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Periodic Tenancies Explained, Including The Advantages & Disadvantages

Page contents:

What is a Periodic Tenancy?
When/how does a Periodic Tenancy begin?
When/how does a Periodic Tenancy end?
What are the advantages of a Periodic Tenancy?
What are the disadvantages of a Periodic Tenancy?
Contractual Periodic Tenancies

What is a Periodic Tenancy?

A Shorthold Tenancy automatically becomes a “periodic tenancy” if new contracts aren’t signed after the fixed-terms expire in the original Tenancy Agreement and the same tenant(s) remain in the property. All the same terms and conditions apply, but the only difference is that a new periodic contract begins, otherwise known as a ‘rolling’ contract, which typically runs on a month-by-month period.

The “period” is dependent on how frequently the rent is paid. For example, if the rent is paid on a PCM (Per Calendar Month) basis, which is most often the casem then the contract will run on a month-by-month basis (unlike fixed term contracts, which most commonly run for 12 months). Same principle applies if the rent is paid on a weekly or bi-weekly basis. Some run from quarter to quarter or even year to year.

Many people assume that as soon as a tenancy expires (e.g. the fixed date has come to an end/passes) that the tenancy automatically terminates. That is not true, hence Periodic tenancies.

When/how does a Periodic Tenancy Begin?

To reconfirm, you don’t have to do anything.

Tenancies automatically become periodic immediately after the fixed date in the contract has expired and when the tenancy is not renewed. The landlord or tenant doesn’t need to do anything, and you don’t need a special kind of contract/clause.

Do I need to re-register my deposit if the tenancy becomes periodic?

This is a frequently asked question, so I thought quickly address it.

If your tenancy rolls over into a periodic tenancy, without any substantive changes, there is no need to re-register the deposit at the end of the fixed term. There is also no need to pay another charge. More details available from this article by TDS.

When/how does a Periodic Tenancy End?

Like any other type of tenancy, periodic tenancies should only be terminated through proper legal processes. A periodic tenancy will continue until it is terminated either by one of the following methods:

Mutual consent (i.e. when both landlord and tenant agree to terminate the tenancy)
Eviction by landlord
Notice by tenant (the notice period will depend on how often rent is paid, as discussed above)
Notice by landlord (a minimum of 2 months written notice must be given to tenant

Please go to the linked blog post to find out more on how to end/terminate a periodic tenancy.

What are the advantages of a Periodic Tenancy?

They allow flexibility e.g. if the landlord suddenly wants the property vacated, he/she can immediately serve a Section 21 Form – notice of possession, without having to wait for a fixed term to expire before the tenant has to vacate.
There’s no need to arrange another tenancy agreement, the clauses in the expired agreement will still apply. Additionally, saving paper is awesome!
A lot of snake-oil letting agents charge a tenancy renewal fee for renewing contracts. So, if a landlord allows the contract to transform into a periodic tenancy, a new contract is not required, consequently escaping the admin costs associated with the process.
If the landlord wants to be greedy and increase rent, or add any additional clauses to the contract, he can do so pretty sharpish, providing that the periodic tenancy is terminated and a new agreement is put in place. Since the period of a periodic tenancy depends upon the rent payment schedule, it doesn’t take long for any of the new clauses to be added since most rent is paid on a monthly basis.
Finally, the biggest advantage in my opinion, which makes periodic tenancies incredibly useful; it’s a lot quicker and easier to remove rogue tenants during a periodic tenancy i.e. Landlords can serve a Section 21 to regain possession, and providing that it’s been served correctly, the eviction process is usually a lot more efficient than serving a Section 8 Eviction notice.

What are the disadvantages of a Periodic Tenancy?

As I already experienced in a harsh life lesson, putting good tenants on periodic tenancies is risky because they can unexpectedly vacate pretty quickly.
Tenants typically only need to give one month’s notice when they’re on a periodic tenancy, which may not allow a comfortable amount of time for the landlord to find new tenants if the current tenant gives minimal notice. The issue can become extra stressful if the property requires cosmetic work in order to attract new tenants.
Over the years, new regulations have been passed through into the BTL industry (e.g. Tenancy Deposit Scheme). These new regulations should be mentioned in the tenancy agreement as statutory clauses. Point being, if you allow a contract to continually be periodic for a long period of time, it can slowly become out of date. It’s important to keep tenancy agreements inline with the law, so the T&C’s are always clear in black and white.
Finding new tenants can be expensive, so if you’re a landlord that prefers using 6 months fixed term agreements, and always allows the tenancy to go periodic, you’re leaving a big window of opportunity for a high tenant turnover rate. It can often be more cost-effective to fix tenants for long term. Of course, that’s largely dependent on your own judgement to decide on whether you have good tenants or not that are worth the commitment.

Contractual Periodic Tenancies

“Contractual periodic tenancies” are slightly different to “Periodic tenancies”

A contractual periodic tenancy exists when both landlord and tenant agree in contract that the tenancy will become a periodic tenancy, as opposed to allowing it to naturally roll into one without any mention of it (after a fixed term contract expires and where a tenancy isn’t renewed, the tenancy will automatically become periodic).

It be a contractual periodic tenancy in three ways:

1) By making it clear in the original tenancy agreement that the tenancy will become a “contractual periodic tenancy” after the fixed period (the word “contractual” should be stated).
2) By getting the tenant to sign a periodic tenancy agreement when the fixed term contract is shortly due to expire, so it will get overtaken by the new periodic tenancy agreement.
3) It is possible start a tenancy with a periodic tenancy rather than a fixed term of 6 months or 12 months. You can do this by giving the tenant an initial term of just one month (or a week) and then just allowing it to run on. However, bear in mind you cannot serve notice to the tenant for at least 6 months, because they are still protected by their statutory rights which stipulates a shorthold tenancy cannot be shorter than 6 months. This can only be overturned if there is a mutual agreement by the landlord and tenant for the tenancy to end.

