assignment of periodic tenancy

Tenancy-at-Will vs Periodic Tenancy: Definition, Differences & Termination Notice

Tenancy-at-will vs periodic tenancy: definition, differences, termination notice, differences between tenancy at will and periodic tenancy.

Tenancy at will and periodic tenancy are two types of tenancy agreements. While both are legally binding contracts, the primary distinctions are their fixed term and automatic renewal.

Periodic Tenancy

A “Periodic Tenancy” is a type of rental arrangement in which a tenant occupies a property for a recurring, fixed period, such as monthly, quarterly, or annually. The tenancy automatically renews at the end of each period, providing a structured, ongoing rental arrangement. Periodic tenancies are common in residential and commercial leasing and offer both landlords and tenants certain advantages and predictability.

Tenancy at Will

“Tenancy at Will” is a type of rental arrangement in which a tenant occupies a property with the consent of the landlord without a fixed-term lease agreement. In a tenancy at will, the tenant has the right to possess and occupy the property for an indefinite period, and both the landlord and the tenant have the flexibility to terminate the tenancy at any time, with or without notice.

Tenancy-at-Will vs Periodic Tenancy

Here are 5 key differences between a tenancy at will and a periodic tenancy:

Tenancy at Will vs Periodic Tenancy” in a table format:

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Guide to contractual and statutory periodic tenancies

Most tenancy agreements are made for a fixed period of time. These fixed terms are usually for a 6 or 12 month period, though this can be for longer or shorter depending on need. 

However, once this fixed term ends the tenant does not have to leave the property. Every tenant with an assured or assured shorthold tenancy (AST) is entitled to remain in the property on a periodic tenancy, until either they end the tenancy and leave or the landlord regains possession via a court order.

To ensure this, there are two different types of periodic tenancy that will follow on from the fixed term; contractual and statutory periodic tenancies. Each has specific differences that affect landlords, with benefits and drawbacks to each.

This guide will act as a primer for landlords and agents in deciding which type of periodic tenancy to use if not using the NRLA assured shorthold tenancy agreements, and how to identify what type of periodic tenancy you have.

Join the NRLA today for unlimited access to resources, guides, templates, and advice that will support you throughout your tenancy and beyond.

What is a contractual periodic tenancy?

At its simplest, a contractual periodic tenancy means that the tenancy runs from month to month, week to week, etc, agreed as part of the tenancy agreement. This will mean that a clause will be present in the tenancy agreement saying that periodic tenancy will follow on from the fixed term. 

Typically, these tenancies are written as continuations of the fixed term. They will use phrases like 'continue on as a periodic tenancy' or 'carry on from month to month after the end of the fixed term'. In these cases, the fixed term and the periodic portion are all part of the same tenancy, which is very important for council tax purposes. Reference to contractual periodic tenancies in this guide are to this type of periodic tenancy clause.

What is a statutory periodic tenancy?

Many tenancy agreements do not contain any clause specifying how the tenancy will continue after the end of the fixed term at all.

For these type of tenancies, Section 5 of the Housing Act 1988 steps in to create a brand new tenancy agreement known as a statutory periodic tenancy.

This tenancy will run from month to month, week to week, etc based on the last rent paid. For example, if the tenant pays monthly in the fixed term, then the periodic tenancy will run from month to month. Or if your tenant pays 5 months up front and then makes one monthly payment in the fixed term, then it will run from month to month.

The key point to understand about a statutory periodic tenancy is that it is a brand new tenancy that is separate from the original fixed term. This is very important for council tax, deposits and the service of documents.

How do I spot the difference?

The first thing to do is read your tenancy agreement to see if a clause detailing the periodic tenancy exists. If one does, then it will normally be a contractual periodic tenancy.

If no clause exists, or the clause specifically states that the tenancy will be a statutory periodic tenancy or arise under Section 5 of the Housing Act 1988, then it will be a statutory periodic tenancy.

What type of periodic tenancy do I have if I do not grant a fixed term agreement?

In some rare cases, tenants may move into a property without first being granted a fixed-term tenancy. Typically these tenancies have no written agreement and usually are the result of more informal arrangements.

As a statutory periodic tenancy can only be created through the expiry of a fixed-term agreement, these tenancies are still classed as contractual periodic tenancies.

However, many of the benefits associated with contractual continuations do not apply to these informal contracts, particularly where they are verbally agreed. The NRLA strongly advises its members to always agree a tenancy in writing so the terms and conditions are clearly laid out and everyone understands their obligations.

What type of periodic tenancy does the NRLA agreement have

All of the NRLA assured shorthold tenancy agreements create a contractual periodic tenancy that continues on from the initial fixed term.

Along with a host of other documents, these agreements are free to download for all members of the NRLA.

Key things to consider

There are a number of significant differences in how various laws apply to the two different types of periodic tenancy types. This section will outline the main differences so you can plan accordingly.

Council Tax liability during a periodic tenancy

If the tenancy is for the whole of a house or flat rather than a room, and it is for a fixed term of at least 6 months, then the tenant will be liable for the council tax until the end of that term even if they move out without giving notice.

If at the end of this fixed term, the tenancy continues as a contractual periodic tenancy, then the same rules apply. The tenant(s) will be liable for the council tax until the end of their notice period even if they leave early in their notice.

As statutory periodic tenancies are brand new tenancies there is no 6 month fixed term, therefore the tenants are only liable for council tax while they are living in the property. If a tenant abandons the property without notice inside the statutory periodic tenancy then landlords may find themselves having to pay to regain possession, while also paying the council tax.

Similarly, tenancies that begin as periodic tenancies or those with a fixed term of less than 6 months will follow the same rules as a statutory periodic tenancy.

Deposit protection and penalties

Provided the deposit is protected in a scheme and the prescribed information is served on all relevant parties then there is no difference between the two types of periodic tenancy.

However, if the deposit has not been protected correctly the law interacts differently with each.

For contractual periodic tenancies, the landlord will only be liable for one to three times the deposit as a penalty. This is because there is only one tenancy in which they are in breach of; the combined fixed term and periodic tenancy. For statutory periodic tenancies, there are two tenancies so the landlord can face a penalty of 2-6 times the deposit as a penalty for non-compliance instead.

For contractual periodic tenancies, where a landlord has protected the deposit late inside the original fixed term then the landlord will have to return it before serving a section 21 notice. This is different from statutory periodic tenancies, where they should be able to serve a section 21 notice from the start of the new periodic tenancy provided the deposit is protected and the prescribed information served before it starts.

Electrical safety during a periodic tenancy

In England, for any new tenancy created on or after 1 July 2020 and from 1 April 2021 for existing tenancies, you are required to ensure the electrical installations in your property are safe to use. This is achieved by having a competent person inspect the property and provide you with an electrical installation condition report (EICR) stating these installations are safe to use.

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 also set out a number of different requirements around providing copies of the EICR to relevant people:

• The EICR must be given to all of the tenants before they occupy the property.
• When you replace the EICR you must provide a copy of the new report within 28 days of the inspection.
• If a tenant requests a copy of the EICR in writing, you must also provide them with one within 28 days.
• If the local authority requests the EICR you must provide them with a copy of it within seven days or face potential penalties.
• Any prospective tenants who request a copy in writing must be provided one within 28 days.

For periodic tenancies, the choice between contractual and statutory periodic will affect when these regulations come into force for you.

Statutory periodic tenancies that start at any point from 1 July 2020 onwards will have to comply with the regulations from the point the statutory periodic tenancy starts. You will be required to have an EICR ahead of the tenancy beginning.

For contractual periodic tenancies that follow on from a fixed term, the regulations will not apply to your tenancy until 1 April 2021 even if your fixed term ends before that date.

Service of section 21 notices usually

Where a tenancy is running on as a contractual periodic tenancy then the landlord will have to follow the rules of section 21(4) of the Housing Act 1988. Landlords of a statutory periodic tenancy can follow the easier rules of section 21(1) instead.

In England, the only difference between the two rules is around the length of the notice in certain circumstances. The notice will be the same otherwise.

For statutory periodic tenancies, the section 21 notice period will usually be simply two months or more if the landlord wishes. Currently longer notice periods are in place due to the coronavirus legislation however.

For contractual periodic tenancies, it is normally the same. However, if a landlord is taking rent quarterly or 6 monthly then the notice period must be either three months or six months long. The NRLA recommends landlords take payments monthly, weekly, or fortnightly to avoid this issue.

Service of 'How to rent: a checklist for renting in England'

Landlords will often find they are legally required to be serve certain documents at the start of a given tenancy. For example,  'How to rent: a checklist for renting in England'  should be served at the start of a tenancy. Crucially it also needs to be served at the start of any subsequent tenancy if there has been an update to the document.

As a statutory periodic tenancy is a subsequent tenancy, landlords have to check at the start of the new tenancy to make sure they have served any updates on their tenants. If not they won't be able to successfully serve a section 21 notice.

Contractual periodic tenancies are not new or subsequent tenancies. As such landlords do not need to check if there has been an update or serve any extra copies on the tenant.

Increasing the rent in a periodic tenancy

The rules on rent increases work very differently for the two types of periodic tenancy.

For contractual periodic tenancies you may insert a rent review clause into your agreement. Provided this is a fair term this increase will be binding on the tenant and the landlord. The landlord can then follow the terms of the clause to increase the rent. 

Where no rent review clause exists in the tenancy a landlord may use the prescribed section 13 (form  4) to increase the rent but not until the fixed term is over and 12 months have elapsed since the tenant moved in.

For tenants on statutory periodic tenancies, landlords may not create a rent review clause as the fixed term and statutory periodic tenancy are separate. They must use the Section 13 form instead. However, unlike the contractual periodic tenancy this can be served as soon as the fixed term is over, even if only 6 months have passed since the tenants moved in.

Requirements to have an EPC

An EPC is valid for 10 years and is required every time a landlord markets a property or face the potential of a fine. This includes the granting of a statutory periodic tenancy.

Under the Minimum Energy Efficiency Regulations, landlords cannot rent out properties with an F or G rating unless they have managed to secure an exemption or the property does not require an EPC.

As a result of these two pieces of legislation, landlords of tenancies that will become a statutory periodic tenancy will have to get an EPC and may not be able to rent out F or G rated property without first spending £3500.

For landlords with tenancies turning into contractual periodic agreements, the EPC can lapse until the next time they agree a new tenancy or rent to a different tenant.

Landlords should bear in mind that new legislation often talks about the creation of 'new' tenancies and this often will include statutory periodic tenancies. As such, landlords who use statutory periodic tenancies may find they have to comply with new legislation sooner than with a contractual periodic tenancy.

• Related Content
• Resources Index
• Pre-tenancy
• Creating Your Tenancy
• Managing Your Tenancy
• Ending Your Tenancy
• Looking After Your Property
• Licensing and Local Government
• Energy Efficiency

periodic tenancy

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A periodic tenancy is a type of lease agreement that continues for successive periods until the tenant gives the landlord notification that they want to end the tenancy . This tenancy can be created expressly , or by implication , such as when a lease does not mention the duration of the tenancy, but arrangements were made for payments to be made at certain intervals (e.g. month-to-month ). For termination of a periodic tenancy, notice must usually be given at least equal to the length of the period of the tenancy itself, unless the parties agree to different terms for termination .

