Assured Shorthold Tenancies - Increase In Annual Rent

At present, if the annual rent of a residential tenancy is more than £25,000 per annum then it cannot be an assured shorthold tenancy. However, with effect from 1 October 2010, any residential tenancy where the rent is less than £100,000 per annum will be converted into an assured shorthold tenancy. The change is not retrospective, however, it will affect all tenancies already in existence as at 1 October. Accordingly, if a tenancy started before 1 October for rent of more than £25,000 per annum but less than £100,000 per annum it will automatically convert to an assured shorthold tenancy on 1 October. Most residential landlords will be aware that tenancy deposits for assured shorthold tenancies have to be protected under a tenancy deposit scheme within 14 days of receipt. This will mean that any tenancies that convert to assured shorthold tenancies on 1 October will have had deposits taken on them prior to that date which may not have been protected under a tenancy deposit scheme within 14 days of receipt. It is arguable that the deposits will not need to be protected since, at the date they were taken, protection was not acquired. However, on renewal, the money will need to be protected. The government has announced that it is their present view that existing tenancies that become assured shorthold tenancies will have to protect rent deposits as at 1 October. This would mean that landlords of existing tenancies that become assured shorthold tenancies on that date will need to consider protecting rent deposits before 1 October. Mortgage Repossessions (Protection of Tenants) Act approved by Parliament Recently, the Mortgage Repossessions (Protection of Tenants) Act 2010 was approved by Parliament. This Act gives protection to tenants who find themselves being evicted by the landlord's mortgagee (where the landlord has failed to get proper consent for the let). In summary, the Act gives the Court power to suspend an Order for possession by up to two months. Tenants should note that the right to suspend can only be exercised once. It will also apply to all tenancies under the Housing Act 1988 or Rents Act 1977, so will cover assured shorthold tenancies. As yet, however, the Act is not in force. For further information, please contact Liz Shaw on 0114 266 6660 or email [email protected]