Of course, the contract is still rolling like a regular periodic tenancy, based on how frequently rent is paid.

It’s actually a good idea to have a contractual periodic tenancy. Landlords are responsible for the costs of council tax if the tenants are on a periodic tenancy and move out during a notice to quit (eviction notice, Section 8) period. During the period of notice if the tenants choose to move out it does not exclude the landlord from paying council tax. However, if is a contractual periodic tenancy and tenants move out during notice we are covered and the responsibility for payments falls to the tenant.

Additionally, it is worth noting that if your tenant is on a periodic tenancy and rents another house (not that likely you may think but it does happen) then the responsibility for payment will once again fall to the landlord, unless it is contractual.

Conclusion

I know many landlords, including myself, favour periodic tenancies because of the flexibility. I generally like things to dangle and have wiggle room :) But it’s important for landlords to remember that the flexibility also applies to tenants. Once the tenancy becomes periodic, tenants have the ability to vacate quickly, and leave the landlord with a lot of work to do in a short space of time, especially if the property needs to be repaired in order to become presentable. Finding good tenants isn’t always the easiest, cheapest or quickest of processes.

So, my question to my fellow landlords, do you allow tenancies to go periodic? Do you have any kind of game plan when it comes to contracts?

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170 Comments- Join The Conversation...

Showing 120 - 170 comments (out of 170)

Chris 14th March, 2017 @ 12:56

Hi, hope you can help. I'm a landlord who has a tenant that I like with the existing 12 month contract expiring in mid June. He has indicated to me that he is looking at buying a property but has nothing concrete in place right now, however I would say he is unlikely to want to sign a new 12 month contract when this one expires. Ideally I would want 2 months notice when he wants to move on, as mentioned he's a good tenant and I don't want to stand in his way when he does find somewhere to buy however I would like to be covered as best as possible when he does hand his notice. Am pretty confident in finding new tenants in 2 months. What would people suggest is the best way of covering myself but also having something flexible enough that the tenant would be happy to sign? I've heard about contracts with 2 month break clauses, this on the face of it sounds perfect but in reality don't know how these work or if the paper they are written on is worth anything!
Cheers
Chris

120

Nick 25th March, 2017 @ 18:25

One month after my six month fixed term contract expired the letting agent contacted me and told me I had to sign another six month contract. At that point I had just lost my job and luckily got another within 2 weeks so as things were chaotic I did not research this. The agents also charged me a £75 contract renewal fee.
Am I correct in thinking that I should have turned around and told them that as the six month contract had expired I was automatically on a periodic tenancy and by the way you cannot charge me as the same contract terms continue?
It will be interesting to see if they try the next six month renewal before or after this one expires.

121

Simon Pambin 25th March, 2017 @ 21:31

Hi Nick,

You're right up to a point: there's no requirement to keep renewing the contract every time. Agents tend to like them because it's easy money. If you do let the agreement turn into an SPT then you lose a measure of security in that you can be given two month's notice to leave, but if the alternative is only a six month contract then there's not a lot in it anyway and, if you're a decent tenant, no landlord is going to be in any hurry to sling you out and go to all the expense of finding a new tenant who's an unknown quantity.

Ultimately, the decision is down to your landlord, though. Some just prefer a written contract every time, although few would think it worth the cost of replacing a good tenant.

122

Dee 8th June, 2017 @ 13:50

Hi,
I would like some advice please. I rented a property in November 2016 and, paid all the fees the letting agency asked for after signing the initial 6 month contract. I pay 1550 a month which is kind of steep for the area but, i love the house and it's location so agreed to pay same. I however spoke to the landlord at the time of renting saying i felt the rent was rather expensive. He assured me that he would leave it at that for a few years (no increase). This was a gentlemans agreement with nothing written down.
At the end of the 6 months, (in April 2017) the letting agency sent me a new contract showing an increase in rent by £50 to £1600pcm and, i was asked to pay £240 for the new contract too! I then called my landlord who said he knew nothing of the rent increase and that the agents onlý sent him an email to ask if he was willing to keep the rent same for the next 2 years.
Now i am sort of confused. I don't know who is not being straightforward here. I would like to stay in this house for a few years but then, i do not want to be conned by this letting agent.
What do you suggest? Go on to the rolling contract not signing any new contract? The other option would be to start to search for a new house.
Thank you!

