expiry of the contractual term of the tenancy, the landlord can issue standard possession proceedings to obtain vacant possession. In addition, any deposit paid to the landlord is not required to be placed into a Tenancy Deposit Scheme (“TDS”).

Under the new rules, all tenancies with annual rents of upto £100,000 will now be ASTs. This will also apply to residential tenancies granted prior to the 1 October 2010 which meet the other requirements of an AST.

Landlords should make the necessary arrangements to protect any deposits they hold that now need to be within the TDS scheme. In addition, they will need comply with the notice provisions under the Housing Act 1988 when seeking possession of the property. Likewise tenants need to be aware of the change so as to ensure that they are afforded the maximum protection possible in relation to their tenancy and any deposit paid.

The consequences for landlords are that there may be a delay in obtaining possession due to having to comply with section 8 or section 21 of the Housing Act 1988 and the various notice requirements.

For more details please contact me or anyone in the Property Dispute Resolution Department.

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