[Last updated in January of 2024 by the Wex Definitions Team ]

• landlord & tenant
• property law
• wex definitions

Assignment and succession of tenancy

Produced in partnership with morayo fagborun bennett of gatehouse chambers and daryl bigwood of cobb warren, introduction.

This Practice Note discusses assignment and succession of tenancy in England, with reference to the Housing Act 1985 (HA 1985), the Localism Act 2011 (LA 2011) and the Housing Act 1988 (HA 1988). It explains that assignment of a secure periodic tenancy is prohibited except in three situations. With effect from 1 April 2012, a registered social landlord can include express provisions in their tenancy agreements granting additional succession rights for assured tenants.

As of 1 December 2022, tenancies and licences of dwellings in Wales are governed by the Renting Homes (Wales) Act 2016 (RH(W)A 2016) (subject to certain exceptions). Secure tenancies may no longer be created and existing secure tenancies will convert automatically into occupation contracts. The terms of existing and new tenancies must be considered in the context of RH(W)A 2016 in order to establish whether or not they are occupation contracts for the purposes of RH(W)A 2016 and, if so, what kind of occupation contract. Tenancies and licences which are occupation contracts must

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Gatehouse Chambers

Morayo specialises in all areas of landlord and tenant and property law. Recent cases include Charalambous v Ng [2014] EWCA Civ 1604 (tenancy deposit schemes), Coope v Ward [2015] EWCA Civ 30 (easement of support and measured duty of care) and Farah v Hillingdon LBC [2014] EWCA Civ 359 (intentionality and homelessness). She also regularly acts in disrepair and dilapidation proceedings, service and estate charge disputes and residential and commercial lease renewals. Morayo’s public law practice includes community care, Court of Protection, deprivation of liberty, welfare benefits, homelessness, judicial review and discrimination law. Recent cases concerned the community care needs of life sentenced prisoners, a deprivation of liberty case on the interface between the MCH and MCA and a test case on the lawfulness of the current practice adopted by decision makers in Employment Support Allowance assessments. Morayo’s commercial practice covers contractual disputes in the property and employment sectors advocating in the courts and tribunals. A speciality is cases involving multiple discrimination complaints. Morayo came to the law with a background in philosophy and theology, graduating from St Hilda’s College, Oxford in 2000 with a 2:1. Her Masters in Crime, Human Rights and the International Community achieved a Distinction. She attained a commendation in the Common Professional Examination and was graded outstanding on the Bar Vocational Course in 2004.

Senior Associate , Cobb Warren

Daryl Bigwood is a Senior Associate at Cobb Warren. Cobb Warren are a boutique firm, based in Bristol, specialising in housing management for social landlords.  Prior to joining Cobb Warren, Daryl was the Principal Solicitor for Litigation at Swindon Borough Council. In this role he oversaw the Council’s non-social care litigation including anti-social behaviour, housing, criminal prosecutions, public law and judicial review, and employment.  Daryl also advised on the Council’s regulatory functions (such as health & safety, licensing, trading standards, and environmental health). Daryl’s specific interest is in anti-social behaviour and proceedings under the Anti-social Behaviour, Crime and Policing Act 2014. Daryl has appeared before the County Court (both on appeal and at first instance), the Court of Protection, the Family Court, the Magistrates’ Court, the Coroners Court, the Employment Tribunal, and the First-tier Tribunal (Property Chamber). Daryl has had conduct of cases in the High Court and the Court of Appeal. Daryl obtained permission to appeal, and permission to assign the appeal from the County Court to Court of Appeal, in the case of Swindon Borough Council v Abrook [2024] EWCA Civ 221. In the unreported County Court case of Swindon Borough Council v Douglas Wood, Daryl’s argument that the Council was a ‘person’ for the purposes of Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 and that a refusal to permit a landlord access to undertake gas safety inspections could amount to anti-social behaviour under said Act.

Related legal acts:

• Housing Act 1985 (1985 c 68)
• HOUSING ACT 1988
• Housing Act 1988 (1988 c 50)
• Housing Act 1996 (1996 c 52)
• Law of Property (Miscellaneous Provisions) Act 1989 (1989 c 34)
• Law of Property Act 1925 (1925 c 20)
• Localism Act 2011 (2011 c 20)
• Matrimonial Causes Act 1973 (1973 c 18)
• Rent Act 1977 (1977 c 42)

Key definition:

Assignment definition, what does assignment mean.

An assignment is 'an immediate transfer of an existing proprietary right, vested or contingent from one party to another'. Assignments can occur by consent or by operation of law.

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Assignment Of A Lease: Everything You Need To Know! 📃

The assignment of a lease is a legal process that allows a tenant to transfer or “sell” their lease to another party. This can be a complex process, but understanding the steps involved can help make it easier. Whether you are a landlord, tenant or prospective lease buyer or “assignee”, this guide will provide you with the information you will need to navigate the assignment of a lease.

As an existing leaseholder or commercial tenant, there are plenty of reasons why you might want to exit your business lease early. Perhaps your current premises are no longer suitable for the needs of your growing business, or maybe your business is in financial difficulty, and you need to find a lease with more favourable terms.

There are also a range of options when it comes to deciding how to exit a lease or change the occupational status of a property before the specified lease term end date.

Some of the most common include:

• Assignment of a lease, which involves selling or passing the existing lease (and remainder of the lease term) onto another party or business, who assume the role of occupational tenant;
• Terminating the lease by exercising a break option (either a rolling break option or termination of the lease on a fixed break date) by serving a formal notice on your landlord in accordance with the break clause of your lease; or
• Subletting your premises or a permitted part (with the prior consent of your direct landlord) and adopting the role of intermediate landlord yourself.

Unfortunately, exiting a lease early is not always a simple process and can be costly. A lease is a legal contract, with binding provisions and if you breach its terms, your landlord could take you to Court, sue you for damages, take remedial action and/or forfeit the lease and take back possession of the premises, depending on the nature and extent of the breach in question. Opting to pursue a process such as assigning the lease to a new tenant can make exiting a lease early possible in theory, but there are many factors that should be considered before beginning this process.

If you are thinking of trying to leave your lease early, it is advisable to obtain independent legal advice from an appropriately experienced commercial property solicitor before taking any action.

If you require legal advice or assistance on getting out of a commercial lease please call us on 0800 086 2929 , email [email protected] or complete our Free Online Enquiry Form .

In addition to office meetings, we also offer remote meetings via telephone and video conferencing software so can assist you wherever you are based.

What is assignment of a lease?

The process of assignment of a lease is essentially selling the lease to a third party (the “assignee”).

If you are a commercial property tenant, your lease likely contains a clause that would in principle allow you to assign your lease to a new tenant, subject to receiving your landlord’s prior approval and further subject to complying with certain conditions; these would usually be set out in your lease and commonly involve any number of the following:

• You as outgoing tenant providing an Authorised Guarantee Agreement (or AGA) for New Leases (post-1995), if it is reasonable in the circumstances to provide one, by way of a guarantee of the new tenant’s (assignee’s) payment of the lease rents and performance of the lease covenants going forward; and/or
• Provision of a Guarantor of requisite standing from the incoming tenant (assignee), being an individual, Director or Company, dependent on the landlord’s specific requirements; and/or
• Provision of a Rent Deposit (commonly equivalent to 3-6 months’ worth of the annual rent prescribed by the existing lease) for the landlord to hold as security; and/or
• Modern leases usually reserve a right in addition for the landlord to impose any further conditions that would be reasonable in the circumstances. Your landlord will expect this new tenant to meet the same expectations they originally set for you, and you will probably need the landlord (or indeed superior landlord’s) consent in writing before the assignment can be completed. The process for obtaining the landlord’s consent to the arrangement usually involves providing references for the proposed assignee, evidence of their financial viability and ability to comply with the lease covenants, payment of the landlord’s legal or other professional costs (e.g those of their surveyor) and the landlord being joined to a formal Licence to Assign, which would document their consent to your proposed assignment.

Whilst  your landlord is usually obliged not to  unreasonably withhold or delay their response to your application or their consent to  the proposed assignment, they are not guaranteed to provide consent and are under no obligation to give their consent if the new tenant does not  meet their standards or in the event that you cannot sufficiently evidence the proposed assignee’s ability to pay the rent(s) and comply with and perform the tenant covenants set out in your lease – so it would be  wise to be fully informed and selective  regarding the nature and identity of the proposed assignee and confident in their status and ability, in advance of you approaching your landlord with your application .

There are likely to be restrictions regarding if and when you can assign your lease, specified within the provisions of the lease document. Some common restrictions include not allowing lease assignments of part only of the premises (as opposed to the whole), if the term  is for a short period only, and not allowing the lease to be assigned if the lease would be due to end imminently, or indeed if there is a material ongoing breach of the lease terms, such as allowing the property to fall into disrepair or significant rent arrears.

Once a lease has been assigned, the assignee will become the new tenant and will be responsible for payment of the lease rent(s) and ensuring compliance with all of the tenant’s obligations in the lease, including covenants in relation to repair and maintenance of the property.

What checks will a landlord make before permitting assignment of a lease?

Before consenting to the assignment of a lease to a new tenant, your landlord will want to carry out checks to ensure the tenant you have found is a suitable replacement tenant. These checks can include:

Financial status

Your landlord will want to see evidence – usually in the form of business bank account statements – that the new tenant is an active registered company in a strong financial position.

Statements from previous landlords that the tenant has leased property from, trade references from suppliers or other professional references (for example their accountants or banking manager) will be required to show that the tenant is reliable and doesn’t have a history of missing payments or otherwise neglecting their responsibilities as a tenant or business client.

Proposed use of the premises

Your landlord will probably be looking for a new tenant to intend to use the premises in broadly the same way as you have done in the past as the lease will specify what use is permitted and if there are any restrictions on usage.

If the use of the premises is to be altered or updated it is imperative that a change of use application is made to the landlord and to the extent necessary, the local authority or planning authority. Proper consents or planning permission(s) are to be sought in advance from the local or planning authority and if approved and required, a lease variation reflecting the change of use documented in writing; for example, these provisions could form part of the Licence to Assign, to which the landlord would be joined as a party.

Likelihood of requesting alterations to the building

Your landlord will require advance notice of any alterations or fitting out works the new tenant may wish to make at the premises, and in some cases written permission in the form of a Licence to Alter, setting out plans, specifications and method statements will be required; so it would be good to have these documents prepared in readiness, for the landlord to approve. It is likely that a landlord could withhold their consent for assigning the lease to any tenant intending to make large-scale or structural changes to a property, or those that would adversely impact the energy efficiency of the property (or building of which it forms part)  and especially if the proposed plans vary significantly from the remit of alterations that are generally permitted in principle under the existing lease.

What liabilities will you have when assigning a lease?

It is important to recognise that the assignment of a lease to a new tenant does not automatically exempt you from all liabilities related to that tenancy and the property going forwards. In fact, once the lease assignment is complete you can still be liable should the new tenant miss any payments or otherwise breach the terms of the lease.

