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View Full Version : Is AST time limited



diwarren
13-09-2006, 16:15 PM
We have had a couple living in our granny flat under a 6 month shorthold tenancy for 6.5 years, we are happy with them as tenants but we have been told that an AST cannot go on for more than 7 years. Is this information correct as I am unable to find anything to confirm it. We are rather afraid of going to an assurred tenancy with its difficulty to remove should things go wrong in the future. Di

welshgold
13-09-2006, 16:27 PM
We have had a couple living in our granny flat under a 6 month shorthold tenancy for 6.5 years, we are happy with them as tenants but we have been told that an AST cannot go on for more than 7 years. Is this information correct as I am unable to find anything to confirm it. We are rather afraid of going to an assurred tenancy with its difficulty to remove should things go wrong in the future. Di

well i have never heard this story before, and as i have had many tenants for more than 10 years still on original 6 month assured shorthold tenancy agreeement, i would be shocked if this was true.

MrShed
13-09-2006, 21:03 PM
It isn't true as far as I know...the only issue I know about long AST's, and even then it only applies to long FIXED TERM AST's, is a potential issue with stamp duty.

PaulF
15-09-2006, 08:11 AM
The initial fixed term should always be 3 years or fewer otherwise it would have to be executed as a deed (that's not a problem by the way).
It can exist for as long as you want it to on a periodic tenancy as there is no time limit.
If you wanted to offer somebody a long-term tenancy then you should execute a tenancy at common law (by deed), when you can make the tenant responsible for all internal and external repairs (and "put and keep in repair" clauses) provided it is in excess of 7 years fixed term.
Stamp Duty is charged on the whole of the amount paid to the landlord by the tenant so periodic tenancies are not exempt! Once rent of (currently) £125,000 has been paid over in continuity of any tenancy then stamp duty becomes payable by the tenant, but this would take several years normally, and at least 5 under any AST.

jeffrey
06-07-2007, 15:10 PM
I just found this old thread.
Besides previous comments re need for formal Deed and incidence of SDLT, there is a pitfall for T taking a longer-than-seven years tenancy. The legal interest which it creates is VOID unless T registers it (at HMLR) as a lease.
In due course, HMG intends to reduce this seven-year rule to three years (to match the "Deed" point).

attilathelandlord
06-07-2007, 19:30 PM
And most lenders insist on 12 months max. AST.