123

Stephen 1st November, 2017 @ 12:50

Hi,
Big problem ! I was in a joint short hold tenancy for 12months, initially ending 26th Sept 2017. Landlord invoked a break clause in June & informed us to vacate the property on 26th Aug ( 1 month early). That was legal & we left on 26th August 2017 or so we thought until we all received a 'letter before action' from the landlord on 10th Sept stating that one tenant had decided to stay on in the property after 26th Aug. This has caused the fixed tenancy to roll into a 'tenancy on a periodic basis' ( I understand this to be a periodic tenancy). I interestingly the chap who 'decided to stay on' was not in the property between 28th Aug & 6th Sept which was 10 full days and the landlord 'explained' this by stating in writing that he changed his mind after leaving and returned after 10days thus, she says, creating a 'tenancy on a periodic basis' ( she appears keen to avoid the term 'periodic tenancy'). In her demand for full rent for September she included a deduction for the 10 days in which 'x' was out of the property.
Contact with 'x' produced a different story. He says'yes' he had decided to stay on since he had nowhere to go, that on his return to the property on 27th from a shopping trip to find the locks changed & his belongings on the street. He approached his local council who informed him that his 'eviction' was illegal and this was how he was able to return to the property 10dys later. I understand that 'eviction' in this manner is a criminal offence which migh explain the landlord's attempt to explain the missing days in a different way. Advice from cab & shelter told me forward a 'notice to quit', observing the correct time scales, & I would then have no further liability. My notice became effective on 26th Oct 2017 but the landlord refuses to accept it & states that she will seek ongoing rent from all former tennants until she can remove 'x' through court order ( Says it will take months). I do have legal advice which states that a judge 'should' look favourably on my (our) case but the stress & uncertainty are almost unbearable. The additional 2xmonths full rent is bad enough given that I moved to a flat @£800/my on the day I left the rental. A couple of questions !
1. Did a periodic tenancy ever exist given that 'x' either moved out for 10 days & changed his mind (landlord's version) or he returned to the property following illegal eviction.( On the day following his return (7th Sept) other tenants got an email inviting them to collect their new keys so for sure the locks had been changed) 'x''s story sounds more plausible due to this.
2. If, indeed, a periodic tenancy did exist & given that all rent due has been paid up to the date of the notice, by what mechanism can the landlord continue to 'keep us under the threat of court action' given we seem to have conformed to her demands however questionable they may prove to be.
3. Yes I have encouraging legal opinion ( also expensive) but even it says that it can depend on the judge on the day. How can this be? It's truly frightening.

124

Simon Pambin 2nd November, 2017 @ 14:29

Whilst I may have some sympathy for the situation in which your erstwhile landlady finds herself, it seems to me that, by her own actions, she has brought your tenancy to an end. She gave you notice, you all left (albeit perforce, in the case of one tenant), and she has acknowledged as much by not charging you for the ten days before the one tenant moved back in. I don't know what she's inadvertently created as a result, but it can't be a statutory periodic continuation of the existing tenancy, as far as I can see. Having said that, I'm not a lawyer!

125

Stephen 3rd November, 2017 @ 13:03

Simon,
Very pleased that you took the trouble to respond. Which Legal are currently studying all the docs & communications having raised exactly the same points made by yourself. They said that the rents paid for Sept & Oct may not have been required as the tenancy may have been terminated by the absence of 'x' from the property for 10 days & like yourself irrespective of the true reason for his absence. We offered by email to 'take the hit' of the rent for Sept& Oct provided she accepted that the tenancy was now at an end. She has declined !
Everyone else agrees that my served 'Notice to Quit' was correctly actioned & legal so I don't know what she's up to other than trying to squeeze rent from us which will not be flowing in as long as 'x' occupies the property. I have hearsay information that this lady is a member of the legal profession which has stricken fear into the other co tenants. If true is this fitting behaviour for a legal professional?

126

Stephen 4th November, 2017 @ 10:50

Following my most recent post, I can now confirm that I'm truly on my own. As predicted my last remaining ally in the above dispute has now deserted & moved back into the premises on Sun 29th Oct. In order to explain why he was the last one standing, I need to fill in other info about this 'tenancy from hell'.
This 4 person joint tenancy started on 27th Sept 2016. In Feb 2017 the lead tenant moved out and found his replacement 'R'. Landlady asked me to become lead tenant which I agreed to as no one else wanted to do it. As well as appraising me of my new duties the landlady told me that she had just discovered that tenant 'x' had not paid his rent for the first three months of 2017. I asked if she expected me to do something about it, to which she replied:- 'No, leave it to me to sort out'.
Next event @ end of March 2017 female tenant 'RA' moved out without finding a replacement
In July 2017 Landlady informed myself & 'R' that if she could not trace 'RA' then we were liable for her rent arrears (4mts) but also that 'x' had continued to default on his rent & we were now liable for his rent also (6mts). She had also invoked a break clause allowing her to end the tenancy one month early (26Aug 2017).
'R' and myself left as dictated on 26th Aug believing that 'x' had also left.
We received a 'Letter before action' on the 10th Sept stating the following:-
'X' had left the premises on 27th & changed his mind & returned 10 days later. This, she said, meant that the tenancy was 'continuing on a periodic basis' & ' All tenants were liable for rent on an ongoing basis 'til she managed to remove 'X' from the premises.(could be end of year).
In addition we were all jointly liable for rent arrears of both 'X' (9mts) & 'RA' (4mts).
Given that only 'R' & myself were actually paying, it fell to us to pay the arrears which we did.
CAB & Shelter advised that the only way to end this 'periodic tenancy' was to forward 'Notice to Quit' observing correct notice period etc. I done this & the tenancy end date was 26th Oct 2017. Land lady is not accepting that the tenancy is ending & has sent further demands for full rent. I joined WhichLegal who are in the process of reviewing the case.
As you can imagine this is a rare 'can of worms'. Both 'R' & myself are already over £5000 out of pocket each & if the landlady is somehow proven lawful then financial ruin beckons. 'R' in the light of hearsay info, has decided to move back into the premises whatever advantage he believes this will give him. I, In my new flat & £800/my cannot even think along 'R's lines.
Can anyone offer any lawful or logical reason why this landlady believes that she can hold 'R' and myself accountable for ongoing rent given all of the above circumstances. Should it go to court there are additional matters which will be highlighted which will not show the landlady in a favourable light inc broken window catch leaving the building insecure which she refused to repair due to cost plus other more minor items which reflect badly on her general demeanour.

127

Dean 22nd November, 2017 @ 22:20

My son is renting a property on a 12 month minimum term shorthold tenancy agreement which is due to expire at the end of the week. The agreement allows for the monthly periodic tenancy to kick in if the tenant decides to stay past the 12 month minimum term date. However, the agreement does not indicate a notice period to end the agreement to be given apart from within the first 3 months and for when the agreement becomes periodic. Therefore we interpret this agreement as being silent for any notice to be provided should the tenant decide to vacate the property at the end of the agreed 12 month minimum term and they can do so without having to provide notice. The landlord is disputing this and it stating that he is obligated to provide a months notice. Is she right?