The nature and extent of what you could be held liable for depends on when your lease first began. If you entered your lease before 1 st January 1996 (Old Leases) you, as original tenant, will remain liable for all payments due under the lease and performance of the lease covenants for the duration of the lease term including from any subsequent tenants– even if you no longer occupy the property and if the lease is assigned several more times after you. This doctrine is known as “privity of contract” and is usually dealt with by subsequent tenants entering into an express indemnity covenant with the original/former tenant, establishing a chain of indemnity covenants, where there are a series of subsequent lease assignments

For “New Leases” that were entered into after 1 st January 1996, the Landlord and Tenant (Covenants) Act 1995 applies and for such modern leases, as outgoing tenant you would (if reasonably required in the circumstances) be required to sign an Authorised Guarantee Agreement (AGA). This means you would guarantee rental payments and compliance with the tenant covenants of the lease for the next tenant (your assignee and direct successor), but not any further tenants. An AGA may also provide the landlord with the option to require you to take on a new lease (on the existing terms) or pay the landlord a lump sum, often equivalent to 6 months’ worth of the annual rent.

What does lease assignment cost?

On the other hand, if the rent under the new lease is below the market rate, the new tenant may instead want to pay you a premium. These are commercial terms that a local valuation agent or surveyor would be best placed to provide you with input on.

It is highly recommended to involve your solicitor (and consider the cost of their advice) when opting to pursue a lease assignment, so as not to inadvertently break the terms of your lease and potentially leave yourself open to court action or forfeiture of your lease, from your landlord. You may also be required to cover your landlord’s legal costs and other professional fees (e.g. the fees of their agents and/or surveyors) in consideration of your application for lease assignment.

How to get out of a commercial lease – what are the alternatives?

Assignment of a lease is not the only way to exit a commercial lease and depending on your circumstances, the provisions of your lease and in the context of your professional relationship with your current landlord, it may not always be the best commercial option for you.

Some alternative ways to get out of a commercial lease early include:

Exercising a break option

Some leases incorporate a “break clause” or early “break option” which offers one party or both parties the opportunity to end the lease early in certain circumstances. Read your lease carefully to check if it contains a clause such as this, and if it does, what terms and conditions are involved, for example do you have the benefit of a rolling break option or is a fixed break date specified? Any time limits specified in the lease, provisions for giving of notice and compliance with any conditions must be strictly followed, in order for the break option to be valid. It is worth mentioning that business leases benefiting from the protection of the security of tenure provisions of the Landlord and Tenant Act 1954 cannot contain a break option for the landlord.

Negotiating a lease exit and surrender

If your contract does not include a break clause, your landlord may still be open to you exiting the lease early by way of lease surrender, subject to payment of a lump sum, as consideration. You would need to negotiate the specific terms of your exit and your landlord may require a pay-out to offset the inconvenience of having to market the property again, their loss of guaranteed rental income and to cover any dilapidations. You would enter a formal Deed of Surrender with the landlord.

Compared to lease assignment, negotiating an exit from your lease should provide a clean break with no further liabilities, but we would recommend seeking legal advice to confirm that you were exiting the contract cleanly.

Subletting the premises

A final option to consider when looking at how to exit your commercial lease early is subletting. If your contract allows it, you can take on the role of intermediate landlord by finding and leasing your property to a new subtenant.

You can use the rental income received from your new direct tenant to cover your own superior lease rent payments and obligations, but in return you would be expected to take an active role managing the property and deal with the sub-tenant directly, ensuring they comply with any superior covenants and requirements of the landlord and you would be required to promptly arrange remediation of any breaches.

You will need to comply with the provisions of your existing lease with regard to subletting which would usually include obtaining your direct landlord’s prior written consent to the arrangement, payment of their legal and/or other professional fees (e.g. surveyors costs), seeking their approval of the form of sublease and entering into a Licence to Sublet.

Need assistance with assignment of lease?

Exiting a lease early can be a complex process, whether you choose to do so by arranging the assignment of your lease or by one of the other means mentioned above.

Lease assignment is an effective way for tenants to exit a commercial lease early. However, this can be a slow process and you will incur costs.

Contacting a solicitor at an early juncture is advisable so that you are appropriately advised at the outset of any key considerations and potential pitfalls. For example, even though you are selling the lease, you could potentially remain liable afterwards; dependent on the age of the lease and whether or not you have entered into an AGA.

Gurkiran Notay is a Senior Associate in our Commercial Property Department and has a wealth of experience in dealing with commercial lease assignments.  She assists and advises clients across the UK.  In addition to office meetings in Elstead, Surrey, Gurkiran offers remote meetings via telephone or video conferencing software so would be pleased to assist you wherever you are based.

Make a Free Enquiry

If you are considering how to get out of a commercial lease or have any queries relating to any of the issues discussed in this article, please get in touch with our of our experienced property lawyers by calling 0800 086 2929 , emailing [email protected] or completing our Free Online Enquiry Form .

The content of this article is for general information only. The information in this article is not legal or professional advice. If you require legal or professional advice you should obtain independent expert advice from qualified commercial property solicitors such as those within our firm .

Call us 24/7 on 0800 086 2929 or complete our Free Enquiry Form below

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Periodic Tenancies Explained, Including The Advantages & Disadvantages

Page contents

What is a periodic tenancy / rolling tenancy agreement, contractual periodic tenancy vs statutory periodic tenancy.

• When & how does a Periodic/Rolling Tenancy begin?
• What do I need to do when my tenancy becomes periodic?

When & how does a Periodic/Rolling Tenancy end?

What are the advantages of a periodic/rolling tenancy, what are the disadvantages of a periodic/rolling tenancy.

An assured shorthold tenancy automatically becomes a “ periodic tenancy ” (also known as a “ rolling tenancy “) if:

• new contracts are not signed after the fixed-terms expire in the original Tenancy Agreement ;
• the same tenants remain the occupants.

In this case, all the same terms and conditions apply as in the original agreement, but the only difference is that the tenancy becomes periodic (in other words, there is no fixed term like 6 or 12 months).

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, then the contract will run on a month-by-month basis. Same principle applies if the rent is paid on a weekly or bi-weekly basis.

Many landlords and tenants 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 the case!

*deep breathes*

I’ll do my best to explain it like you’re a football hooligan and/or a 5yr old, because apparently it’s not all that easy to digest.

There is a small nuance when it comes to periodic tenancies, because it comes in two flavours. If you have created a Periodic Tenancy, it will be one of the following:

Contractual Periodic Tenancy

Statutory periodic tenancy.

A contractual periodic tenancy exists when both landlord and tenant have previously agreed in contract that the tenancy will become a periodic tenancy after the fixed term expires.

Key point: a “contractual periodic tenancy” does not start a new tenancy, it’s a continuation from the previous fixed tenancy.

A tenancy can become a contractual periodic tenancy in three ways:

• 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). This is very common, so it’s worth reading your tenancy agreement for any clauses covering what happens after the tenancy expires.
• By getting the tenant to sign a periodic tenancy agreement when the fixed term contract is shortly due to expire.
• It is possible to 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.

If any of the above apply, then the tenancy does not end, but continues on a periodic basis, as set out in the agreement. Normally this will be for a monthly periodic tenancy (because as mentioned, that’s the most common frequency rent is paid).

An assured shorthold tenancy automatically becomes a “Statutory periodic tenancy” if no previous Contractual Periodic Tenancy has been agreed upon.

Key point: a new tenancy is created.

So what does this all mean in practical terms?

As a Statutory Periodic Agreement is the start of a new tenancy (unlike a Contractual Periodic Agreement, which is a continuation of the original tenancy):

• If in England, the landlord will need to re-issue the “How to Rent” Guide if it’s been updated since it was first issued.

For what it’s worth, this article by TDS (tenancydepositscheme.com) says the following on the matter:

If the deposit is held in either TDS Insured or Custodial scheme, the deposit is protected until the tenancy ends. As the tenancy turning periodic does not indicate the end of the tenancy, then the deposit would not need to be re-protected provided the tenant(s), landlord(s), premise, and deposit scheme all remain the same . However, there may be different rules for other tenancy deposit protection providers .

• If a tenant wants to terminate a Statutory Periodic Tenancy, they will need to provide one period’s notice which expires the day before the rent falls due. With a Contractual Periodic Tenancy, the tenant will have to give relevant notice as set out in their original contract (same applies if the landlord wishes to do the terminating).
• If you want to increase rent during a Statutory Periodic Agreement, you can do so by serving the tenant with a Section 13 Notice . For contractual periodic tenancies, landlords can rely on a “rent review” clause(s) in the tenancy agreement. Provided this is a fair term this increase will be binding on the tenant and the landlord. The landlord can then follow the terms of the clause to increase the rent. If there is no relevant clause, you can use a Section 13 Notice.

From what I’m aware, there aren’t really any other major practical differences. Both types of periodic tenancies continue on a periodic basis (based on the frequency rent is paid e.g. monthly), as opposed to the usual fixed 6 or 12 month term tenancy.

How did I do? Did I successfully explain it to you like you’re a total plonker [even if you’re not one]?

When & how does a Statutory/Rolling Periodic Tenancy begin?

To reconfirm, you don’t have to do anything to initiate a periodic tenancy , they automatically commence after the fixed term. However, you might want to create a Contractual Periodic Tenancy (to avoid starting a new tenancy) if you’re on the verge of creating a Statutory Periodic Tenancy.

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 (if there are grounds to to do)
• Notice by tenant
• Notice by landlord
• It’s important to note that any break clauses stipulated in the original tenancy agreement are unusable for a Statutory Periodic Tenancy.

Please visit how to end/terminate a periodic tenancy for more details.

• 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!
• Many 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 often 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 since since the periodic contract is rolling and based on the frequency of when rent is due.
• 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 .
• 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.

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?

Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer .

Like this post? Then maybe you should sign up to my FREE newsletter so you receive more like it! You can also find me on Twitter and join my Facebook page .

Hi there. I'm the chap responsible for the rable on this website.

This is where I share my thoughts and experiences on my Landlord life, not just to document my story, but primarily to help others caught in the same rat race.

If you dig my vibe (or even if you don't) or if I've managed to help you out, you can kindly show your appreciation by supporting my addiction!

Thank you in advance, your support genuinely means a lot xo

Related Posts

• How To End / Terminate A Tenancy Agreement The Right Way
• Tenancy Agreement Break Clauses
• Section 21 – Notice of Possession Order Form
• ‘Surrender Of Tenancy’ Notice For Tenants

195 Join the Conversation...

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.

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.

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.

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

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).

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

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.

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

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...

@Katalin #153:

Why would you want one?

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

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

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

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]"

@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.

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).

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.

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.

Please post to the correct blog post.

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.

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/

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.

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?

@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/

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?

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

I am having serious issues with my landlord, I think I am in a periodic tenancy now as my fixed term ended.

How can I get In touch with you to explain my situation.

Kindest regards

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

I have recently purchased a property in England with sitting tenants. The tenants are on a Statutory Periodic Tenancy. Once I take over the property, I want to move them to a Fixed Term Tenancy of one year.

What kind of notice period, if any, do I need to give them to move them to Fixed Terms?

There is very little benefit of moving them to a fixed term unless you are trying to get them onto an agreement with new terms.

To end the SPT, this is normally 2 months notice but currently due to the pandemic it is three.

You may find that the tenant prefers their current situation and you can propose a rent increase on an SPT.

You refer to the tenant as a sitting tenant, I recommend you check their protected rights if the tenancy is very old.

If the tenancy is pretty normal then the tenant may be happy to move to an AST as they are currently on 2 to 3 months notice and an AST might give them a year or 6 months assured tenancy.

With their consent you do not really need to give notice at all, just ask them if they are prepared to sign a new AST that ends and replaces the current tenancy (created in law when they did not leave at the expiry of the last AST).

