Tenancy agreements – At the end of the fixed term

by Tessa Shepperson

10:23 AM, 8th July 2013
About 6 years ago

Tenancy agreements – At the end of the fixed term

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Tenancy agreements – At the end of the fixed term

All good things come to an end – and in due course your  tenancy agreement’s fixed term will end too.

What happens then?

When the fixed term ends

Some people assume that the tenancy will end and that if the tenants stay on they will be squatters who can be easily evicted.  However you will probably realise that this is very far from the case!

All assured shorthold tenancies will continue, by virtue of a new ‘periodic’ tenancy which will come into place immediately the fixed term ends, under s5 of the Housing Act 1988.  So if the fixed term ends on 4 July, then the new periodic tenancy will start at about 1 second past midnight on 5 July.

The ‘period’ is linked to how the rent is paid.  So if the rent is paid monthly, this will be a monthly periodic tenancy and will run on from the 5th of the month to the 4th of the month.

So when the fixed term comes to an end – the parties have a choice.  They can either let the tenancy run on as a periodic, or sign up a new fixed term tenancy.

Which should you do?

Well either are fine.  Lets look at the options:

1. Giving a new tenancy agreement.  Letting agents often use this as a reason for a ‘renewal fee’ and are therefore understandably anxious for this to be done.  It can often be the best solution – both parties know where they are, and if you want to increase the rent, including it in a new tenancy agreement which is then signed by the tenant as agreed is probably the best way.

This is also a good time to incorporate any changes – for example if there are new tenants wanting to come onto the tenancy agreement, or if either party want the terms of the tenancy to be changed in any way.

2. Allowing the tenancy to continue as a periodic.  Although this is often thought of as a continuation of the original tenancy, in fact, unless perhaps the tenancy is continuing under a clause in the tenancy agreement, the periodic tenancy will actually be a new tenancy.

This is down to the wording in s5 of the Housing Act 1988 and the Court of Appeal have recently confirmed in the Superstrke case  that this is what happens.  So landlords need to consider whether their tenancy deposit needs to be re-protected and the prescribed information re-served.

Allowing the tenancy to continue as a periodic is often the best choice if the tenants have proved unsatisfactory and are being allowed to stay on approval.  If you issue a new tenancy agreement, then this will cancel any section 21 notice served, meaning that you will need to re-serve and will not be able to issue any proceedings under the notice until the end of the fixed term.

Whereas if the tenancy is a periodic, you will (assuming your section 21 notice period has expired) be able to issue proceedings immediately if the tenants continue to prove unsatisfactory.

Vacating the property and notice periods

Assuming that the tenants do not want to stay on – what are the rules regarding notice?

Generally landlords will want at least 1 month notice, usually more, so they can arrange for checkout meetings and the like.  However if the tenants leave at or before the end of the fixed term they are not actually obliged to do this.  If the tenancy is for, say, six months, and the tenants leave on the last day, then the tenancy will end by what we lawyers call ‘effluxion of time’.

There is no need for the tenants to give notice as the tenancy (that tenancy) ended then anyway.

This is a bit unfair on landlords as it means that the tenants can choose whether to stay on under a periodic or leave by the end of the fixed term, without letting the landlord know.

My tenancy agreement has a clause which requires the tenant to let the landlord know what he intends to do – but breach of this clause will not make the tenants liable for any rent in lieu of notice (if I tried to do this I would risk the clause being found unfair).  It may be sufficient though to allow the landlord to claim any wasted costs due to the tenants failure to provide proper information.

However if the tenant then stays on, even by one day after the fixed term has ended, the periodic tenancy will kick in and they will have to give not less than one months notice if they want to leave.  If they don’t then the landlord WILL be entitled to claim rent in lieu of notice.

But not if they leave on the last day of the fixed term tenancy.

Conclusion

This is the end of this short series of articles on tenancy agreements.  I hope you have enjoyed it.

If you want more, note that I have a lot of guidance in my free Tenancy Agreements 101 which you can sign up for here.Tenancy agreements - At the end of the fixed term



Comments

sally lloyd

9:35 AM, 9th July 2013
About 6 years ago

hi,
I am renting out my first property and it is coming to the end of the first 6 months rent agreement. I have received a letter from my agency asking if I would like to renew the agreement at a cost of 2 weeks rent for arranging new contract. Which is what I thought I had to do, but from my understanding from your post I don't have to do that.

Can I just tell the agency I want to continue on a periodic agreement and request they re protect the deposit. if so are they still entitled to charge me 2 weeks rent.