128

Sophie Davis 3rd January, 2018 @ 15:08

My tenants are looking to buy a house and so want flexibility in their contract which is coming to an end. We'd previously had a break clause that kicked in earlier in their contract but they want the two month notice flexibility from the start of the contract.
If we allow it to become a periodic tenancy and don't resign a new contract will it keep the two months notice period stated in the contract even though they pay per calendar month? Or can they legally just give one months' notice? Thanks for any help!

129

NiceLL 10th February, 2018 @ 05:43

I'm a nice(?naive) landlord. Tenants have been in the neighbouring house since 2012. We both send each other food etc. I could see they were a young family and struggling at times to pay so didn't have heart to increase the rent. Past 2yrs tenant has been missing payments & then paying later ( at a mortgage cost to me). Family inform me that tenant has a gambling problem (explains why i would get a text saying he'd come with rent then a no-show).We spoke abt how to allow council to pay me directly which they agreed but then reverted back again (wife set it up, hubby cancelled it). So once again chasing rent myself. They are on a periodic contract. I have asked them to leave or pay a higher rent (A becoz they are paying way below market value & B I need to increase rent due to daily mortgage charges&financial changes in my life). The rent increase is still below market rate. I wanted to serve Section21 but I'm worried as I didn't put their deposit in a DPS. I don't want to give another new 6m AST but if i did give new 6m AST, could I put rolling deposit into a DPS now? Tho he said he wouldnt sign it unless it was for 5yrs! Can I serve section21 & return deposit without being at risk of tenants claiming 2-3times the deposit? Im guessing if they refuse to move i will then have to serve section8 :(

130

Simon Pambin 10th February, 2018 @ 18:34

You're on the hook for a sanction of 1-3 times the deposit for each tenancy if your tenants decide to sue you, no matter what you do, so you may as well get the deposit protected asap and issue the prescribed information, as well as any other paperwork (such as the gas certificate where relevant) that you need to have in place before you can issue a valid Section 21. If you haven't got it all in place before you issue the S21, then it won't be valid, and you'll be another two months down the road and no closer to getting your tenants out. Given that they're not actually two months in arrears, I presume you'd be seeking a Section 8 on the basis of persistent lateness? That's not one of the compulsory grounds so can turn out to be bit of a lottery.

131

Kelly 13th February, 2018 @ 19:06

I have rented a commercial property for the last five years, we haven’t had a signed contract in place for the last 2.5 years due to damp problems at the property which we have tried on. Numerous occasions to resolve. My business partner has left because of the problems we are having and i have to leave the property because i just cant run my business from there any longer. I spoke with my landlord today who agreed to let me leave on the 04/03/2018, this conversation was then followed by an email telling me that he now doesnt agree with the verbal agreement and that i have to give three months notice. Is my tenancy now legally a periodic contract (rent paid monthly) as there are no roll over clauses or any other clauses to say anything other? So confused, I am leaving a great business because of the premises not being suitable and my landlord is threatening me with court action if i leave. Any helpful advice would be fantastic.

132

Reanne 15th February, 2018 @ 18:04

Hi, I wonder if anyone can help. I had a fixed term tenancy of 12 months which was then extended by 6 months (another fixed term) at the end of the initial 12 months with me paying £120 for the privilege of staying as well as them upping the rent.
The 6 month fixed term is up in March and I want to go onto a 1 month rolling contract to have more freedom in finding somewhere else - can my landlord/agent legally refuse me this and strongarm me into another fixed term agreement? Many thanks

133

Simon Pambin 15th February, 2018 @ 18:20

If you don't sign a new fixed term agreement then the tenancy becomes a statutory periodic tenancy by default. Your landlord can't force you into another fixed term but can end the tenancy on two months' notice via a Section 21, so it's really just a question of whether you're prepared to take the risk of having to find somewhere new at relatively short notice if the landlord gets the hump and decides to replace you with a longer-term tenant sooner rather than later.

134

TQ. 13th April, 2018 @ 20:10

Hi, I wonder if someone can help. We are close to the end of my tenants 1 year contract with 6 month break clause. I ask them if they want to renew the contract for another year and they say that were sure that during the viewing I confirmed them after the first year we were going on a periodic tenancy. This is not true but I'm sure it's been only a misunderstanding and so far they seem good tenants, but as I never used before the periodic tenancy I am a bit concerned of applying it without signing anything and I don't like the idea of a short notice of 1 month (as they pay the rent monthly). Do you know if it is possible to sign and new AST contract without the breaking clause of 6 month,only including that both parts need to give a notice of 2 month to leave?

135

vinny 14th May, 2018 @ 19:16

I have a tenency of will for land i rent the owners have gone bust so my agreement has not bin renued. For 2 yr there is no actually end date the insolvency company not saying nothing what are my rights

136

djchick16 30th May, 2018 @ 18:20

Hi there :)

I don't know if anyone can help me but I'm hoping someone can. Me and my husband are in a very bad situation. Until yesterday we both worked for the same small company (I was dismissed yesterday but am taking legal advice for unfair dismissal) My husband is there but today the boss has done certain things that probably amount to unfair dismissal), however he is also our landlord. We have been renting one of his houses since April 2015 and signed an original AST which was for 6 months I think (We never received a copy) It then reverted to a periodical and we were paying the same rent until 2 months ago when he decided to increase it by 125 pounds a month. We were not given a section 13 and nothing was put in writing, we just started paying this amount. He has now informed us that he is giving us 3 months notice to leave I presume by section 21 but we haven't received this yet. Also we never paid a deposit, no inventory was done and the gas safety lapsed on the 10th May 2018. My question is will the section 21 be valid?