If the deposit protection was not done properly for previous tenancies then they may think why not sign a new one on the off chance that it is another failure. If there was a failure to carry out a gas safety certification within 28 days of the SPT and the previous one had expired, then the tenant would be mad to agree as the fault cannot be rectifies and no S21 can ever be issued. So as long as there was no S8 grounds they cannot be evicted in such circumstances.

I need to get a definitive answer as to whether the agreement I made with a tenant, whilst still within their first fixed 6 month signed AST agreement period, for them to continue to remain in the property for a maximum of 3 months when the AST agreement date expired, would be classed as a 'contractual' periodic tenancy.

The key point I am trying to establish is that if our agreement did actually constitute a contractual periodic tenancy, as opposed to a statutory periodic tenancy, then a new tenancy did not start but it continued on from the previous 6 month fixed tenancy.

This agreement was confirmed by email only, there was no new signed agreement. The terms of notice were originally to remain as the fixed AST (more for the tenant's benefit) and rent amount did not alter.

The tenant, who was looking for another rental property, as her circumstances had changed, was not under any obligation/contracted to remain for the full 3 months.

When she mentioned that she may need to leave mid-way through the month to secure another property, we agreed to this requesting that she give us 7 days notice instead of a month. In addition, we even agreed to pay her back part of his final month's rent.

After reading the article published on this website, "Periodic Tenancies Explained", my view is that it was a contractual periodic tenancy.

I would be grateful to hear what you think on this matter and can provide more detail if required.

I have a query regarding the term of an AST 12 month tenancy agreement. If the AST 12 month agreement states it’s a 12 month agreement which starts on the 01/11/2020 shouldn’t it end on the 01/11/2021? The contract states it’s a 12 month with a start date 01/11/2020 and ends 31/10/2021, I always thought that the 12 months run and ends on the same day but you must vacate the property by 12noon. Can anyone help me understand this better or tell me I’m right.

Great site by the way!

I am in the process of dispensing with the Letting Agents I have been using and as the current tenancy expires in a months time want to start managing my property myself.

The current tenant is exemplary and wants to continue staying in my property. He mentioned that he wouldn't mind me putting a 6-month break clause into my new tenancy agreement to ensure that I would get at least 6 months rent. Having read your advice that 'to be fully enforceable in law, break clauses need careful drafting with a high degree of legal expertise' I was considering simply issuing was going to simply issue a 6 month tenancy agreement and then in accordance with your item 1) make 'it clear in the original tenancy agreement that the tenancy will become a “contractual periodic tenancy” after the fixed period.

However as the tenant can be easily described as 'good' I don't really feel the need to have flexibility or to 'let things dangle and have wiggle room'! So if I was to simply issue a 12 month tenancy agreement what is the down side for me as a landlord? Shirley the tenant can still just give me a months notice anytime and vacate, or does the 12 months tenancy period mean he *has* to pay 12 months rent?

I agree that this is a great website.

I have a tenant who paid me upfront for a 12 month tenancy agreement. I would like to let the tenancy agreement go into a statutory periodic at the end of the tenancy in July 2021. I am however unsure what the 'period' will be given the tenant paid me 12 months rent upfront rather than month by month? Does the statutory periodic run on a month by month basis even though the rent was paid 12 months in advance? The tenancy agreement does state the rent is £XXX per month.

Many thanks Helen

Hi Helen, once the fixed term expires and if you start accepting rent on a monthly basis then the periodic term will be month-by-month. If you accept another year up front, then obviously it will be like a 12 month fixed term again.

Thank you Eric for your prompt and clear reply. Have a great day and keep safe.

this is the first time I have posted and wondered if you can give me some advice, Where may I find "cut and paste" clauses written in solicitor language.

I really need to add the clause being discussed that allows landlord to insist on 2 months notice

I don't think you can enforce such a clause, even if it's written in the tenancy agreement. The minimum notice period is statutory law.

Copy and Pasting additional terms to an existing tenancy is not a good idea because there are bound to be other terms that contradict the new term you are pasting.

I would advise you go back to your own Solicitor and ask them to draft you a "contractual periodic tenancy" so that the tenancy continues after a defined "initial term" until cancelled formally by break clauses, which themselves have the 2 month allowance you are seeking.

The Solicitor will need to fully examine all clauses that may affect the new terms to make sure that they do not introduce a vagueness that may require interpretation by a Judge and not go your way. Overall the contract needs to be equal to all parties, so you can't have any position (e.g. arrears) that mean you need to give less notice.

Also note that you can't change common law, i.e. what happens if a periodic tenancy is created.

If I were a tenant and unhappy with contractual periodic I would just give notice to end the tenancy but not leave, that would then create an SPT in law. The same applies if you activate a break clause, if they do not leave, an SPT is still created if they do not leave. So some might think it is a waste of time to bother changing the tenancy.

What most landlords do is put in unenforceable terms, because they know tenants are often ignorant of the law. However, they only have to speak to the Council housing dept or shelter or do a bit of googling to establish the facts. Any term that goes against common law is deemed an unfair contract term and if the contract is not defined well may invalidate other terms.

To be honest most landlords are more worried about how many months they will have to give, until the end of May an S21 requires 6 months notice from the Landlord, it will be reducing to 4 months notice from June, under S8 the months of arrears required will be 4 months but that kicks in from August. These are a tapering off of the Coronavirus regulations which will next be reviewed in September.

Landlords with arrears of over a years rent and/or documented ASB can bring a claim sooner, but Court delays are massive, there will be a telephone hearing to determine if an in person hearing is required and there are still ways they can delay proceedings but is better than it was.

That happens at the end of every fixed term tenancy, no need for a contractual periodic tenancy...

As I understood Jon's question, he was trying to get his tenant to be required to give 2 months notice as he himself has to give 2 months notice.

As you know, when a fixed tenancy ends a new Statutory Periodic Tenancy (SPT) is created in law, if rent is paid monthly it requires one month's notice for the tenant to end and 2 months notice from the Landlord.

As you may remember, before the Deregulation Act 2015, Contractual Periodic Tenancies (CPT) were popular to avoid avoid the creation on an SPT so that there was only one tenancy and thus only one set of sanctions if they forgot to protect the deposit.

Most Landlords went back to a fixed term tenancy and allowed the tenancy to roll over to an SPT, but there is another reason for using a CPT. When a tenant abandons a property that has rolled over to SPT the tenant is deemed to no longer have in interest and therefore not liable for the Council Tax, the obligation of same then transfers to the Landlord until a new tenant takes possession.

A CPT prevents this obligation to the Landlord because the tenancy only ends when the tenant gives notice, even if they abandon it, essentially because the tenancy from the start was a month to month tenancy, just one with a minimum period (the initial term).

This legal position was ratified in the High Court in 2016 before MR JUSTICE EDIS in

LEEDS CITY COUNCIL vs STEPHEN BROADLEY

http://www.bailii.org/ew/cases/EWHC/Admin/2016/1839.html

As I said in my post above a tenant can still end their CPT by giving notice and if they then remain in the property after that notice, the CPT will be terminated by the end of the notice period but them remaining will create a new SPT.

Thanks to everyone that replied. I guess in a nutshell the question is "can I ask a tenant to give two months notice when the fixed term ends". I have read that this can be done if the AST states the AST on the day the fixed term finishes enters into a contractual periodic, and not a statutory periodic.

I appreciate the best way to do this is to go to a solicitor but I dont think its needed. Having the clause in the agreement that states tenants notice has to be received on the "rent day" and not any day they choose is only a case of adding a line of text (i.e. if rent day is 5th April and tenant hands in 1 months notice on 15th April the notice period starts on 7th May)

Most ASTs say that the end of the fixed term with mean the start (or the inception) of a Contractual Term (not statutory ) which gives a number of benefits, the question to you guys is can one of those benefits be "the tenant is required to give two months notice"..... I would love an answer that says something on the lines of " As per the June 2020 change you cant do that" :) or "there is nothing stopping you from doing that".

Really appreciate your help guys, I have got a free legal helpline as part of my insurance but he may as well be talking in Swahili as still cant work it our haha

It is fine to think you do not need a Solicitor as long as you are prepared to suffer the risk coming out of a poorly drafted term.

Any term that breaches common law, which itself includes case law, can be voided as an unfair contract term and without other terms properly isolating that term the whole contract can be invalidated.

I think you will find that the trick in your 2nd paragraph will be deemed an unfair contract term in certain circumstances.

There is also consumer legislation governing how much you can hold them liable for if they leave early with little or no notice. Sites like openrent show that you can get a property re-let in days and so give rise to a challenge in any idea of holding them liable for financial loss and those laws also limit the amount of interest to a few percent above base rate for the handful of days.

You can't just put something in a contract and say it is legally binding, the term has to be compliant with a plethora of laws, other laws may give them cause to break a contract, yet other laws may give them ability to sanction you 3 months rent per tenancy and another may sanction you for 12 months rent.

So paying a professional (a Solicitor) to draft a tenancy agreement that meets your stated needs is small price to pay because if they screw up you can hold them liable for any loss you suffer due to their negligence.

As I explained above, a contractual periodic should not have a "fixed" term, but rather an "initial" term, it is this kind of thing that a good Housing Solicitor will know about, because they will follow case law regarding housing, they will know cases that turned on one word in the Act or one word in a loss at the appeal court that became case law.

Most terms and law itself is constructed in an IF THEN ELSE IF manner, it has to account for every scenario but does not override other common law and it needs to be seen as whole. If two terms contradict then a Judge may deem the meaning is different to what you intended. If you think things are in Swahili now, wait until you are on the receiving end of a 400 page brief your tenant's Solicitor has made and you have just to weeks to file your defence which they can respond to but you can file no more and have to wait until you are in Court. Where you will be told if you did not file in your original bundle your document is not going to be allowed by the Judge.

I would avoid making your contract situational, if it is too confusing the term may be struck out as being unfair or unclear. Any term you create also has to be equal to both parties to be deemed fair.

There are some ways to use common law to your benefit, like having a six month initial tenancy where rent is paid in advance every three months, you allow the contract to become statutory periodic and because it inherits the terms of the preceding contract the rent is still due every three months. This means that you are obliged to give 3 months notice to end the SPT but so is the tenant.

This works great if your tenant is a lovely tenant you hate to lose and they are ignorant of their rights, but I have had so many clients over the years who really regretted it when the tenant turned out to be a professional bad tenant. One paid offered to pay rent every six months and wanted the tenancy defined as such, which is was. The Landlord let them take possession on payment of the deposit, they said that their mother was sending a wire transfer for the 6 months rent. That never materialised but the 6 month notice requirement applied. The landlord issued S8 and S21 both of which were frustrated by legal interference, mistakes on paperwork etc.

Was this person a drug dealer looking to grow weed in every square foot of the property, no it was a very respectable software developer, company director, with a wife and child in a property that rents for £5k a month. Of course they begged the Landlord to let them in early for some perfectly plausible reason and the Landlord only saw the £5k he had and the £30 promised.

In a contract with a large prepayment of rent the wording of the contract is important, was the contractual payment term 6 months or was it a monthly term with 6 months upfront. A Court may deem both to be the same regardless of what you put into the contract, especially if the second payment also prepays 6 months in advance.

