Statutory v Contractual Periodic Tenancy: what to issue?

Statutory v Contractual Periodic Tenancy: what to issue?

10:21 AM, 16th December 2020, About 9 months ago 44

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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

by Seething Landlord

23:06 PM, 22nd December 2020, About 9 months ago

Reply to the comment left by Robert at 22/12/2020 - 14:12
You do not appear to have read the second paragraph of my previous reply, which answers several of the points that still seem to be confusing you.

To answer the other points you have now raised:

"What appears to be the case is that a contractual periodic tenancy is treated as a continuation of original tenancy but a statutory periodic tenancy is a new tenancy. Why the distinction I do not know" - the reason is that in the case of a CPT provision for the tenancy to continue indefinitely beyond the fixed term is provided for in the original contract; the SPT only comes into existence after the original tenancy has expired.

"Another area of confusion is whether a tenant may move out without notice at the end of the fixed period" - why? If written to continue on a contractual basis the notice requirements will be included in the agreement. Otherwise, the fixed period is what it says - no notice is required because the tenancy expires and no longer exists. The SPT could not be a "new" tenancy if the original were still in existence. Were it not for S5 of the Housing Act 1988 a tenant who did not surrender possession at the end of the fixed period would become a trespasser.

The basis (part of the ratio decidendi) of the Superstrike judgment (have you read it?) was that a new tenancy is created by operation of HA S5 if the tenant remains in occupation beyond the fixed term. The law on this is not and never was ambiguous - it was simply that apart from a few lawyers who were largely ignored, by and large people had misunderstood it and wrongly assumed that the statutory periodic tenancy was to be treated as a continuation of the original tenancy. It did not really matter in practical terms prior to the introduction of the deposit protection legislation, after which the misunderstanding and/or failure to appreciate the significance of it proved rather costly for those who were caught out.

by Robert M

0:35 AM, 23rd December 2020, About 9 months ago

Reply to the comment left by Seething Landlord at 22/12/2020 - 23:06
This is text book reply rather detached from the real world, as is much of the law. In other words, you are correctly analysing a set of circumstances that should not need to be so complex.
"What appears to be the case is that a contractual periodic tenancy is treated as a continuation of original tenancy but a statutory periodic tenancy is a new tenancy. Why the distinction I do not know."
When I said this, I had no doubt there is a legal distinction. I have long since understood this, my point is that there is no practical need for this to be the case.
In theory a tenant signing a fixed term agreement should (ideally) know they can stay on at the end of the tenancy unless notice is given. If they understand this, the vast majority would not care less if it was CPT or SPT. So why does a simple provision which can be covered in two sentences that creates a CPT, NEED to create such a different legal position?
I still maintain that the legal cases I mentioned should not have been necessary. Yes thank you I have read Superstrike, though not again recently. This merely confirmed my view that the safest route is for a new agreement is that it should include a CPT and include a request for notice to leave at the end of the fixed term.
My decision was based on the fact that (even as an agent) I saw no reason to have to ask tenants to review their position twice a year. The possible extra fee income never excited me. This decision was made well before deposit protection came in and, it appears, happens
“It did not really matter in practical terms prior to the introduction of the deposit protection legislation …” You see we almost agree? “… after which the misunderstanding and/or failure to appreciate the significance of it proved rather costly for those who were caught out.” Should not have been the case.
The problem being that the original deposit legislation was very poorly drafted. I suspect that the majority of landlords and agents only understood the basics but did not come unstuck because this was usually sufficient. In fact, the deposit legislation remains unfit for purpose.

by Seething Landlord

2:16 AM, 23rd December 2020, About 9 months ago

Reply to the comment left by Robert at 23/12/2020 - 00:35
You might think that the law is detached from reality whereas I would say that it establishes the reality in which we have to function.
If you were using agreements incorporating a CPT prior to the introduction of the deposit protection legislation you were well ahead of the game. As far as I remember they only became available from the various landlord associations after somebody devised them as a way of avoiding the adverse effects of the Superstrike case.
The difference between the two forms of tenancy is of little consequence to the tenant but had far-reaching implications for the landlord, at least until the Deregulation Act dealt with the deposit protection problem. We have always explained to prospective tenants that the tenancy would continue automatically beyond the fixed term but in common with most other landlords had not appreciated that a new tenancy would come into existence until this was pointed out so clearly by the courts.

by David

15:23 PM, 23rd December 2020, About 9 months ago

I think that in part the answer to your question, Robert, is that tenancy law was not created as a coherent whole in a single sitting. Its a hotchpotch of legislation that doesn't always sit together very satisfactorily, but Parliament seems to have no appetite for a new legal structure for letting property.

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