Thank you for any help

137

Claire 13th June, 2018 @ 13:41

Hello
I am asking on behalf of a friend. She has a 6 month fixed term agreement back in 2016 which has never be renewed but just agreed that it has rolled on every 6 months. She paid her last 6 months upfront rent in April and is now moving to be nearer to her family. She has been advised she can give one months notice but they will not refund any of the extra rent she has paid to cover her rent until end of Oct? Can the estate agent do this as surely she should is allowed to give 1 months notice i.e. leave end of July she should get Aug, Sept and October months she paid upfront refunded to her.

138

michelle 14th August, 2018 @ 08:53

We are in the process of completing on an auction property, purchased with a sitting tenant, unable to view the house prior took a leap of faith. Went to introduce ourselves as the new landlord, the house was in a terrible state bags of rubbish everywhere no proper kitchen looked like it hadnt been touched since 1930. The tenant has been paying rent to a large property company who obviously never visited, the rent is below rent for the area but he is paying so always a good thing, we are not sure of our rights when it comes to his tenancy as it is called an Assured Periodic Tenancy, this has been a tenancy that has passed from his father to his mother and now to him. Any clarity on this matter would be rally helpful.
We want to be a good landlord and don't want a tenant living in squalor as its our responsibility to bring the property up to date and its going to be expensive.

139

FiFi 20th August, 2018 @ 00:25

Can a well known letting agent continue to charge commission on finding a tenant, after the two year contract is over and needs renewing?

Lovely tenants want to renew.

I was recently told that the Assured shorthold, 2 year contract had expired at 23 months, a month earlier than imagined.... spotted by the new member of staff at the letting agents. I was also told that whatever contract I offer the tenant, i.e. a periodic/contractual periodic or another Assured shorthold (suggested by letting agent that we could somehow slip this in after having expired the original one at 23 months), because they found the tenant, I would be charged their fixed commission rate for the duration of the tenancy.

Unfortunately I can not find the original contract, just an addendum. In which one paragraph states: ....' it is further agreed that the Letting, Renewal and Rent receipt service is x% + VAT for the duration of the Tenancy.'

The tenants want to renew, they wrote to me in the early summer. I'm happy for them to renew. I'd love not to pay a hefty percentage to the estate agent any longer. In my case, as the addendum sentence does not state ..... for the duration of the tenant's contract, I guess that I have to go with the Letting Agent for eternity? Or at least for another year or more?

Having had the place empty for a while prior to these lovely tenants moving in, due to previous tenants leaving mid year and leaving it in a state of huge disorder needing a builder and decorator etc. I didn't even imagine that I would be in a situation with a new tenant happy to renew after two years, so I didn't think to negotiate or ask about this renewal business.

Any thoughts? Any suggestions before I speak with the agents tomorrow? I have to have a call with the lettings department tomorrow, as they said that they need to know from me, which contract to go ahead with.

Thank you.

140

MdeB 20th August, 2018 @ 18:45

@Fifi 140

It depends on what your contract with the agent says.
If you cannot find it, then ask the agent for a photocopy of what you signed.

It also depends on the term granted in the tenancy agreement.

1) If the term is of the form "X months and then continuing monthly" then the tenancy continues.
2) If the term is of the form "X months", then the tenancy ends at the end of the term and either becomes a new statutory periodic tenancy (if no new agreement is signed) or a new tenancy 9if a new agreement is signed).

So, if your agent agreement says "pay for the duration of the tenancy" and case 2 above applies, then in my opinion you do not have to pay if the tenant stays (but you might if you allow the agent to issue a new tenancy agreement).

If your agreement says something like "pay whilst tenant introduced by agent resides in the property" or "pay for the duration of this and any subsequent tenancy with the tenant", then you MAY have to pay.
I have a recollection that paying indefinitely for tenant find was found to be an unfair term. I think it may have been if it extended beyond 2 years; if so, then this may be a cynical attempt by agent to circumvent the finding (they issue a new contract and the 2 years starts again).

The addendum you quote has no bearing on the issue because it is about the ongoing management, not tenant find.

So, I suggest:
1. Do not let them pressure you into agreeing that they will issue a new tenancy agreement; tell them that you need to consider your options before making a decision.
2. Find out exactly what the contract says. Do not let them explain it to you, as they will put their spin on it. But ask if there are any further tenant-find charges; they may say "no"!
3. Decide what options you have and what the implications for each are.
options may include:
- terminate agreement and manage it yourself.
- terminate agreement and find another managing agent.
- let agent issue a new fixed-term contract (but beware of long term if they are charging finder fee up-front based on the duration)
- allow tenancy to become periodic.
4. Decide what you want and negotiate with them to get a deal.
e.g. they may want further tenant find fee, but you may be able to talk them out of it by suggesting you will take your management business elsewhere.
Make sure you negotiate with someone who can make a deal, not a junior person.

5. I would also suggest posting the question of "how long can agent charge for finding a tenant" on the LandlordZone Residential Letting forum; there are people there who have greater knowledge of the law than me.

141

MdeB 20th August, 2018 @ 18:50

@Fifi 140

Also
1. Ask the agent why it was a 23 month tenancy and not 24 months as you believed they were issuing.
2. Remember that they work for you. If you instruct them to do or not do something then, as long as it is not illegal, they are obliged to follow your instruction.

142

FiFi 20th August, 2018 @ 22:36

Can a well known letting agent continue to charge commission on finding a tenant, after the two year contract is over and needs renewing?

