A Guide to Periodic TenanciesWritten By PropertyLoop July 14, 2021
As those that are well versed in the private rental industry will be able to appreciate, the intricacies that comprise a tenancy agreement are far from straightforward, and with a suite of potential agreements to establish with your tenants knowing the benefits of each is essential. One of the cornerstones of the renting has historically been revered as the inherent flexibility it provides, well with this in mind, all pale in comparison to the rolling, or periodic tenancy.
What Is a Periodic Tenancy?
Put simply, a periodic tenancy is one that does not have a fixed term, but instead is renewed on a periodic basis. Whilst in most cases this would typically see the tenancy run from month to month, with the start being commenced alongside the residents rental payment, it is not unheard of for landlords to establish these rental agreements with their tenants on a weekly or quarterly basis.
Landlords and tenants must note that in order for the periodic or rolling tenancy to commence they do not have to commit to any new form of agreement, rather that once the fixed term that is defined in the original tenancy agreement comes to a close, the rolling tenancy will automatically commence. This type of rolling agreement would be called a statutory periodic tenancy as it follows an assured shorthold tenancy agreement.
With this being said, although the above rings true for the overwhelming majority of cases for rolling tenancies, there are instances were a tenancy would be ready to go periodic from the outset. This would be due to the bespoke terms entered into the tenancy agreement from the outset, with the document detailing that once the fixed term of the rental period comes to an end, the tenant would be entered into a periodic tenancy, referred to as a contractual periodic tenancy.
How Does a Landlord End a Periodic Tenancy?
Providing that the landlord’s wishes to bring the tenancy to a close they will need to provide the occupants of the rental property with at least 2 months’ notice, or alternatively one full cycle of the periodic tenancy before the tenancy is brought to a close. This means that is the periodic tenancy that has been entered into by the tenant is automatically renewed every six months, then the minimum notice period before they must vacate the rental property is another six months. Additionally, to the frustration of landlords across the nation it is essential to note that despite this notice period, there is technically nothing to compel the tenants to leave the rental. In these circumstances the owner of the rental property will need to appeal to the courts in order to be granted a court order and expel the unwanted occupants from the property.
With this being said, providing that the rolling tenancy is considered to be a statutory periodic tenancy, the landlord will have a more traditional form of eviction they could pursue to reclaim possession of the rental property. Landlords and rental property owners are therefore empowered to reclaim possession of their rental property through the use of a section 21 notice through the introduction of the Housing Act 1988. The specific regulations state that:
“Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied; that the landlord or, in the case of joint landlords, at least one of them has given to the tenant a notice stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling-house is required by virtue of this section; and that the date specified in the notice under paragraph (a) above is not earlier than the earliest day on which, …….., the tenancy could be brought to an end by a notice to quit given by the landlord on the same date as the notice under paragraph (a) above”
With this being said it is essential that both landlords intending to reclaim possession of their rental property, and tenants that are looking to fight the swerving of an eviction notice, that there are specific grounds that must be fulfilled in order for such a notice to be upheld in court. If the landlord has failed to issue the occupants of the rental property with the appropriate documentation when they first moved into the accommodation, comprising the energy performance certificate, gas and electrical safety certificate, alongside the government issued “how to rent guide”, then this will be viewing as neglecting their duties as a landlord and as a result the eviction notice will not be upheld. In most cases the rental property owner will have 30 days in which to provide their residents with such documentation after its receipt, request, or the tenancy agreement being signed.
Further to this, if the landlord has renewed the tenancy, or the section 21 notice was served during the fixed period of a previous tenancy period then the eviction notice will be deemed invalid and will therefore be redundant. This applies not only each time the tenancy agreement is renewed with the occupants of the rental property, but also each time the periodic, or rolling tenancy is reintroduced. Similarly, although at the outset of the tenancy period the landlord is under no obligation to take a tenancy deposit from the occupants of their rental property, if they choose to do say, any taken amounts must be entered into a government approved tenancy deposit protection scheme within 30 days of the amounts being handed over by the tenants. Further to this with the introduction of the Tenant Fees Act of 2019, the amounts the property owners are able to request from their tenants is also limited depending on the amount they charge their residents each year in rent. In most instances the landlords will only be able to take a maximum of the equivalent cost of five weeks rent for the tenancy deposit, as the annual rental charge for the property will be lower than £50,000. However in the cases that the amount the tenant pays in rent each year is over this threshold, the landlord is able to ask for up to six weeks’ worth of rent for the deposit. If the owner of the rental property takes an unlawful amount from their tenants, or fails to enter the appropriate amounts into a government protection scheme they will not be able to serve their tenants with a section 21 notice.
What Is the Notice Period for a Periodic Tenancy?
As previously mentioned the minimum notice period will be largely defined by when the periodic tenancy is renewed. If you are unsure as to when this is, it can be simply established by the frequency at which the occupants of the rental property pay their landlord rent. As can be expected, either party of the rental agreement will of course wish to receive the maximum amount of notice either before the tenancy is brought to a close, or regarding the tenant, they must have found a new rental opportunity elsewhere. With this in mind the minimum amount of notice that a landlord will be able to issue their tenant before bringing a periodic tenancy to an end is two months; however, if this period is short than the amount of time the tenancy runs before rent is paid again, the tenancy will expire at the next date of renewal.
However, providing that both the tenancy and the landlord wish to bring the rolling tenancy to an end, it is highly likely that they will reach an amicable solution through what is referred o as mutual consent to close tenancy period.
As with the other forms of tenancy agreement it is not just the rental property owner that is entitled to bring the tenancy to a close as the occupants are able to serve their landlord with a notice to quit. When doing so they are detailing their intentions that they wish to vacate the property and must provide the landlords with a minimum of one month, where the rent is collected each month, and 28 days when paid weekly.
What Are the Benefits?
As we have all come to debate at some point in our lives, similarly to assessing the advantages and disadvantages of renting rather than outright owning a property, many of us that choose to rent our home depend on the flexibility that being a tenant can provide. With this in mind, a tenant that is on a periodic tenancy has somewhat achieved the ultimate in this adaptability, being empowered to rent at a time and in a place most convenient to their lifestyle as they would not be locked into a fixed term agreement. This convenience is inherent to the structure of the periodic tenancy and will not be found it the other types of tenancy that are available to the tenant. This is largely in part thanks to the fact that the periodic tenancy, as the name suggests, is renewed each month automatically. Not only does this afford both parties of the tenancy agreement with undiluted clarity as to how the rental agreement and relationship will proceed, but will also save the landlord, letting agent and tenants of the rental property a great deal of time, money and effort establishing a new tenancy agreement, particularly if all concerned are already happy with the terms of the original agreement as some of these would still be in place.
With this being said, it is difficult to ignore how this flexibility could also be a thorn in the side of the occupants of the rental property as it does not exclusively work to their benefit. This is one of the instances where it is in the best interest of both the tenant and the landlord to keep their relationship on good terms. As we have previously mentioned, although the occupants of the rental property would not be bound by a fixed term, leaving them free to vacate the rental property with a relatively short notice period, so too can the landlord use this to their benefit if pursuing to reclaim possession of the property. However, rather than leave the owner of the property with a dwindling rental income, or the tenant scrambling to find their next home it is far more beneficial for all involved to exercise mutual respect for each other’s position and regardless of the legal requirement for this notice always inform the other party as soon as possible.
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