Please Note: This Article is 7 years old. This increases the likelihood that some or all of it's content is now outdated.

I am about to let my house for £30,000 pa, I understand that this has to be a bare contractual tenancy. Could someone tell me in what respects this differs from a standard AST. Would it give the tenant any extra rights?

This was the case until 1 October 2010, but since that date all residential tenancies, where the rent is below £100,000, on the day the changes came into force and subsequently, changed automatically into Assured Shorthold Tenancies.

There are two main consequences following on from this:

  • All landlords of existing tenancies who took a deposit prior to that date must protect it as per the Housing Act 2004 legislation. and
  • The procedure for evicting tenants will then become the procedure laid down in the Housing Act 1988, so landlords will need to serve a section 21 or section 8 notice first (not a Common Law Tenancy Notice to Quit as previously).
  • The forfeiture procedure, previously available to ‘common law’ landlords, as is still the case with commercial tenants, will no longer apply.

Common-Law Tenancies:

A residential letting at a rent amount greater than £100, 000 per year cannot be an Assured Shorthold Tenancy (AST) nor even an Standard Assured Tenancy (SAT).

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The Common-Law contractual tenancy is therefore implemented literally, with virtually no statutory overlay.

The only Acts that apply nevertheless are ones like:

a. the Protection from Eviction Act 1977;
b. s.11 of Landlord and Tenant Act 1985; and
c. the Notice provisions (Landlord’s name, address, etc.) of s.1/2/3 of LTA 1985 and s.47/48 of LTA 1987.

Other tenancies which come under the scope of Common Law (contractual tenancies) and are therefore excluded from statutory protection afforded by AST or SAT include:

Holiday Lettings – a holiday letting tenant has limited rights and is restricted to the duration of any stay.

Resident Landlords – where the tenant shares facilities (lodger) or where the tenant simply lives in the same building as the landlord (with separate facilities) he is a tenant with limited rights – sometimes known as “occupiers with basic protection.” If, however, the property is a purpose-built block of flats, where the landlord simply occupies one of the flats, then this would not be classed as a resident landlord situation – any tenancy would be an AST or SAT.

Tenancies at low or high rent – tenancies at no rent or very low rent – less than £250pa (£1000 London) or greater than £25 000.

Agricultural Tenancies – for land or buildings with more than 2 acres of land.

Crown Tenancies – generally tenancies created by government or government departments exclude AST or SAT statutory protection.

Educational Institution Tenancies – granted to students on specific courses of study.

Local Authority Tenancies – public sector tenants and those of housing associations (registered social landlords) have a greater degree of protection through what are known as “secure tenancies”. These were introduced by the Housing Act 1980 and 1985.

Business Tenancies – residential tenancies let by a company (i.e. a company is the landlord to an individual private tenant) are outside the protection of the Housing Acts – AST or SAT. Business Tenancies however – a tenancy let for business use such as a shop, offices or factory – have a degree of statutory protection under the Landlord & Tenant Act 1954 part 2, unless the landlord and tenant agree at the outset to exclude these provisions, in which case the tenancy is a purely contractual common law tenancy.

Licensed Premises Tenancies – resident landlords of licensed premises are excluded from the statutory protection of the Housing Acts.

Please Note: This Article is 7 years old. This increases the likelihood that some or all of it's content is now outdated.
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