Lovely tenants want to renew.

Unfortunately I can not find the original contract, just an addendum. In which one paragraph states: .... it is further agreed that the Letting, Renewal and Rent receipt service is x% + VAT for the

143

Fifi 20th August, 2018 @ 22:58

To MdeB
Thank you for replying to my questions. Very kind.
The estate agent didn't call today and I was so busy that I had no time to call (school holidays etc). I will have to deal with this, although I don't like to rock the boat.

I believe as you pointed out the possibilities, that no.2 applies to me. However, although the contract is now out of date and a periodic tenancy has taken place (with no contract), I wonder what does the meaning 'tenancy' mean in the estate agent's case. As the tenants have not 'moved out'. They've actually gone on holiday, as of last weekend, but not moved out. It would certainly work in my favour if the end of the first 23 month contract that ended last week, meant that the tenancy had ended. But I think the estate agent will say that tenancy in this particular case means 'still occupying the property' with a wish to continue to stay another year or two.

Hey ho.

I will ask them to send me a copy of the original full contract by email tomorrow.

I should ask the tenant what they would prefer in terms of contracts, as I have a feeling that they themselves have forgotten that they may have stipulated 23 months at the outset. I wonder if I can offer them another assured shorthand, or a contractual periodic. I don't want to scare them away, thinking that I could ask them to leave with only one months notice after the first 6 months have past.

Once I understand better where I stand - although the junior estate agent has said to me that I will need to continue to pay for the duration until they leave, as they have found the tenants and I think he believed that the contract - that is now invalid, said so.

Let me see tomorrow.

I really appreciate that you took to time to write to me. Thank you.

144

MdeB 20th August, 2018 @ 23:53

Fifi,

The contract you signed with the agent will still be valid; an agency contract is not linked to a tenancy.

I can understand not wanting to scare off tenants, so I agree with asking them what they want to do.

If the agent's contract with you refers only to the initial tenancy and not to any follow-on, then I would argue that Housing Act 1988 says that the tenancy ends at the end of the fixed term, and anything that follows is a new tenancy, and that is what you understood by the clause.

Also, when you get the contract copy (making sure it has your signature and is not their latest standard contract), find out what the termination clause is and post back here, please; it may be unfair in law.

145

Fifi 22nd August, 2018 @ 14:37

MdeB,

I've received the Terms of Business and by reading it, I think the estate Agent has covered all angles, so I will be obliged to pay them (ad infinitum it seems, there is not end to it) commission through any change of any tenancy agreement that follows on from this one. Sadly. I'm finding it impossible to cut and paste it, so I'm going to type it up for you word for word, leaving out the name of the estate agents and replacing it with (X). If you think there is a get out clause here somewhere, or a way to ever stop the continues payment then please do share. Thank you.

Here goes......

" By this agreement the Landlord is appointing (X) to find a person who will take the Tenancy of the Premises for at least an initial minimum period (or "Term"). The Landlord and (X) hope that such a Tenant will wish to continue in occupation after that minimum Term and will renew the letting, and as described below, (X) will try to secure this continued occupation. IN BOLD...... The Landlord agrees to pay (X) a commission for its services for which commission will be payable, not only in respect for the initial minimum Term, but also for any renewed letting and whether or not (X) has been involved in or helped secure such a renewal"

I've checked the Termination clause and they have this tied up neatly too!

Termination of Appointment

"You or we may at any time terminate our appointment by giving not less than 28 days prior written notice. Such notice given by either party does not affect our right to receive payment of our continuing charges as detailed under this Agreement including any extended or periodic Tenancy.

Either Party may terminate this Appointment immediately upon giving notice in writing to the other party if(in the reasonable opinion of the terminating party) any one or more of the following events is likely to occur:

a) A party making any voluntary arrangements with its creditors, entering administration or going into liquidation; or
b) A security holder taking possession, or a receiver or administrative receiver being appointments, over all or any part of the property or assets of a party; or
c) Any other similar or analogous event in any jurisdiction;
d) The other party commits a material breach of any part of these Terms of Appointment."

I'm guessing that I will need to thank you for all your suggestions of advice and I will regardless need to go ahead on this occasion and must be more careful in future, to negotiate clauses beforehand. They are naughty though as they only produce these documents once they have found a tenant and when both tenant and landlord really need to tie things up quickly to proceed.

I'm just wondering if there is ever an end to infinite commission by estate agents, in law.

Thank you MdeB.

146

MdeB 22nd August, 2018 @ 18:51

@Fifi:

Those clauses appear to have it watertight, but that does not mean they are fair.

I still think you should follow my suggestion 5 at #141, because that will get more brains on it and they may see angles that I have not. There is at least one lawyer who posts on there as well as many knowledgeable landlords and tenants.

147

Zad 26th August, 2018 @ 23:17

Hi,

Please can I have some advice on Section 21 notice.

I was initially served Section 21 notice; however, during the notice period, the property was sold to an investor buyer who wanted us to continue renting. New terms and conditions were discussed and 6-12 months tenancy period was verbally agreed with the new landlord through the letting agent and we were told the new contractual document will be issued in due course.

However, on completion of 2 months notice period, a statutory periodic tenancy continuation letter was issued by the agent. This letter had specific clause that 'your landlord is still required to serve not less than two months’ notice in writing'.

We were then told the deal fell through and the property is being put back in the market to find another suitable buyer.
We were verbally advised if it is going to be an investor buyer, they might want us to stay and continue our tenancy at the property. We were verbally told a new Section 21 notice will be issued when a new byer will make an offer.

About 5 weeks later we were told the property has been sold and the original Section 21 notice issued more than 3 months ago is still valid, and the landlord has the right to initiate legal proceeding to take the possession of the property.