There is a way to construct a tenancy as a sort of credit agreement but I am not going to get into that now, suffice to say that it created some very interesting case law.

What you need to realise is that housing and law charities will often back a tenant if there is a matter of law they they want case law to be made so that it helps their other tenants, just as there are Landlord organisations who will help some landlords.

An example of this was the case law that made it illegal for an agent to reject a female tenant because they were in receipt of benefits. The tenant was supported by such charities.

You can slow things down by using Section 196 of the Law of Property Act 1925 saying that the notice to quit must be served by registered post to a given address but the same Act also provides that it can be served at their last known abode or place of business.

There might be another contradictory term that says they have to inform the agent and so an email to them would then suffice despite the 196 term.

This is what I mean about ambiguity and this is what a good housing Solicitor will try to avoid.

Most of all you are just kidding yourself if you think you can hold tenants to every word of a contract. There is simply far too much law and case law, you can take them to Court but if they win you pay their legal fees.

Still you might be able to claim from their deposit through the deposit protection scheme, but they can refuse to be part of their ADR which forces you to take them to Court and if you do not do that in a timely manner then the deposit can be returned.

"There is nothing stopping you from doing that" (whatever "that" means) but whether you can enforce it is another matter. The classic one is the clause where if you are late paying rent you can be evicted with 3 days notice and a 30 day notice in other situation. All the tenant has to do is ignore you, change their locks and tell you to serve a legally compliant notice.

I have explained the importance of getting the wording right, e.g. initial term nor fixed term (just one example). I have explained how you need to make sure that no other term contradicts, either in implied meaning or by being vague because a term put in by a Solicitor FOR A REASON was deleted (by you). I have explained how there is a ton of case law that can impact the interpretation by a Judge. I have explained how the loser pays the other sides legal fees. Paying the small price to a solicitor for the drafting of a contract is cheaper than paying for the Solicitor to defend or enforce a poorly constructed contract. You can join landlord organisations that give you a template agreement but they are not accepting any liability for it. I had to defend a Landlord on a NRLA Contractual Period a while back, I have no idea of the age of the contract but the wording was not how I would have drafted it. It does not mean there was anything wrong with it per se, just I could see holes in how it might be interpreted based on my own experience.

So you pays your money and makes your choice or you just hope that your tenant is ignorant of the law and nobody tells them within 6 or 12 years what the situation really is.

Is it all worth the hassle, you might want to read the article below

https://www.propertyinvestmentproject.co.uk/blog/your-tenant-wants-leave-early/

Wow David thankyou so much I honestly didnt expect such in depth educated response... Im really grateful and bless you for taking the time.

I have not added nothing and subtracted nothing from the AST as yet it reads :

THIS APPEARS AT THE START A fixed term of 6 months. Commencing on and including XXXX 2021 To and including XXXX 2021 ("the Initial Term") And then continuing as a monthly contractual periodic tenancy until terminated in accordance with this agreement.

THE TERMS THE ABOVE REFERS ARE AS FOLLOWS: Notice to end the tenancy at or after the end of the Initial Term

If either party wishes to end the tenancy on or after the final day of the Initial Term, they may give notice in writing to the other as follows:

The Landlord must give notice of no less than two months, such notice to expire any time on or after the final day of the Initial Term. A notice served by the Landlord under section 21 of the Housing Act 1988 shall be sufficient notice under this clause. The Tenant must give notice of no less than one month, such notice to expire the day before a Rent Payment Day or on the final day of the Initial Term.

If neither party serves a valid notice to terminate the tenancy at the end of the Initial Term, the parties agree that at the end of the Initial Term the tenancy will continue as a contractual periodic tenancy on a monthly basis.

I guess what I was asking previously is I know its dumb to change "one month " to "two months" if i don't know what I am doing, but if I did employ a solicitor, is it ACTUALLY LEGAL for that solicitor to put my desire for a 2 month notice period in to the contact ?

The reason I ask is was a tenant once upon a time with Northwood, and that clause of 2 months was in their contract. As none of the new clause state specifically about the termination period ... is it still legal. I kicked off to high heaven with Northwood and "I fought the law and the law won" hehe

I am not going to get into editing a document by blog especially with selective excerpts that are full of the exact vagueness, ambiguity and unfairness I was referring to, including unenforceable terms.

I already answered your question about just changing one month to two months in earlier posts, If you have a decent contractual periodic contract it is viable but that excerpt would not seem decent by my definition and experience. The language does not look as if constructed by a Solicitor.

If you do appoint a Solicitor make sure they at least have a decent housing department, you don't ask them to change dog shite agreement you already have, you say "I am looking for a contractual periodic tenancy agreement and these are the things I need (in plain English) it to include".

As I have explained, some Landlords put all kinds of shite in their contracts, they know they are not enforceable, but they figure that most tenants are ignorant of the law so it acts as a deterrent.

Examples might include saying that the tenant can't change the locks or that they have a right of non emergency access to the property or that they are liable for certain repairs that housing law says the landlord is responsible for.

When such a tenant takes the Landlord to Court or vice versa, it just makes it easier for me to demonstrate bad faith on the part of the Landlord, so the Judge takes that into account.

As previously explained, the best reason to use a contractual periodic tenancy is for the avoidance of Council Tax liability.

With regard to 1 month / 2 month, I refer you to the last two lines of my previous post.

ONce again David thankyou for the reply.

Despite what might seem like a disregard of what advice you gave, I didread what you put quite a few times, and I took your advice. Actually tore up the shitty OpenRent AST and invested in a custom 26 pager.

Its made all teh difference for peace of mind, its bomb proof!!!!

For anyone asking the same question on here, that stumbles across my post and Davids posts... David was absolutely spot on. The only way you can possibly get two months notice out of a tenant that is initally on a 6 mth fixed term , is to put it in the AST and hope they dont check.

Found a case of MRxxx Vs Northwoood (northwood charged me for leaving early as didint see the 2 mth notice period in their AST), Northwood lost :)

Just don't use the word fixed term, call it initial term or minimum term

Please can you advise whether my tenant can pay 6 months upfront if I let his current AST go into a contractual periodic at the end of the Fixed Element (27 January 2022). The rental agent says I have to pay for a new 6 month AST otherwise my tenant has the right to pay monthly EVEN though he does not meet the Financial affordability criteria and is happy to pay 6 months rent upfront. My tenant originally paid 12 months AST rent upfront and then another new AST of 6 months rent upfront and now he wants to pay another 6 months upfront from 28th January 2022.

Please see below what is written into his current AST:

The Term shall be from and including 28th of July 2021 to and including 27th of January 2022 (the Fixed Element) and then the tenancy continues as a monthly contractual periodic (the Periodic Element) until ended following either party giving notice. Please see clause 2.5 as it contains important information about what you must do to end the tenancy.

Any advice most helpful but also to avoid paying for yet another new 6 month AST.

Many thanks

Do you really need the agent, are they just fleecing you for costs?

He can only charge the tenant £50 for such an agreement, make sure he is not double dipping by charging you both for the same thing.

If you or the tenant give notice to end the contract on 27th of January 2022 but the tenant remains in the property, a Statutory Periodic Tenancy will be created by virtue of Sec5 the Housing Act. This would not need to be a Section 21, just a notice to end the tenancy, I do not know what termination period is in the contract.

As the rent period is 6 monthly, under Section 3 part (d) the periods of the SPT are the same as those for which rent was last payable under the fixed term tenancy.

this will also mean that your notice period for a S21 Eviction notice is 6 months. So you would tell the tenant that you have to issue these every two months with each one replacing the next so that they always have two months notice. In an SPT the tenant can give one month's notice to end the tenancy

Another disadvantage of the SPT is that you may become liable for Council Tax if they do a runner leaving unpaid Council Tax and don't tell you.

@Helen make sure that you or your agent has fully complied with the Deposit Protection for each tenancy. If the first tenancy was protected and Prescribed Information served in relation to the deposit then as long as the deposit remains in the scheme, then all subsequent tenancies are deemed protected. This is by the S215 additions of the Deregulations Act 2015, but if you do not have evidence of compliance you risk being faced with sanctions of between 1x and 3x the deposit for each tenancy, including the SPT.

If you have failed before but comply now, then subsequent tenancy agreements will be covered.

Search the three schemes yourself online using Tenancy 1 dates and amounts, then ask the agent for a copy of the Certificate and the PI, keep hold of them both, ideally PI is signed by the tenant. Do this first, you never know when you are going to fall out with an agent and even if they are supposed to protect the deposit, you can only hold them liable if you have evidence they took on that obligation.

Thank you for the information below .

For clarity - here is the clause referred to for termination / break clause in the Current AST :

“2.5 Break Clause 2.5.1 This agreement creates a single tenancy that starts with a Fixed Element and then becomes periodic. This would normally guarantee both parties the rights and obligations for the Fixed Element and a minimum of one period. The following two clauses allow either party to terminate the agreement earlier than that date, but not before the end of the Fixed Element (the date quoted in 1.6.1 as “to and including (date)”). 2.5.2 The Landlord may bring the tenancy to an end at, or at any time after, the expiry of the Fixed Element, subject to any statutory limitations, by giving to the Tenant at least two months’ written notice stating that the Landlord requires possession of the Property. A notice under section 21 of the Housing Act 1988 will suffice to implement this sub-clause. 2.5.3 The Tenant may bring the tenancy to an end at, or at any time after, the expiry of the Fixed Element by giving to the Landlord at least one month’s written notice stating that the Tenant wishes to vacate the Property. A letter will suffice to implement this sub-clause. While the tenancy is periodic the one month’s written notice must expire the day before a Rent Due date .”

1) does the above mean that if I let the current AST go into a ‘contractual periodic tenancy ‘ ( as per the wording of the current AST ) and with the tenant paying me a further 6 months rent in advance - then I would have to give the tenant 6 months notice to end his tenancy under section 21 AFTER the 6 months has expired that his has paid for upfront ? I am getting so confused as the current AST says I would have to give 2 months notice after the ‘fixed element ‘ of 6 months ( paid in full upfront ) :-( ???

2) where does it say that the tenant has to pay £50 for any new AST rather than me paying £210 ( including VAT) ? Is £50 a legal requirement ?

3) the agent is strongly recommending I enter into a new 6 month AST so that the tenant can pay 6 months in advance and it mitigates the landlord risks . I am not sure what they mean by ‘risks’ . Do you know please ?

Thank you so much

Let me try to simplify things.

A brand NEW Assured Shorthold Tenancy normally has protection of notice not being able to be given in first 4 months and that notice must be 2 clear months, so this effectively give a minimum term of 6 months and a day UNLESS the contract has a fixed term with no break clause which may make it longer. Subsequent tenancies do not have the 4 month limitation but rely on what is defined in the contract as long as the tenant always gets the 2 months’ notice on the 6A Section 21 form.

An SPT is an AST but created by law, it carries on all of the terms except TERM and NOTICE and it is created when a tenancy expires but the Tenant remains in the Property.

As I read your first question I thought you were suggesting that your AST says the Tenant has the right to pay monthly after six months have passed. I have not seen the whole agreement and if you want me to look at it I suggest contacting me via the forum.

1a. I have not read all the terms of your agreements and it would be clutter to paste it into a blog post, it may also be copyrighted, so use the forum private message option.

1b. You have quoted the Break Clause and a fixed element which some might call an initial period, the break clause says how to end the agreement not how rent is paid. Try not to conflate the two.

