Frequently asked questions about the raising of the annual rental threshold for assured and assured shorthold tenancies, effective 1 October 2010.
The Statutory Instrument raising the annual rental threshold for assured, including assured shorthold tenancies to £100,000, The Assured Tenancies (Amendment) (England) Order 2010 - SI 2010 No. 908 was laid on 25 March 2010 and the change will come into effect on 1 October 2010.
This will give landlords the opportunity to prepare for the change.
Tenants will have the benefits of the protection of the Housing Act 1988. In particular, new tenants will have the benefit of tenancy deposit protection.
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.
Landlords with existing common law tenancies which will become Assured Shorthold Tenancies when the rental threshold is increased, will not need to protect their tenants' deposits in a recognised scheme immediately, although we would recommend that it is good practice to do so. They will, however, need to protect the deposit if the tenancy is renewed on or after 1 October, or if a new deposit is taken. We do not consider that deposits taken before 1 October will need to be protected, as these were not taken in connection with a shorthold tenancy and therefore do not meet the criteria for protection specified in the Housing Act 2004. Ultimately, however, it is for the courts to decide when deposits should be protected and we are unable to give a definitive interpretation of the legislation, or speculate on how the courts might find in any particular case.
Letting agents should check their existing tenancies, including those managed on a "let-only" basis and ensure that landlords are aware of the change and its implications. Existing contracts may need to be reviewed and varied to accommodate the change to an Assured Shorthold Tenancy.
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