3:54 AM, 10th July 2013
About 6 years ago

Reply to the comment left by "sally" at "09/07/2013 - 09:35":

You do NOT have to renew the AST.
Generally this is just a way for greedy LA to make money out of you.
Advise the LA that you intend to remain in the property on a SPT basis.
Advise them if this is NOT satisfactory they can issue a S21 notice to you.
It will take about 6 months to evict you; during which time you should continue to pay the rent.
Knowing you WILL ultimately be evicted, if you wish to take it that far, gives you the opportunity to resource other property and once sourced you ONLY have to give 1 month's notice.
However if you wish to ensure that a LL cannot evict you for about a year then sign another 6 month AST.
If you pay your rent and after another 6 months the LL wants you gone it could take another 6 months to evict you.
Signing another 6 month AST does NOT guarantee the LL ANYTHING!
YOU can leave anytime you want and there is NOT a thing a LL can do about it.
He could try and pursue for breach of contract; highly unlikely he will succeed!
I suggest you have a conversation with the LL and advise you don't wish to sign on another AST but that you have no intention of leaving but will advise as soon as you know you wish to leave.
Thayt is what I have always done.
Quite frankly I wouldn't wish a tenant to have a 6 month AST again.
I prefer SPT's everytime!
I have NEVER requested a tenant leave!
They have ALWAYS vacated at theirs and my convenience.
So DON'T renew just advise you will be proceeding onto an SPT and get the LA to confirm it will be on a SPT when the 6 month ASP fixed term period has expired.

4:03 AM, 10th July 2013
About 6 years ago

Reply to the comment left by "sally" at "09/07/2013 - 09:35":

Forgot to mention there is NO need to reprotect deposit; in any case it is nothing to do with you.
If the LA wants to reprotect that is down to their expense.
About the only thing they should do is advise the scheme that the tenancy is proceeding onto a SPT.
Again it is none of your concern.
Everything remains the same.
If the LL has NOT served a S21 b before the ^ month fixed term AST period has expired then they would need to issue a S21 a
That is for your info.
Don't tell the LA or LL just incase you have future issues.
Remember if they haven't issued a S21 b by the time your 6 month AST has expired they will need to serve a S21 a and they could NOT apply for a PO until 2 months had elapsed form serving the S21 a!
Having said all that if you want a guaranteed easy life for the next 6 months paying the renewal fee might be a better option!!

sally lloyd

10:19 AM, 10th July 2013
About 6 years ago

Reply to the comment left by "Paul" at "10/07/2013 - 04:03":

Hi Paul,

Thanks for the comment, I am the LL Lol!! but very useful as I now know my tenants rights for armed is for warned. I definitely want to keep the tenant on a SPT and think the Agency is trying to pull a fast one on me as I'm a newbie.
sally

formula57

9:42 AM, 18th July 2013
About 5 years ago

I do not follow how a tenant can become liable for wasted costs in the circumstances you describe. Could you please explain more particularly?

The definition of wasted costs per The Supreme Court ‘(now Senior Courts)’ Act 1981, s 51(6) appears to confine itself to the activites of legal or other representatives soif a tenant was acting for himself (as principal) then would that Act apply?

Even allowing that wasted costs arose, these presumably would be slight in most circumstances as there would often by no additional costs that would arise only from a tenant's failure to give notice over a circumstance where notice was given. The main expense to the landlord would be in income forgone rather than additonal costs.

Sarah Gover

15:44 PM, 3rd April 2014
About 5 years ago

my fixed term assured shorthold tenancy agreement comes to an end this weekend 5th April 2014. I told my landlord last friday that i will be moving out and she has told me i am still required to give a months notice.

In my contract it states that i am required to give 1 month notice to terminate the property however would this still stand considering my tenancy finishes this weekend?

Mark Alexander

17:26 PM, 3rd April 2014
About 5 years ago

Reply to the comment left by "Sarah Gover" at "03/04/2014 - 15:44":

Hi Sarah

You are quite within your rights to move out on the date your contract expires without giving notice.

It's not a very nice thing to do to your landlord though as it gives him no time to re-let the property and could result in him enduring an extended vacant period with no rent coming in. You must have known well before now that you were moving out, why didn't you give more notice? Has he been a bad landlord?
.

Sarah Gover

17:31 PM, 3rd April 2014
About 5 years ago

She had called me on the 25th to say she was upping our rent at the end of the contract. Which i could not afford to do so, so told her on the Friday i will be moving out.

She has since this week put her house up for sale and has had valuation people round yesterday, she asked today for people to view it today (which is not giving me the required 24hours) also she hasnt been the best, it took her 2-3 months to replace our broken oven.

Mark Alexander

17:35 PM, 3rd April 2014
About 5 years ago

Reply to the comment left by "Sarah Gover" at "03/04/2014 - 17:31":

Seems a fair explanation to me, what goes around comes around.

I hope you are happier in your new home 🙂
.

Artur Szymanski

8:48 AM, 15th March 2015
About 4 years ago

my fixed term assured shorthold tenancy agreement comes to an end on 30th April 2015. I told my landlord last night that I will be moving out and he has told me I am still required to give a 2 months notice.

In my contract it states that I am required to give 2 months noticein writing.but not before ten months of the initial agreement effective from the rent due date to terminate the property however would this still stand considering my tenancy finishes this date ?

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