1c. Both parties may agree to end a contract and replace it with another, you could do it next week if you want, as long as you both agree then you do not need to wait for a break clause.

1d. Based on new information provided I would hazard a guess that your contract has payment frequency of monthly payments defined but requests the first six months up front. That does not make the "period" months. What makes it six months is the payment frequency being defined as 6 monthly.

1e. The break clauses you quote look as if they are designed to mirror legislation on a pay monthly contract. Your contract will not "go into", it appears to “already be” a contractual periodic tenancy, designed not to need to be renewed.

1f. So NO if you stick with current agreement you do not have to give 6 months’ notice for S21, the terms of that contract apply, if you end the contract and let it go to SPT then the Housing Act rules apply, they inherit the terms of the preceding AST, so if the payment term "period" in your contract is monthly then the notice as 2 months landlord 1 month tenant. If it is defined in the contract as six monthly then so is the notice.

So really you need to decide what you want, agree it with the Tenant and put it in the new tenancy agreement if the current agreement differs from what you want

The current AST does NOT say you would have to give 2 months notice AFTER the ‘fixed element ‘ of 6 months it says either party "may bring the tenancy to an end at, or at any time after the expiry of the Fixed Element"

So if the initial fixed element runs to 27th of January 2022, then the S21 notice could be served 2 months before 27th of January 2022, e.g. 26th November 2021. That would bring it to an end on 27th of January 2022.

2. What you agree with the Agent for the cost of a Tenancy agreement is up to you two, but under the Tenant Fees Act 2019 only permitted fees may be charged to a Tenant and the renewal maximum is £50 unless they can show the Court that their costs were substantially higher, e.g. if the contract had to be sent by UPS to a Royal Prince in Saudi Arabia at the Agent's expense.

3. Well advanced rent mitigates some risks, but it is important that it is advanced rent and not a deposit, the limit for deposit is 5 weeks rent. For example I had a tenant who paid a deposit yet also asked to pay 6 months upfront, but he was still paying monthly from month 1, as the 6 months’ rent was used for the performance of the contract it was deemed as part of the deposit and needed to be protected. Your contract can be constructed so that the tenant pays every six months, or you can have a formal arrangement where regardless of what is defined in the agreement you both agree he will pay 6 months up front.

The financial risks of an SPT are as I said in my last post on Council Tax, but on an SPT you can serve a S13 to increase rent, tenant can challenge but they will look at the market.

You might want to reduce the advance rent to 3 months, there is also a complex way to structure advance rent as a finance agreement for tenants that have bad credit. These have to be very carefully worded.

It sounds to me like the agent just wants a fee from you, normally a contractual periodic is used so you don't need to renew.

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A little introduction...

Yeeeeha! This project started 6,496 bloody days ago.

I initially started this blog because I wanted to document my every step to becoming a BTL landlord, in hope that others' (with more experience) would discover my dronings and have the heart to help me - a beetle on its back - along the way. I literally didn't have a clue about being a landlord when I started this website.

Having expanded my property portfolio over the years, I now occassionally blog about my bitter life as a Landlord, so fellow Landlords (prospective, new, and seasoned) can learn from my few successes and frequent failures.

Feel free to read more about me and my Landlord Blog and/or contact me .

Important / How this website works...

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Going Periodic: What Happens When a Tenancy’s Fixed Term Ends?

Find out everything about periodic tenancies, rolling contracts, renewals, and what to do when your AST’s minimum (fixed) term is about to expire.

When a landlord rents out a property to a tenant, there will usually be a tenancy agreement that specifies a period of time which the tenancy will last for. 

This period of time is the ‘term’ of the tenancy. Where the term is set out in the tenancy agreement, it is usual to refer to the agreement as ‘fixed term’, as it will be for a fixed period of time. This will normally be for six months or a year. Less commonly, it can be for other periods of time.

But what happens when this period of time ends? Let’s go through the different scenarios. 

What happens when a contract’s minimum term ends?

• How are periodic tenancies created?

What happens when only one tenant wants to leave a joint tenancy agreement?

More than a million properties have been let on openrent – why not yours too.

This will depend on whether the tenants have moved out or not. Let’s look at both cases.

1. If the tenants have moved out

If the tenants move out at the end of the fixed term, the tenancy ends. It will no longer exist. This is under a rule quaintly known by lawyers as ‘effluxion of time’. 

So, if the tenants have moved out by that date, then that is the end of it. The tenants no longer have any liability under the tenancy and the landlord no longer has any right to charge rent.

Landlords often get upset about this if the tenants have moved out without giving them any notice. Sometimes they may even put in their tenancy agreement a clause requiring the tenant to give notice if they want to leave at the end of the fixed term and providing for them to pay ‘rent in lieu of notice’ if they don’t.

 Sadly (for the landlords) these clauses will almost certainly be void under the Unfair Contract Terms regulations (now part of the Consumer Rights Act 2015).

 The tenant only signed up for a specific period of time.  Any clause forcing him to stay longer or attempting to make him liable for continuing rent if he has moved out will be considered ‘unfair’ and unenforceable.

2. If the tenants remain in occupation

The situation is different if the tenants remain living at the property. Although save where there is a contractual periodic tenancy set up (see below on this), the tenancy will still end at midnight on the last day of the fixed term. 

If the tenants remain in occupation, then in most cases, if no new fixed term tenancy or ‘renewal’ has been signed, then as soon as the fixed term tenancy has ended, a new ‘periodic’ tenancy will be created automatically in its place. 

 Unless or until a new fixed term tenancy or ‘renewal’ document is signed, the tenancy will then continue on this periodic basis.

 There is nothing wrong with this. Some tenancies have run on for years on a periodic basis. You don’t have to give tenants a new fixed term or renewal. 

 Fixed terms are often preferable as they give both landlord and tenant more security. Plus, they give landlords an opportunity to increase the rent. Sometimes, however, if either the landlord or the tenant is uncertain of their plans, it may be better to let the tenancy run on as a periodic, as this is more flexible. 

The landlord may also prefer not to be tied down to a long fixed term if they are unhappy about the behaviour of their tenant and are only willing to allow them to remain if they behave themselves on a month-by-month basis.

Whether you allow the tenancy to run on as a periodic or insist on a new fixed-term really depends on what you want and what is best under the circumstances.

Incidentally, letting agents are often keen for tenancies to be renewed as this will trigger their entitlement to a ‘renewal’ fee. Don’t let them over-persuade you. If the circumstances of your tenancy are that the more flexible periodic tenancy is preferable, then they should accept this. They do not have an absolute right to a renewal fee – however much they may want it!

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What is a periodic tenancy?

So if the tenants remain in the property and no renewal is signed, there will be a periodic tenancy. How are these created?  There are basically three options:

• If the tenancy is an assured shorthold tenancy
• If the tenancy is a ‘common law’ unregulated tenancy
• If the tenancy agreement provides for a contractual periodic tenancy

Let’s take a look at these in turn :

1. Statutory periodic tenancy

If the tenancy Is an Assured Shorthold Tenancy, then when the minimum term expires, the tenancy will continue due to statute.

Of the three, this is the most common situation. The new tenancy will arise because section 5 of the Housing Act 1988 says it will.

The Housing Act 1988 is the act which set up and regulates assured and assured shorthold tenancies. Section 5 says that if the tenant remains in occupation after the end of the fixed term, then a new ‘periodic’ tenancy will be automatically created. This new periodic tenancy will:

• Start immediately after the fixed term ends
• Be deemed to be between the same people who were the landlord and tenant at the time the fixed term ends
• Be in respect of the same premises
• Be ‘periodic’ which means it will run from period to period – normally monthly or weekly (see more on this below)
• Save for this, it will be under the same terms and conditions as the preceding fixed-term tenancy

This sort of periodic tenancy is known as a ‘statutory’ periodic tenancy – because it was created by statute, i.e. section 5 of the Housing Act 1988.

In most cases, the period will be monthly or weekly, depending on how the rent is payable under the terms of the tenancy agreement. However, if the last payment of rent was different – for example, if the tenant paid all the rent upfront by one payment for six months’ worth of rent – then the period of the tenancy will reflect this last payment (so in our example it will be a six-month periodic tenancy).

Most tenancies today are assured shorthold tenancies, so in most situations where tenants stay on after the end of the fixed term, they will have a statutory periodic tenancy.

2. ‘Common Law’ unregulated tenancy

Some tenancies fall outside the statutory code set up by the Housing Act 1988. In the main, these are:

• Tenancies where the landlord is a resident landlord as he lives in the same building (see more on this below)
• Tenancies where the tenant is a limited company, or
• more than £100,000 pa, or
• less than £750 pa (or £1,500 pa in Greater London)

You will find a full list in Schedule 1 of the Housing Act 1988.

So far as resident landlords are concerned, this will normally be where someone is renting out some sort of granny annexe of ‘garden flat’. It will not apply to situations where the landlord owns two or more properties in a purpose-built block of flats and rents one and lives in another – here the rented properties will be ASTs. If the landlord is renting a room to a lodger, this will normally not be a tenancy at all (see more about this on my Lodger Landlord website).

Let us take the stress off your shoulders – from contract signing to monthly rent collection.

So, what happens if a tenant stays on after the end of the fixed term in a common law tenancy? Section 5 will not apply as this is not an AST. Generally, however, the law will imply a periodic tenancy where the tenant pays and the landlord accepts rent.

Under section 54(2) of the Law of Property Act 1925, it is not necessary to have a formal written tenancy agreement deed if a tenant is living in a property and paying rent where there is a fixed term of 3 years or less. A new tenancy will be created automatically. 

The only circumstances where it will not be created will be if the tenant fails to pay rent or the landlord refuses to accept it. Generally, the landlord will be looking to recover possession of the property here, in which case note that they will still need to get a possession order through the courts (my Landlord Law Eviction guide has instructions on how to do this). 

3. The tenancy agreement provides for a contractual periodic tenancy

The third kind of case that creates a periodic tenancy is ‘contractual periodic tenancy’. These are not common and only exist if the tenancy agreement signed by the tenant specifically provides for them.

When this is done, the tenancy does not actually end at all, but continues (assuming the tenants don’t move out) on a periodic basis, as set out in the agreement. Normally this will be for a monthly periodic tenancy.

One of the advantages of contractual periodic tenancies is that you can specify what the period of your periodic tenancy will be so this creates certainty.  

What won’t happen:

It’s probably worth mentioning, to conclude this article, that where someone has been living in a property as a tenant, they will not turn into a ‘squatter’ if they remain in the property after the fixed term has ended. 

They will stay a tenant and will be entitled to remain in the property until evicted through the courts. 

Another worry landlords have is that if tenants stay in the property for a long time, they will suddenly acquire extra rights, such as the right to buy the property. This won’t happen, either.

Landlords will almost always be entitled to evict tenants who remain living in the property after the fixed term has ended. The only circumstances where this is not the case is where the tenant has a protected tenancy under the Rent Act 1977. But no Rent Act-protected tenancies have been (or can be) created since January 1989, so this is not going to happen with a more recent tenancy.

In conclusion

In the vast majority of cases where a tenant stays on after the end of the fixed term where no new agreement has been signed, he will continue to have a tenancy – a periodic tenancy  Indeed, he will also have a tenancy agreement as the terms of the preceding tenancy agreement will continue to apply.

