What Happens When a Fixed Term Tenancy Comes to an End?Written By PropertyLoop February 12, 2021
What Is a Fixed Term Tenancy Agreement?
As the name suggests a fixed term tenancy will grant the tenants temporary possession of the rental property for an established period of time. This period is commonly referred to as the tenancy’s fixed term, and put simply is how long the tenancy lasts. However, the caveat to this is the tenant must uphold their responsibilities and obligations outlined within the tenancy agreement such as paying rent and informing the landlord of any damage, as if these terms are violated the landlord could move to reclaim possession of the rental.
How Long Is a Fixed Term Tenancy?
Although fixed term tenancies will typically last anywhere from six months to a year, there is no limit on how long such agreements can run for, leaving the exact length of the tenancy down to the individual tenancy agreement.
What Happens When a Tenancy Agreement Expires?
Naturally, when the end of a tenancy’s fixed term is drawing closer tenants may be on the search for their next home, simultaneously seeing the landlord carry out numerous property viewings and gathering references in the hopes of finding their ideal tenant. Whilst this search may be synonymous with the renting experience there are other options available to landlords and tenants once the fixed term of their tenancy agreement expires.
Renew Your Tenancy Agreement
Providing that both the tenant wishes to remain within the rental property and the landlord is happy for them to remain, both parties could choose to renew the tenancy agreement once the existing fixed term comes to an end. This renewal would be treated as entering into a new agreement with new terms, potentially seeing the landlord alter the amount of rent the residents are expected to pay each month, alongside the length of the rental period, or fixed term.
Renewing the tenancy agreement is a favoured move by many landlords as this will also them to not only avoid paying letting agents’ high premiums on essential marketing costs, but also prevent a void period, leaving them financially exposed to any insurance fees and mortgage payments. In turn, renters do not have to scramble to arrange new living accommodation, frantically packing up their belongings in the search for a new home and inevitably rushing the process.
Enter Into a Periodic Tenancy
Alternatively, if the tenant wishes to remain in the property but neither party wants to renew the tenancy agreement a periodic tenancy will automatically be entered into. Sometimes referred to as a rolling tenancy, as the moniker suggests in the absence of a fixed term, the tenancy “rolls” from month to month. With this being said a periodic tenancy grants complete flexibility, therefore rent could be paid on a weekly or quarterly basis, with these acting as a “tenancy period.” A factor of this flexibility is either party’s ability to end the tenancy. With there being no fixed term, tenants only have to give one tenancy period for notice, with landlords typically giving 2 months’ notice.
Ending a Tenancy Agreement Early in the Fixed Term
If a tenant wishes to leave the tenancy before the fixed term has come to an end, unless they can come to a mutual agreement with the landlord, their only alternative is to enact a break clause. To be used a break clause must be contained within the original tenancy agreement, and can be used by either the landlord or tenant. The break clause will specify the amount of notice either party must provide when moving to end the tenancy, with this threshold being subject to fairness. This means that the specifics of the clause must be in compliance with consumer protection laws, meaning that any provisions made for the landlord when ending a tenancy, must be reciprocated for the tenant.
If the tenant chooses to end the tenancy through a break clause, then they are not obligated to provide the landlord with any additional notice, over what is stated in the clause itself. In most cases, if the tenant serves this notice and then remains in the rental property the landlord will not have to gain a court order to reclaim possession as this will have been given up by the tenant with the use of the break clause. It is also worth mentioning that tenants may be prevented from enacting a break clause if they have failed to meet their legal requirement throughout the tenancy, seeing them accumulate rent arrears and neglect the condition of the property. Further to this if the occupants paid any amounts of rent in advance, this will not be refunded if they use a break clause within the period rent was paid for upfront.
Ending a Joint Tenancy Early
Tenants will be in a joint tenant if there is more than one occupant named on the tenancy agreement. If this is the case then providing that all of the occupants wish to bring the tenancy to an end a break clause could be enacted as previously described, or a mutual agreement could be reached with the landlord. However, if not all of the occupants of the rental property wish to vacate and end the tenancy then those that leave the rental would still be liable for the rental payments until a new agreement is signed between the landlord and the remaining tenants.
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