As you may know, there is a change in the threshold limit for Assured Shorthold Tenancy (AST) rents commencing on 1st October 2010. Previously, legislation associated with the Housing Act 1998 stated that all tenancies with an annual rent of over £25,000 could not be AST’s. These tenancies were agreed on a contractual basis and the tenancy terms were agreed by the landlord and the tenant and were not enshrined by statue.
What does this mean for you?
Well, all new tenancies formed with aggregate rents of £25,000 to £100,000 pa will default to AST status, and any tenancy with annual rent between £25,000 and £100,000 in existence on 1st October 2010 will become an AST overnight (Provided that there are no relevant exemptions) Landlords & Tenants will no longer be able to negotiate individual terms in relation to their tenancy. In short this means that all rights associated with the Housing Act 1988 will be extended to cover rentals up to £100,000pa.
One major impact this has for landlord is that they must now protect their tenants deposit with a government approved scheme. Any landlords that do not will be in breach of TDP (Tenancy Deposit Protection) Legislation.