Statutory v Contractual Periodic Tenancy: what to issue?

by Readers Question

10:21 AM, 16th December 2020
About 5 months ago

Statutory v Contractual Periodic Tenancy: what to issue?

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Statutory v Contractual Periodic Tenancy: what to issue?

Despite having been a landlord for over 20 years, I only became aware yesterday of the existence of contractual periodic tenancies, as opposed to statutory periodic tenancies! I am now rather worried about this; when one of our fixed-term tenancies has come to an end I have – in good faith – been telling our tenants that their tenancy has now become a statutory periodic tenancy, and issued them with an updated Deposit Protection Certificate.

However, having read up on the difference between the two types of periodic tenancy, I am wondering if I should also have been sending them the most recent ‘How to Rent’ guide, and perhaps all the other paperwork associated with the start of a tenancy (EPC, Gas Safety Cert, etc), exactly as though it was a brand-new tenancy? Can anyone clarify this for me?

And if I assume I definitely should have re-issued the ‘How to Rent’ guide, could I retrieve the situation by sending the new version to all our tenants now? (We have one tenant where we may wish to issue a Section 21 notice in the next month or so, hence my worry about this!)

Many thanks

Annabel

Comments

Prakash Tanna

11:37 AM, 16th December 2020
About 5 months ago

Have you checked the terms in your AST to see if there is a clause which states what happens when the fixed term comes to an end? The NRLA contract I use states it will become a contractual periodic tenancy which is better as it prevents you from being made liable for Council Tax payments should a tenant abscond or leave without notice until you 'legally' regain possession.

Annabel Blake

13:54 PM, 16th December 2020
About 5 months ago

Reply to the comment left by Prakash Tanna at 16/12/2020 - 11:37
Thanks for your reply. Unfortunately, I normally use a local letting agent to provide a Tenant-Find Only service for us, so they issue the tenancy agreements (which are not written to default to contractual, so automatically go statutory), etc, and then I take over from Month 2 onwards - which is why I write to tenants when their initial fixed term comes to an end. (I do occasionally use the NRLA template, which I see has recently been updated since I last used it in Sept 2019 to specify the tenancy will roll over into contractual.)

Prakash Tanna

15:18 PM, 16th December 2020
About 5 months ago

Reply to the comment left by Annabel Blake at 16/12/2020 - 13:54ahh okay. As a 'new' tenancy is created at the point in time you go from a fixed term to statutory periodic you would need to serve all documents as you would had it been a new tenant. Also bear in mind the latest elec regs kick in too requiring an EICR.

Annabel Blake

15:46 PM, 16th December 2020
About 5 months ago

Reply to the comment left by Prakash Tanna at 16/12/2020 - 15:18
That was the conclusion I had - reluctantly! - come to, so thank you for clarifying.

Steve Masters

18:25 PM, 16th December 2020
About 5 months ago

Can anyone think of a good reason why Statutory Periodic could be prefered over Contractual Periodic? Other than it might suit the agent!
Sadly, it would seem your agents have dropped you in it Annabel. I would only use an agent who is prepared to include a suitable "Contractual Periodic" clause in your AST's from now on.

Annabel Blake

18:37 PM, 16th December 2020
About 5 months ago

Reply to the comment left by Steve Masters at 16/12/2020 - 18:25
Now I know the existence of the contractual variant, I will ask them to do this in future (they are very good and obliging agents, I have used them for years). Interestingly, when I asked them if they re-send all the usual information when a fixed-term turns into a statutory periodic, they said they didn't ! I am now going to ask another couple of the local agents what they do ...

Prakash Tanna

8:25 AM, 17th December 2020
About 5 months ago

Reply to the comment left by Annabel Blake at 16/12/2020 - 18:37
Agents have a 'moral' obligation to correctly inform you of the process and make sure you comply with the law BUT no doubt there will be a clause in there t&c's with you that ultimately you are the responsible and liable person when it comes to doing the right thing or not and they will wash their hands and walk away with your fees/commission. No dis-respect to agents, as I am one myself, but many of them really don't know their elbow from their big toe and the industry needs a shake up improve our imagine.

Although I use the NRLA website for documents and often call them to sanity check what i'm doing, they too often get it wrong and give their 'opinion' rather than the facts or what the law says you should or shouldn't do. They don't like to be challenged or corrected.

If you need any help or assistance, get in touch. My email is info@TannaProperty.com.

Prakash Tanna

8:34 AM, 17th December 2020
About 5 months ago

Reply to the comment left by Steve Masters at 16/12/2020 - 18:25Hi, I personally cannot see any benefit in creating a 'new' statutory periodic tenancy v's a contractual one. Can anybody else? The difference came about several years ago when I Landlord challenged payment of Council Tax outside of a fixed term contract where the tenant had disappeared. From memory, he took it to court and won as his agreement had the 'contractual' clause. Since then I just presumed it was standard practice to have the 'contractual' clause in place.
As you say, it may well suit the agent, allowing them the opportunity to charge a 'renewal' fee to the Landlord and give them the opportunity to instruct external services (at the Landlord's expense) to prepare documents etc. with their preferred suppliers. lol

This summarises the difference ....

https://www.nrla.org.uk/resources/creating-your-tenancy/guide-to-contractual-and-periodic-tenancies

DSR

14:00 PM, 17th December 2020
About 5 months ago

Assuming the term 'contractual' can be in place of 'statutory' within Rent to Rent contacts too?

David

17:19 PM, 18th December 2020
About 5 months ago

Reply to the comment left by Prakash Tanna at 16/12/2020 - 15:18
I think Superstrike and then the Deregulation Act settled all that. My understanding is that assuming everything was properly served at the start of the fixed term, the only document you need re-serve when an SPT arises is the How to Rent document, and only then if it has changed in the meantime

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