What to Do At the End of a Fixed Term
A landlord will usually rent out their property to a brand-new tenant for an initial fixed period – usually six months. But what happens when that fixed term ends? Should he or she draw up another fixed term contract, or let the lease continue on a rolling month by month basis?
If the tenants say they want to stay in the property at the end of the fixed term and no new lease has been drawn up then they will be classed as ‘periodic’ tenants ie the tenancy continues on a month by month basis.
Tenants usually prefer a fixed term so they can at least count on living in the property for a certain length of time ie one year, two years etc. Fixed tenancies are also beneficial for landlords for a similar reason ie they can count on payment for a certain period.
Periodic Tenancy – AST
If the fixed term comes to an end and the rental agreement is for an Assured Shorthold Tenancy then, according to section 5 of the Housing Act 1988, a periodic tenancy is automatically triggered. It starts immediately and will be under the same terms and conditions as the fixed term tenancy.
Period Tenancy – Common Law
A Common Law tenancy is one where the landlord lives on the premises. It could be he or she is renting out a ‘granny flat.’ Limited company tenancies come under Common Law, so too do tenancies where the rent is more than £100,000 or less than £750 a year.
Under section 54(2) of the Law of Property Act 1925 a periodic tenancy is automatically created, provided the tenancy continues to pay rent and the landlord is happy with the arrangement.
Period Tenancy – Contractual
A contractual tenancy can only go ahead if it has been agreed in the tenancy agreement. It is similar to the previous two periodic tenancies in that it is ‘rolling’ once the fixed term ends. However, there is a big difference with a contractual periodic tenancy – the landlord can set the date on which he or she wants the periodic tenancy to end.
Can You Evict a Tenant on a Periodic Tenancy?
Some landlords fear that they may never get rid of their tenants if they end up on a period tenancy. But that isn’t the case. Provided they go through the legal avenues available to them ie via the court system, they will get possession of their flat if tenants refuse to budge.
It’s not the case either that the longer a tenant has lived in a particular property, the more rights they have when it comes to legal matters. No, the landlord is still the owner of the property.
Joint Tenancy Agreements
If one tenant decides to leave the property and there is a joint tenancy agreement then, provided they give the property notice, the tenancy will end for everyone on the property unless there is a case in the Agreement saying otherwise. The existing tenant/s will then have to sign another Agreement, this time emitting the name of the tenant who is leaving.
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