This briefing note highlights some issues that a landlord should consider when granting an Assured Shorthold Tenancy (ASTs) to a potential tenant in a school dwelling, for example a former caretakers house and the tenancy is not linked to the tenant’s employment with the Academy Trust or School.
What is an AST?
An AST is a form of assured tenancy that allows the landlord to let out a property whilst retaining the right to repossess the property at the end of a set term. ASTs only apply in England. From 1 December 2022 ASTs can no longer exist in Wales.
An AST does not have to be in writing (except for when it is for a fixed term of more than three years) however we would always advise that a written AST be put in place. An AST must be granted to an individual or individuals, and the property must be occupied as the tenant’s only or principal home.
Deposit
It is advisable to take a deposit from the tenant in advance. The deposit must be paid into a Tenancy Deposit Scheme (TDS) promptly and you must provide the tenant (or, where relevant, the person who has paid the deposit on the tenant’s behalf) with prescribed information about the TDS within 30 days from receipt of the deposit.
Items to Provide
There are many things a landlord must provide to a tenant before an AST can be granted and these are as follows:
- Energy Performance Certificate – this must be provided to the Tenant free of charge
- Gas Safety Certificate – all gas appliances and flues must be checked by an engineer registered with the Gas Safety Register at least every 12 months. A copy of the safety certificate must be provided to the tenant before they move in.
- How to Rent Guide – a copy of the booklet DCLG: How to Rent: The checklist for renting in England also known as the ‘How to Rent Guide’ must be provided to the tenant. This publication is updated and reissued in January of each year.
It is very important that the above be provided to the tenant as failure to do so can prevent you from serving a notice to seek possession of the property.
Other Points to Consider
Before granting the AST there are several other things a landlord needs to consider and should be organising to ensure that the letting can proceed without delay and that your property is compliant for your new tenant:
Equality Act 2010
You should be aware of your obligations under the Act to avoid any discrimination. For example, no DSS letting bans operated by landlords are unlawful.
Right to Rent
You must check the tenant’s immigration status under the right to rent scheme to ensure they have the right to occupy the property before renting it to them. Failure to do this could lead to a civil penalty of up to £3,000.
References
You should obtain references for the tenant, and evidence of their employment or ability to pay the rent.
House in Multiple Occupation (HMO)
You should check whether your property may be considered an HMO and if a HMO licence is needed.
Smoke and Carbon Monoxide Alarms
Smoke alarms need to be installed on each story of the property that is used wholly or partly as living accommodation.
Carbon monoxide alarms must be installed in any room that is used wholly or partly as living accommodation and that contains a gas appliance.
The alarms will need to be tested and you will need to ensure these are in proper working order on the day the tenancy begins
Electrical Equipment
You must ensure that all electrical equipment is safe. Since 1 July 2020 there is an obligation on the landlord to provide an electrical inspection report for fixed electrical parts (such as the wiring, plug sockets, light fittings and fuse box).
The Electrical Safety England Regulations require landlords to ensure that the electrical safety standards in the 2018 edition of the Institution of Engineering and Technology (IET) Wiring Regulations (BS 7671) are met whenever those premises are occupied under a tenancy.
Government guidance recommends that a landlord regularly carries out portable appliance testing (PAT) on any electrical appliances provided and that the tenant is supplied with a record of any electrical inspections carried out.
Asbestos
Asbestos Regulations should be complied with in respect of the common parts used for access, circulation and storage (for example, the entrance lobby, staircase, roof space, communal yards, gardens, store rooms, outbuildings, garages and parking spaces).
Fire Safety
You will need to ensure that any furniture that you provide has a manufacturer’s label stating that the furniture meets the fire resistance requirements.
Although the Regulatory Reform (Fire Safety) Order 2005 does not tend to cover domestic premises it does apply to the communal parts of residential properties, being those parts of the premises that are (or could be) used by the occupants of more than one dwelling.
Terms of the AST
This briefing note does not address the individual terms of the AST agreement but there are a few general points to consider as follows:
Term of the AST
Is there to be a a fixed term or a contractual periodic tenancy that will run indefinitely from one period to another?
If there is a fixed term and you allow the tenant to remain in the property after the initial fixed term, you can either agree a new tenancy for a further fixed term, or you can let the tenancy run on as a statutory periodic tenancy. If a statutory periodic tenancy arises, the period will depend on when the rent is paid. For example, if the rent is paid monthly, the tenancy will be a monthly periodic tenancy.
Inventory
An inventory is a list of all the furniture, fixtures and fittings in the property. The inventory should indicate the condition of the items that it lists. The schedule of condition will note the decorative order and cleanliness of each room. The agreement requires the tenant to keep the property and contents in the same state of repair as is detailed in the inventory and schedule of condition.
The inventory and schedule of condition will be used to prove the condition of the property and contents at the start of the tenancy in the event of a dispute about their condition when the tenancy ends. The inventory and schedule of condition should therefore be as comprehensive as possible. It is becoming increasingly common to use a professional inventory clerk. A list of registered inventory clerks is available from the Association of Independent Inventory Clerks
Insurance
Normally, the landlord will insure the property. The tenant should arrange insurance for the tenant’s own possessions.
Repairing Obligations
Regardless of what the AST may say, under the Landlord and Tenant Act 1985 you as the landlord will be responsible for repairing the structure and exterior of the property; the installations for the supply of water, gas, electricity and sanitation; and space heating and heating water.
Under the Homes (Fitness for Human Habitation) Act 2018, you as the landlord are responsible for ensuring that the property is fit for human habitation at the start of the tenancy and remains fit for human habitation during the tenancy.
Utilities
These are generally the tenant’s responsibility to pay for.
Permitted and Prohibited payments
The AST only requires the tenant to pay for matters that are permitted under the Tenant Fees Act 2019. An example of prohibited payments are as follows: viewing fees; credit-check fees; inventory check fees; check-out fees; fees for professional cleaning services.
Charities Act 2011 considerations and Secretary of State Consent
If the landlord is a non-exempt charity, such as a Diocese, prior to granting the AST the charity must obtain and consider advice from an appropriate person to satisfy the requirements under the Charities Act 2011. This does not need to be from a qualified surveyor (however in practice a surveyor may be the best type of person to advise the charity) but essentially the charity must be able to decide that they are satisfied (after considering the advice) that the terms of the AST (including the rent) are the best that could be reasonably obtained for the charity.
If the landlord is an Academy Trust, then they will be required to obtain the Secretary of State consent prior to granting the AST as required under the Academy Trust Handbook.
How we can help
Our specialist property team in our Education Department have experience with consulting on and preparing ASTs. The team are familiar with the regulatory requirements and can advise on the implications of these. They can assist with the entire process, by providing advice on the legal requirements (including as mentioned above under the Charities Act 2011) and preparing and finalising the AST.
For further information, please contact:
Andrea Squires, Head of Department and Partner, on 0207 593 5039 or asquires@wslaw.co.uk, Zahraa Ilmass, Senior Associate, on 0203 735 1939 or zilmass@wslaw.co.uk, Sonia Din, Associate, on 020 7593 0326 or sdin@wslaw.co.uk