We were told this is the case despite clear written clause in the Periodic tenancy document that the landlord is required to serve 2 months' notice. the agent said, he does not remember any verbal conversation with respect to issuance of a new Section 21 notice.

Please can someone advice on this.

Thank you.
A

148

MdeB 29th August, 2018 @ 08:58

@Zad,

I believe that the new landlord takes over exactly what the original landlord had, and therefore the S21 notice issued by original landlord would still be valid; but someone like Citizens' Advice or Shelter would be better placed to advise.

The purpose of the S21 would be to allow the existing landlord to gain possession if the buyer wants to live in the property; it is likely that a landlord-buyer would want to keep a good tenant, as replacement (in my experience) is costly and stressful.

If your last tenancy agreement was signed after October 2015, then I believe that a S21 notice has a validity of 6 months (i.e. if the landlord does not start court proceedings within 6 months of issue (4 months or less from the "possession required after" date in the notice), then he must issue a new S21 notice to gain possession).

149

Zad 29th August, 2018 @ 11:05

@MdeB

Thank you, very helpful.

However, what is the status of the written clause in the Periodic term tenancy confirmation letter that 'the landlord is still required to serve 2 months' notice in writing'. This letter was issued after the expiry of 2 months' deadline stated in the original S21 notice. Will this be taken into consideration if the agent decided to take matter further. Thank you Zad

150

MdeB 30th August, 2018 @ 23:54

@Zad

I would interpret the clause as being a statement of law (in a statutory periodic tenancy, the LL must give at least 2 months' notice), but the law also says that a S21 notice issued during the fixed term is effective for a subsequent spt.

151

Fifi 3rd September, 2018 @ 21:44

To MdeB (re 147)

A huge thank you for your advice and time you spent on replying to my questions. I don't know who you are or why you do this, but it was so good to have someone just listen and offer up suggestions. Thank you.

In the meantime, I have continued to have some dialogue with both the tenants, asking them what they prefer vis a vis a new contract and also with the Estate Agents, sharing my thoughts that it seems rather unfair if their commission charge will continue to remain as high ad infinitum until the tenant moves out. I mentioned that once my tenants do move out, I may be obliged to choose different agents who will decrease their commission year by year etc if they do not want to negotiate this with me for new tenants. Well, to my surprise, they contacted me today to say that as a gesture of good will they will reduce the commission by 1/2% now that two years is over and the tenants which to remain for maybe another couple of years.

Feeling much better that I have managed to get them to reduce this slightly, as it feels as though they have made an effort.

Thank you again.
All the best

152

Katalin 8th February, 2019 @ 22:10

I am not able to locate a periodic tenancy agreement form on this site. I trust this page so I’m reluctant to just download one from somewhere. Could anyone advise me on this? Thanks ps. I understand that a contract is not necessary but I prefer it so my tenant understands the terms...

153

MdeB 8th February, 2019 @ 23:51

@Katalin #153:

Why would you want one?

154

Katalin 9th February, 2019 @ 09:24

@MdeB, I would if it’s a trusted one please!

155

MdeB 10th February, 2019 @ 01:01

@Katalin #155:
What I mean is I do not understand why you would want one.
What benefits do you think it would offer?

156

MdeB 10th February, 2019 @ 10:27

However, the only difference between a periodic tenancy agreement and a 'normal' tenancy agreement is the definition of the term.

You need something like:

For a normal agreement: X months from and including

For a tenancy that becomes contractual periodic after initial term: X months from and including and continuing monthly thereafter until terminated in accordance with

For a tenancy that is contractual periodic from the start: monthly from and including until terminated in accordance with

157

MdeB 10th February, 2019 @ 10:30

in #157, "including" should have been followed by an indication that the start date is required, but it was removed by the software. I will try again.

So "including" should read "including [date]"

158

Katalin 10th February, 2019 @ 14:28

@MdeB thanks for your help. I misunderstood you the first time, sorry. My tenant is not the best one and also not the sharpest one. I want him to have it in writing that he’s on a month to month rolling contract and if he doesn’t pay (which has happened lots of time so far) he’ll be out with one month notice.

159

MdeB 13th February, 2019 @ 00:45

Re #159:

It doesn't work that way.
The tenant can give one month notice, but LL still has to give 2 months notice via S21 notice AND S21 cannot be used during first 6 months since start of tenancy.

What you want is for tenancy to become statutory periodic (or contractual periodic, but it is too late for that now).

160

Katalin 13th February, 2019 @ 08:01

I realised this in the meantime and I bit the bullet and told the tenant that I was wrong and we don’t need a new contract. So I’ll just let it slide into statutory periodic. Thanks for your help, I appreciate it.

161

C.A.E 13th August, 2019 @ 14:02

Hi,
I need some help and advice please.I'm a landlord and the first 2 years with my tenant we had an AST and the deposit was protected,but at the end of the second year we agreed to let the tenancy run between us as a "Rolling Contract" or [Periodic Tenancy as I now know]as the tenant wasn't sure of staying or any future plans etc..Suffice to say I lapsed the Deposit Protection and the periodic tenancy ran for a further 2 years!
The relationship with the tenant was absolutely fine throughout the 4 years and even up to exit, a months notice was given by the tenant the exit obligations were all met etc on both sides and the deposit was returned in full [£1400] albeit me mentioning that I had lapsed the deposit protection,still no problems.Now 10 weeks later I receive a letter before action [template] stating my failure to protect the deposit for the remaining year/s and pursuing me for up to 1 to 3 times the deposit amount!............Where do I stand?
Advice greatly appreciated asap.

162

David 14th August, 2019 @ 07:01

@CAE

Please post to the correct blog post.