However, there is nothing to fear about periodic tenancies and there are times when allowing a tenancy to ‘run on’ as a periodic is a good idea  Hopefully this article helped you understand the issues and how the rules work .

Want to make sure an applicant is a good fit for your property?

In a joint tenancy, all tenants are joint and severally liable for the duties of the tenancy (e.g. paying the rent) but also the privileges (e.g. enjoying access to the whole of the property).

As long as they follow the terms set out in the contract, any tenant in a joint tenancy can give notice to leave the property. If the contract says 2 month’s notice is required, then any tenant can give this notice and move out two months later.

At this point, the tenancy will have ended for all parties unless the tenancy agreement says otherwise. If the other tenants remain and keep paying the same rent, it won’t simply be business as usual, since the tenancy that previously existed, along with its terms, will have been terminated.

It will be in everyone’s interest to come to a new agreement as soon as possible. Ideally, the remaining tenants and landlord will have made arrangements during the notice period and signed a new tenancy agreement to start as soon as the old one ends.

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Notable Replies

Hi, I was reading this post, which if I understand it well it can benefit me so much. I am a tenant and my assured shorthold tenancy agreement is coming to an end on the first week of March. Today I visited a new property which I am likely to rent it very soon. My contract says I should give 2 months notice prior to the end of the fixed term or 1 month notice in the event of becoming periodic tenancy.

Is any risk of losing my deposit or part of it for giving 1 month notice only because the contract is due to expire in 2/3 weeks? Thank you.

The tenancy can come to an end at any point where both you and the landlord are on the same page and agree to this.

Where the tenancy is coming to an end by way of the mutual break clause in the contract, then the stipulated notice period is what’s required. The break clause is viewable in section 11 of our AST.

Hi Alex, also worth noting that if you don’t come to an agreement with the landlord, then you will be liable to pay the rent for the duration of the fixed term, as the tenancy will not have been terminated.

If you do not pay the rent, then the landlord will be able to take unpaid rent from your deposit.

Thanks a lot Sam for your reply. My plan is to give one month notice the day after my contract expires (on the 1st March). If i give my notice now, it has to be 2 months. I want to leave as soon as possible, so it benefits me to give notice for a month only. I am just scared that they might call me and put pressure on me to renew the contract, and I want to refuse that. I have been with them for 5 years.

Oh sorry Alex I think I misunderstood your situation.

If your fixed term ends on 1st March, then you can usually move out on the last day of the tenancy, without giving any notice, as described in the original post here.

If you stay even one day longer, the the contract will become a periodic tenancy and you will have to give notice one month’s to terminate it.

As I understand from what Tessa wrote, clauses demanding the tenant has to give notice if moving out on the last day of the fixed term will be seen as unfair clauses. That’s Tessa’s point in the post.

In this case, the tenancy would end on the last day of the fixed term, they would need to return your deposit within 10 days . Because the tenancy would be terminated and you would have vacated the property, they would not be able to charge you rent after 1st March.

It is always best to communicate your plans with the landlord and not to just spring this upon them! We always recommend mutual agreements wherever possible, as these work best for both parties.

Hope that helps!

Continue the discussion at community.openrent.co.uk

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This article is not intended to form legal or investment advice. Investments in property are not guaranteed and can decrease in value as well as increase.

Checklist: Landlord Responsibilities

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A Complete Guide to Periodic Tenancy

A periodic tenancy is a type of lease agreement where the tenant rents a property for an indefinite period. It is a common form of renting property that provides flexibility to both landlords and tenants.

This guide aims to provide a comprehensive overview of periodic tenancy and help you understand more about the property business.

What Is a Periodic Tenancy?

Rolling periodic tenancy, often only called periodic tenancy, is an arrangement where the tenancy continues on a rolling basis without a fixed end date. Unlike fixed-term tenancy, the periodic tenancy is automatically renewed.

For Example, 

If the tenant signs a lease agreement with the landlord on 1 January on quarterly periodic tenancy agreeing to pay at the start of the month, the tenant pays at the start of each quarter.

The lease is automatically renewed at the start of the next quarter (1 April) unless the tenant or landlord provides a required notice to terminate.

Types of Periodic Tenancy

When choosing between fixed-term and periodic tenancies, landlords and tenants should carefully consider their preferences, needs, and local rental laws. Each has its advantage and drawbacks. There are two types of periodic tenancy that you need to be aware of.

Contractual Periodic Tenancy

It is explicitly agreed upon in the tenancy contract rather than being an automatic transition from a fixed term to a periodic tenancy.

This agreement may be made either at the beginning of the tenancy or shortly before the expiration of the fixed-term contract. It is possible to establish a periodic tenancy by specifying the initial term as one month or a week.

Statutory Periodic Tenancy

It occurs when an assured shorthold tenancy concludes its fixed term. If the tenant chooses to stay at the property without renewing the contract, the tenancy automatically continues on a rolling, periodic basis.

Suppose the tenant continues to pay rent after the fixed term has ended, and the landlord accepts it. In that case, the transition from a fixed-term assured shorthold tenancy to a statutory periodic tenancy happens automatically.

The tenancy period will depend on the frequency of the payment of rent such as weekly/monthly/quarterly.

Periodic vs Fixed-Term Tenancy

There are some differences between periodic and fixed-term tenancy that you need to be aware of:

• Length of Contract - Fixed-term tenancy is for an agreed specific length (for example, six months) after which the contract expires; meanwhile, periodic tenancy has no specified end date.
• Renewal of Contract - After the fixed-term contract expires, it needs to be renewed and agreed upon by both parties, but the periodic tenancy is automatically renewed.
• Notice Requirements - Generally, no notice is required at the end of the term of fixed-term tenancy, but you need to provide notice for periodic tenancy according to statutory requirements.

Increasing Rent on a Periodic Tenancy

Section 13 of the Housing Act 1998 outlines the process for landlords to increase rent on a statutory periodic tenancy. 

It also applies to contractual tenancy agreements where there is no mention of the rental increase in terms of the contract. You can act according to the agreement if there is a term to increase rent under the contractual periodic tenancy.

 Here is the summarised version of Section 13:

Notice of Increase

The minimum period for the notice to take effect is determined based on the type of tenancy:

• For Yearly Tenancies - Six months' notice.
• For Tenancies with Periods Less Than a Month - One month's notice.
• For Other Cases - A period equal to the tenancy period.

Frequency and Timing of Rent Increase

A landlord can use a Section 13 notice to increase rent once a year.

Referral to Tribunal

• Tenant can refer the notice to the First-tier Tribunal (Property Chamber) if they disagree with the increase.
• Referral must be made before the notice period expires using Form 6.
• The Tribunal determines a market rent for the property.

Ending Periodic Tenancy as a Landlord

Ending a periodic tenancy as a landlord typically involves providing proper notice to the tenant. The process may vary depending on local laws and the terms specified in the tenancy agreement.

A landlord commonly uses a Section 21 eviction notice to terminate a periodic tenancy. Referred to as a 'no-fault eviction,' this process allows the landlord to end the tenancy without requiring a specific legal reason for eviction.

The landlord cannot end an Assured Shorthold Tenancy (AST) under the Housing Act 1998 Section 21 Notice procedure in the first six months of the tenancy, whether fixed term or periodic AST.

Section 21(4)(a) of the Housing Act 1998 addresses the notice for periodic tenancy.

In the case of statutory periodic tenancies, the standard Section 21 notice period is typically two months, but landlords can extend it if desired.

For contractual periodic tenancies, notice periods are usually the same as in statutory periodic tenancies. However, if rent is paid quarterly or yearly, the notice period must be 3 or 6 months, respectively.

You can consider these things during periodic tenancy eviction:

Notice to Terminate:

• The landlord needed to have to provide the tenant with appropriate notice as required by Section 21 of the Housing Act. 

Grounds for Eviction:

• Non-payment of rent, illegal activities on the property, or breach of the contract term can be grounds for eviction. The specific ground may also vary based on local landlord-tenant laws. You need to be aware of these laws in your area.

Legal Requirements:

• Landlords must adhere to legal requirements and procedures for eviction as outlined in local rental laws.

What Makes a Section 21 Notice Invalid?

A Section 21 notice in the UK may be deemed invalid for various reasons, necessitating landlords to adhere to specific legal requirements for its validity. Common grounds for invalidity include issues with the form, such as using an incorrect form or providing inaccurate details about the tenant or property. 

Timing is crucial, and if the notice is issued before the end of a fixed-term tenancy or fails to provide the required two months for statutory periodic tenancies, it may be considered invalid.

Compliance with deposit protection regulations is paramount, as failure to protect the deposit in an approved scheme or provide prescribed information can render the notice void. Licensing requirements must be met, and if the property should be licensed but isn't, the Section 21 notice might be invalidated.

Outstanding repairs, retaliatory eviction in response to legitimate tenant complaints, breach of selective licensing schemes, absence of a valid Gas Safety Certificate or Energy Performance Certificate, and failure to serve prescribed information can also contribute to the invalidity of a Section 21 notice.

Landlords should seek legal advice to ensure compliance with regulations, and tenants receiving what they believe to be an invalid notice may explore legal avenues for challenge.

Ending Periodic Tenancy as a Tenant

If you have a periodic tenancy, you can terminate it by providing notice to your landlord anytime. You will be responsible for paying rent until the end of the notice period. Termination can also occur through mutual agreement or eviction if valid grounds exist.

Notice for a periodic tenancy is typically given in writing and is usually 28 days. The notice period should be four weeks if rent is due weekly. Tenants need to make sure that they have paid all their bills due.

In summary, periodic tenancy provides flexibility with automatic renewals, while differences from fixed-term leases include no specified end date and automatic renewal. Rent increases follow Section 13 guidelines.

Landlords use Section 21 notices for eviction, with specific rules and notice periods. Tenants can terminate with notice, considering specified periods and responsibilities.

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Terms and conditions of a lease.

The terms and conditions of a lease explain the things a tenant and landlord must do or obey while the tenant occupies the premises.

Type of Lease

There are 3 types of leases in Jersey:

A periodic tenancy is one that keeps running or continuing until notice is served, so long as the rent is paid every period. The period is calculated by when the rent is paid. For example, if rent is paid every month it is a monthly periodic tenancy. If rent is paid every three months it is a quarterly periodic tenancy. A periodic tenancy may also be known as a rolling lease.

Any lease that does not include a term is automatically a periodic tenancy.

A fixed term tenancy is created when the landlord and tenant sign a lease that has a statement or term in it which says how long the lease is going to last for. This is the fixed term. The terms of a fixed term tenancy may or may not have a term that allows the tenant to ask for a renewal of the lease.

A contract lease is a lease over property that has a length of 9 years or more agreed at the start of the lease. A contract lease needs to be presented to the Royal Court so that the details of it can be recorded in the Public Registry. Stamp duty must be paid by the tenant based upon the rent charged for the property.

Renewal of a lease

A renewal of a lease is the name given to a lease which has finished but which the landlord and tenant agree to continue or start again. The landlord and tenant agree to continue the lease for another term so it is renewed.

If a lease has a clause about renewal in it, the landlord and tenant can discuss renewal before the current lease runs out. If there is no renewal clause it is good practice for parties to discuss their intentions well in advance of the lease ending.

