What Happens When a Tenancy Agreement Expires?Written By PropertyLoop March 03, 2021
With demand for rentals soaring over recent months as the uptake of properties at the start of 2022 ascends 76% higher than the same period between 2018 and 2021, competition for available rentals and the number of new tenancies being established looks to rise further. But is a fixed-term agreement the only option? And what happens when a tenancy agreement expires?
What Is a Rolling Tenancy Agreement?
A rolling tenancy, sometimes referred to as a periodic tenancy occurs if the fixed term of a tenancy has come to an end, yet the occupants remain in the property without coming to a new agreement with the owner. Neither the landlord nor the tenants need to do anything for a rolling tenancy to commence, as they simply occur in the absence of a tenancy agreement. Whilst some may be quick to see this as a negative, many landlords and renters revere periodic tenancies for the flexibility they provide, whilst also sometimes seeing owners gain a higher rental income as a result.
What Is the Difference Between a Fixed and Rolling Contract?
Typically speaking, when entering into a formal rental contract landlords and tenants will use an assured shorthold tenancy, allowing them to take advantage of the benefits a fixed period provides. Perhaps most significantly, both parties of the agreement will often prefer this form of tenancy for the security it provides, with the fixed term prohibiting change to the terms of the agreement, offering stability and confidence; both in that the tenant won’t lose their home, and the landlord will have a reliable rental income.
As opposed to this, as the name suggests a rolling tenancy will automatically renew on a periodic basis, commonly running from month to month. Whilst this does mean that the landlord is perhaps more exposed to void periods, or at the very least would have far less certainty as to when they would need to begin the search for their next tenant. However, if the owner of the property wishes to sell, or find new occupants it would be a far easier process than eviction during a fixed term, with this convenience to adapt the terms also ringing true for rent increases.
Can My Landlord Evict Me on a Rolling Contract?
Just as is the case when the tenant is in a fixed-term agreement, landlords are able to pursue the eviction process in order to reclaim possession of their rental property. If the periodic tenancy is statutory then the owner will only be legally required to provide the tenants with two months’ notice before issuing a section 21 notice of eviction.
This can also sometimes be the case with a contractual periodic tenancy, but it is worth noting that if the rent is charged either on a monthly or quarterly basis then the minimum amount of notice a landlord can provide an occupant will be the same as the frequency at which they pay rent.
Can You Increase Rent on a Rolling Contract?
Similarly to a traditional tenancy, landlords that have a contractual periodic tenancy with their occupants are able to increase rent through implementing a rent review clause. This will see the landlord provide the tenant with a notice period before increasing the rent by a set percentage.
Alternatively, owners with a contractual rolling tenancy may also increase the rent through a section 13 notice, however, the occupant must have resided within the property for at least twelve months. With this being said, if the owner holds a statutory periodic tenancy with the occupants, then they will not have to wait a year, instead being able to increase the rent once the fixed term of the tenancy has ended.
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