Cheers

David

163

Jeany 30th August, 2019 @ 14:40

I have had the same tenant for 20 years. He has always been on housing benefit which has been received every 4 weeks in arrears. However, due to finances I now need to sell the property. I do feel for the tenant as he thought this was his forever home but my finances are forcing me to sell.

When the tenancy started the tenant paid a small deposit and had an assured shorthold tenancy, which obviously is now a periodic tenancy. Twenty years ago there was no such thing as securing the deposit, energy certificates or the issuing of the various forms/notices at the start of a tenancy.

Please clarify which section 21 form I need to issue.

164

David 30th August, 2019 @ 16:52

@jeany

There is only one Section 21 form to be used, the 6a but you must make sure that is the version with reference to Tenant Fees Act, best place to get is is from the Gov website as some local authorities are advising tenants to reject 3rd party ones even thought they are legal is properly constructed

https://www.gov.uk/guidance/assured-tenancy-forms#form-6a

You will need to comply with the prerequisites shown on the front page of the form

I am afraid that although the Deposit Legislation started in April 2007, that does not necessarily mean you did not need to protect it later.

There have been a number of amnesties, case law impacts and the deregulation Act, it will all depend on the number of AST's the tenant had and when they went SPT, have a look at the pages below and feel free to contact me using the information shown on those pages.

https://www.propertyinvestmentproject.co.uk/blog/i-havent-protected-my-tenants-deposit/

https://www.propertyinvestmentproject.co.uk/blog/tenant-threatening-legal-action-tenancy-deposit/

165

MdeB 30th August, 2019 @ 21:56

The following assumes that the tenancy IS an assured shorthold, and it became periodic before 6 April 2007.

You are not required to protect the deposit; there are no penalties for not having done so.
However, a valid S21 notice cannot be issued if you hold an unprotected deposit.
Your options are
1: return the deposit;
2: protect the deposit.
Then issue S21 notice (at least a day later).

"The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015" introduced requirements for:
- EPC
- GSC
- How to rent
However,section 1 says they apply ONLY to tenancies granted on or after 1 October 2015 AND not to statutory periodic tenancies that arise following the end of a tenancy granted before 1 October 2015.
Therefore they are not relevant and it is not necessary to serve them.
BUT courts and tenant advisers may not understand this subtlety, so if you can serve them, then do so (and do not issue S21 notice until at least the next day).

The form of S21 notice to use is also open to debate.
The Government advice is that you do not need any special form for an old tenancy.
However, there is a subtle legal argument that says only the prescribed form is valid.
Therefore I would suggest using the prescribed form 6A.

BUT using form 6A may also confuse tenant advisers and judges, as it is written for tenancies that started after September 2015 (so it suggests that GSC, EPC and How to Rent must have been served before S21 is issued).

Given the potential for courts to mis-understand the requirements for an old tenancy (i.e. believe that the GSC, EPC and HtR requirements apply) and incorrectly reject your S21 notice, and my feeling that you are not familiar with the law or the legal processes, it may be advisable for you to engage a solicitor experienced in landlord and tenant law to guide you through the process and to make appropriate representations should the judge fail to appreciate the (lack of) requirements for a pre-2015 tenancy.

If the tenancy became periodic after 5 April 2007 and before 1 October 2015, then the approach is the same, but you were required to protect the deposit and you may be open to penalties for not protecting the deposit.

If the tenancy became periodic after September 2015, then the GSC, EPC, and How to Rent are mandatory and you will be open to penalties for not protecting the deposit). Also a GSC (if required for the property) must have been served before the periodic tenancy started; if not, then (subject to the result of an appeal scheduled for January 2020) you can never issue a valid S21 notice.

If the tenancy started before 1997, then it may be an assured tenancy. If it is an assured tenancy, then S21 cannot be used.

166

Thea 17th October, 2019 @ 10:40

I didn’t update the information with mydeposits when my tenant moved beyond the 6 months of the agreement into a periodic tenancy. They are now saying the depost is un-protected and I have to put in a new protection, which will be late. My bad, they warned me but is this the case?

167

The Landlord 18th October, 2019 @ 07:59

@Thea
Nope, you don't need to register the deposit. The answer to your question is here: https://www.tenancydepositscheme.com/news/blog/asktds-do-i-have-to-re-register-my-deposits-every-year/

168

shan 18th October, 2019 @ 15:44

Hi, we moved to the current property on 15/07/2018 and in February 2019 our landlord issued the section 21 and gave 2 months time to leave until 06/04/2019. but still now we haven't moved out. now we have received a defence form from the court to fill and send it back. Our assured tenancy agreement ended on 15/07/2019. We still keep paying rent every 14th. Now we have found a property which will be available to move out on 23rd of November 2019. Do we still need to give landlord 1 month notice ? If yes when we should give the notice to move out on 23rd of November?

169

David 18th October, 2019 @ 17:50

@Shan

The terms of the SPT are identical to the preceding AST except in term and notice requirements, where you must give a months notice if you pay monthly.

However, considering that the Landlord has issued you with a notice to quit I am sure that you can arrange to leave of a mutually agreeable date.

I would say that it would be sensible to give your notice, next week on the 22nd October 2019, it at least means you can't be held for longer (assuming your payment period is monthly).

It may be that your Landlord's S21 was invalid, there are strict prerequisites such as deposit protection, Prescribed information, EPC, How to Rent document and Gas Safety done properly.

That is something I would be please to help you with via the forum private message as this is an open blog. This may be necessary to avoid you getting hit for costs and his Court fee if you do not have a valid defence.

IF you wish to contact me via the forum please use the instructions in post 703 on the page below

https://www.propertyinvestmentproject.co.uk/blog/i-havent-protected-my-tenants-deposit/

170