Tenancy agreements – At the end of the fixed term

by Tessa Shepperson

10:23 AM, 8th July 2013
About 7 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


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Comments

Mark Alexander

11:47 AM, 15th March 2015
About 6 years ago

Reply to the comment left by "Artur Szymanski" at "15/03/2015 - 08:48":

You are right, your landlord is wrong.
.

Bobby Brown

23:29 PM, 31st March 2015
About 6 years ago

Hi,

My fixed term contract is coming to an end in two weeks time. The landlord has sold the property. Does the 2 month landlord notice still apply? And in what format must the notice be?

Thanks

Mark Alexander

9:02 AM, 1st April 2015
About 6 years ago

Reply to the comment left by "Bobby Brown" at "31/03/2015 - 23:29":

The notice should be a Section 21 notice and yes I think it will still be applicable.
.

money manager

9:38 AM, 1st April 2015
About 6 years ago

I would never allow mysefl to get to the last date of an AST and not know what a tenant's intentions were. About 5 weeks beforehand a letter is sent politley asking their intentions but highlighting that in the absence of any new agreement the tenancy and possession wil end on the agreed date. On confirmation that they do wish to stay we negotiate term and rent. If they indicate the do not wish to stay we book check out visits etc. We recently "acquired" a tenant on periodic with a new unit who was vague at best, possibly due to language (foreing adult student) although nothing wrong with him as a tenant. To avoid overruuning when we want to have the property empty for renovation and reletting we agreed a last possible date and served notice accordingly, both parties happy.

Sarah Quinlan

15:37 PM, 21st October 2015
About 5 years ago

Hi there Could you cover the situation where the tenancy ends and the landlord doesn't want to renew it or let it run onto a periodic tenancy ie wants possession. As the landlord I wrote to the the tenant a month ago to say that I didn't want to renew his tenancy when it expires today (due to his anti social behaviour and racist/homophobic comments to other tenants) but he's refusing to go. MY letter wasn't a Notice to Quit as such, just stating I didn't want to renew his tenancy. Do I have to give him a Notice to Quit and 28 days to move out?

Mark Alexander

15:43 PM, 21st October 2015
About 5 years ago

I'm afraid you need to do a LOT more than that.

You need to serve a section 21 notice first which states you require possession within two months.

If your tenant refuses to move out at that point you will need to apply for a Court order.

If you haven't complied with all legislation (e.g. deposit protection) then your section 21 notice will not be valid.

Assuming the notice is valid a possession order will be granted.

If your tenant still refuses to budge then you will need to appoint Bailiffs.

Even as an landlord with 26 years of experience, if I ever needed to evict a tenant I would seek professional advice - see >>> http://evicting-tenants.net/
.

Sarah Quinlan

16:07 PM, 21st October 2015
About 5 years ago

Wow, what a complete nonsense our legal system is. Under what other contract would the parties be able to behave like this?!
I'm currently in the process of evicting another tenant who hasn't paid any rent since February & seems to know every trick in the book to stay in the house without paying. I did seek professional advice (from the lawyers recommended by one of the 2 largest landlord associations) & theirs is a very poor service so I'll check out your link, thanks .

20:45 PM, 11th May 2016
About 5 years ago

Hi all tricky one for me but hope someone out there has an answer
have a tenancy agreement now periodic but agency managing flat have been dissolved voluntary strike off confirmed it via companies house is tenancy agreement now null and void

David Garsed-Bennet

10:54 AM, 13th May 2016
About 5 years ago

My fixed term contract ends at the end of May. Usually the landlord informs us of the new rental cost about 2 months before the end of the contract. However this time they have only informed us of the new rent 15 days before. We can not afford the new rent, but 15 days is too late to arrange moving out.

My understanding is that whilst under a periodic tenancy the landlord must give at least a months notice of rent increase. Is this not the case when a fixed term contract is ending?

If a fixed term tenancy always turns in to a periodic one, then does that not mean a tenant can always get at least one month at the same rent after the fixed term? If so, this will give us a chance to negotiate a better price, or find a new property.

Thanks in advance for any help.

Black Jack

14:25 PM, 12th July 2016
About 4 years ago

Hi, please can ask what date I should use if the AST ended over 6 months ago, I have recently moved house and have ripped the new house apart looking for my file but it's nowhere to be seen.

I would like to serve a S21 notice but believe I need to be exact with the date. I'm not sure what to do?

Many thanks in advance

Jim

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