What is the difference between an AST & Common Law rental contract?

To put it bluntly – an awful lot!

There are 2 types of rental contract used in the UK, one contract – the AST (Assured Shorthold Tenancy) covers tenancies that fall under the legislation of the Housing Act 1988 as defined by section 19A (all very technical I know!) the other, less commonly used contract is a Non Housing Act Tenancy or Common Law Tenancy which is used for tenancies that fall outside of the Housing Act.

There are various reasons why a Non Housing Act contract would be used, the most common reasons are -

  • Where a company is the tenant.

  • Where the annual rent is over £100,000

  • Where the property is not the tenants main and principal home.

Both contracts tend to include the majority of the same clauses, most clauses included within the contract are the same, once of the biggest differences relates to the deposit.

Under the laws of the Housing Act a tenants deposit must be protected by a regulated scheme, this can be either a custodial scheme where the deposit is registered with a scheme by the agent or landlord and they send the money to that scheme for them to hold, or an insured scheme where the agent or landlord holds the money but still needs to register the deposit. There are numerous clauses in an AST contract that relate to the process of returning a deposit at the end of a tenancy.

When using a non AST contract the law is quite different, there is no legal requirement for the deposit to be protected under any scheme, the agent or the landlord can hold the money until the end of the tenancy and then it is down to the agent/landlord/tenant to discuss the return of the deposit.

For further info on the differences between the two contracts get in touch!