Cost of a lease

The landlord is entitled to pass on to the tenant the cost of having a lease prepared and written up.  This cost must be disclosed to the tenant before they accept the lease as this is material information.

Some leases include a clause allowing the tenant to transfer the lease to another tenant. This is called an assignment or re-assignment.

If there is no mention of being able to assign the lease, an assignment is still possible with the landlord’s permission.

If there is an assignment clause it means that the tenant can leave the premises before the end of the lease without giving notice to end the tenancy, so long as they have found someone to take on the lease. Assignments can be acceptable to a landlord because the new tenant has taken on the responsibilities of the lease and the landlord does not have to look for a new tenant when the lease expires or lose any rent.

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Residential Tenancies Act, SA 2004, c R-17.1

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Current version: as posted on May 27, 2019

Suggestions

Joint tenancies

Where a tenancy is granted to two or more people, the tenants hold the tenancy jointly and are both liable for rent and other costs.

What is a joint tenancy?

How a joint tenancy can be ended, when a joint tenant leaves, who can succeed to a joint tenancy, tenancy deposits for joint tenancies, housing benefit and universal credit for joint tenants, where there are more than four joint tenants.

A joint tenancy is where there is more than one tenant, and each tenant has the same:

right to possession of the property

interest in the property

Interest in the property means in terms of extent, nature and duration.

This is sometimes called the four unities. The four unities are unity of title, time, interest and possession. Each requirement must be met for there to be a joint tenancy.

Each joint tenant is equally entitled to peaceful enjoyment of the entire property.

Each joint tenant has the same right to possession of the entire property and one tenant cannot exclude the others from occupying from any part of the property.

In practice, joint tenants normally agree between themselves how the property will be occupied, for example, who will occupy which bedroom. These agreements are between the tenants only and are not binding on the landlord.

Some tenancy types require the tenant to live in the property as their only or principal home. Where this is a condition of the tenancy, this is satisfied if only one of the joint tenants is in occupation.

Joint liability for rent and costs

Joint tenants are jointly and severally liable for all the obligations owed under the tenancy.

This means that the landlord can pursue just one of the tenants or someone acting as their guarantor for all the obligations and rent due under the agreement. For example, they could be liable for the rent owed by all tenants.

Tenants who are minors

A joint tenancy can be shared between a minor and an adult aged 18 or over, but not between two minors. The adult tenant will hold the legal estate as trustee for both joint tenants.

Find out more about  tenancies for children and young people .

Joint licences

Joint licences follow the same rules as joint tenancies.

The landlord or any of the tenants can end a joint tenancy by serving the correct notice. It can also be ended by a mutually agreed surrender between the tenants and the landlord.

Landlord's notice

A valid notice served by the landlord on any one of the joint tenants can end the tenancy for all joint tenants. [ 1 ] The notice must be the correct notice for the tenancy type.

In the case of a joint assured shorthold tenancy, a valid section 21 notice must names all the joint tenants and be served on at least one of them . The tenant is classed as all of the people who share the joint and several liability, and the tenant is correctly named by inclusion of all of those names. [ 2 ]

Find out more about notices in possession proceedings .

Tenants' notice during a fixed term tenancy

All joint tenants must consent to exercising a break clause to end a tenancy during the fixed term, unless a written term of the tenancy allows for any one of the joint tenants to use the break clause.

Tenant's notice during a periodic tenancy

A valid notice to quit served by only one joint tenant ends a periodic tenancy for all joint tenants. [ 3 ]

A valid notice to quit by one joint tenant during a periodic tenancy will end the tenancy even if the other tenants do not agree or if they are not aware.

A tenant is allowed to end the joint tenancy and enter into a new sole tenancy with the landlord . [ 4 ]

If one joint tenant serves a notice to quit which is not valid, they cannot agree with the landlord to waive any error in the notice, for example if the notice did not expire on the correct day. [ 5 ]

Find out more about an occupier's notice to end a periodic tenancy or licence .

Surrender is an agreement to end the tenancy early. All parties, including the landlord and all joint tenants must agree to surrender. A tenancy can be surrendered during both the fixed term and during a periodic tenancy.

Implied surrender happens when the conduct of the tenants and the landlord clearly indicates that neither party wants to continue with the tenancy. If the landlord and tenants do not agree that a surrender has taken place, a court can decide on the evidence available. 

One joint tenant cannot surrender a tenancy without the consent of the other joint tenants. [ 6 ]

Find out more about surrender of a tenancy .

A joint tenant who is leaving a joint tenancy might want to end all ties with the tenancy. The joint tenant's options for doing this depend on their circumstances.

When a joint tenant can be replaced

A tenant could be replaced on the tenancy agreement if all tenants and the landlord agree.

The new person will only become a joint tenant if there is an express or implied agreement between all parties that both:

the original joint tenancy has been surrendered

a new joint tenancy has been granted

If there has been no surrender, then the new tenant will be a subtenant or licensee of the existing joint tenants. The joint tenant who moves out retains all their rights and responsibilities for as long as the joint tenancy continues.

The only exception to this rule is for a joint statutory tenancy under the Rent Act 1977 where, if one joint tenant leaves, the tenancy passes to the remaining tenant or tenants. [ 7 ]

When a landlord can charge a fee

A landlord or letting agent can charge a fee in relation to the surrender and re-grant of a joint tenancy.

A private landlord or letting agent is prohibited from charging a tenant or other relevant person more than £50 in connection with an assured shorthold tenancy, licence or tenancy granted to a student by a specified educational institution. If the landlord or agent’s reasonable costs are greater than £50, a higher fee can be charged. [ 8 ]

Find out more about banned tenant fees and penalties for landlords .

When a joint tenancy can be assigned

A joint tenant might be able to assign their interest in the tenancy to the remaining joint tenant. This depends on the type of tenancy agreement and terms in the agreement.

For assured and assured shorthold tenancies, whether the tenant has the right to assign the tenancy depends on what is in their tenancy agreement. If the agreement says nothing about assignment, the landlord's consent is required. The landlord can withhold their consent for any reason.

The right to assign regulated tenancies is governed by the terms in the tenancy and requires the landlord’s consent. It is not possible to assign a protected shorthold tenancy.

Assignment is not normally available for a joint secure,   flexible, or introductory tenancy.

Where the agreement states that the tenant can assign with the landlord’s consent, the consent should not be unreasonably withheld. 

A tenant who assigns the tenancy without consent where it is required has breached the tenancy. The landlord could issue possession proceedings. 

An assignment must be made by deed. A deed is a written document that is signed as a deed and witnessed. An attempt to assign without satisfying all the formalities of a deed could be effective as an equitable assignment. The tenants should seek specialist legal advice if they wish to assign by deed.

Find out more about assignment of a tenancy .

When there has been a relationship breakdown

Where there is a relationship breakdown between joint tenants, the court can make an occupation order in favour of one joint tenant. An occupation order can exclude any other joint tenant from the property on a short term basis while longer term housing options are explored.

A court can also transfer one joint tenant’s interest into the other joint tenant’s sole name even if the other joint tenant does not agree to it. The courts have powers to do this under matrimonial or family law, and in the Children Act 1989.

A tenant might need to make an urgent application to court for an injunction to stop another joint tenant from serving notice to quit and ending the tenancy before the transfer of tenancy can be applied for.

Find out more about  housing rights of married joint tenants and  housing rights of cohabiting joint tenants .

After a joint tenant dies, the tenancy continues in the name of the remaining joint tenant or tenants under the right of survivorship. [ 9 ] This happens regardless of the tenancy type.

The only exception to this rule is for a joint regulated statutory tenancy under the Rent Act 1977. If the surviving statutory tenant does not occupy the property, the tenancy will cease to exist on the death of the resident joint tenant.

Find out more about succession to a tenancy .

Any deposit received in connection with a joint tenancy is treated as a single deposit, even if it is made up of individual payments from different joint tenants.

In most cases, each joint tenant contributes an equal share of the deposit. Joint tenants have joint and several liability for a joint tenancy. This means that if one joint tenant defaults on their rent, the landlord can deduct the outstanding amount from the deposit paid by all.

Deposit protection scheme

A landlord must protect the deposit for an assured shorthold tenancy in a government-approved deposit protection scheme.

The landlord must also serve the tenants with prescribed information. The name and contact details of each joint tenant must be included. [ 10 ]

Service of the prescribed information in a single communication addressed to all the joint tenants or to any lead tenant should be sufficient to comply with the requirements of the tenancy deposit legislation.

All joint tenants must apply to court together to claim against a landlord for breach of the tenancy deposit protection rules.

Find out more about tenancy deposit protection and deposit claims against landlords .

Amount of tenancy deposit

A tenancy deposit is capped at: [ 11 ]

five weeks’ rent, where the total annual rent is less than £50,000

six weeks’ rent, where the total annual rent is £50,000 or more

The cap for a joint tenancy relates to the total weekly rent for the tenancy. A landlord cannot ask for a tenancy deposit equivalent to five or six weeks’ rent from each of the joint tenants. [ 12 ]

Deposits when a joint tenant moves out

When a joint tenant has moved out, they will need to agree with the other joint tenants and the landlord what will happen to any deposit they have paid.

When an occupier is replaced and a new tenancy starts

The new occupier could become a joint tenant under a new joint tenancy if the original tenancy is surrendered by agreement of all parties. The initial deposit after any agreed deductions should be returned to the original tenants. The landlord and remaining joint tenants can then enter into a new joint tenancy agreement.

The original tenants should decide between themselves how much to return to the departing tenant. The landlord can then take a new deposit and serve new prescribed information on the new and remaining tenants.

When an occupier is replaced and the joint tenancy continues

A new occupier might be asked to pay their share of the deposit to the departing tenant. If a new tenancy is not entered into, the original joint tenancy will continue and the new occupier will usually become a licensee of the original joint tenants, including the departing tenant.

The remaining joint tenants should pay the departing tenant's share of the deposit to them when the tenancy ends.

When all joint tenants have been replaced

It is possible for all existing tenants to be replacement tenants, and not named on the original tenancy agreement.

In one County Court appeal, the new tenants had moved in with the agreement of the landlord and paid a deposit to the departing tenants they replaced. They had a right to claim when their deposit was not protected. [ 13 ]

The rules on housing benefit and universal credit housing costs element for joint tenancies depend on whether the joint tenants are:

a household

subject to Local Housing Allowance rules

For example, a cohabiting couple would be classed as a household.

Local Housing Allowance (LHA) rules apply to most private renters, whether they are receipt of housing benefit or universal credit. Find out more about the LHA scheme .

When joint tenants are subject to LHA rules

J oint tenants who are a household and subject to LHA rules receive the relevant LHA rate for their household. For example, a couple without children are entitled to the one-bedroom rate.

Where joint tenants are not in the same household and are subject to the LHA rules, each joint tenant receives the individual LHA rate they are entitled to. For example, a single person under the age of 35 is usually entitled to the shared accommodation rate.

Find out more about how Local Housing Allowance is calculated .

When joint tenants are not subject to LHA rules

Joint tenants in social housing are not subject to the Local Housing Allowance rules.

Joint tenants who are a household and not subject to LHA rules are entitled to the full contractual rent plus eligible service charges.

Where joint tenants are not in the same household and are not subject to the LHA rules, the total rent is apportioned for each joint tenant. The apportionment is usually an equal division of the total rent, unless there is evidence to support a different apportionment.

Find out more about the size-related criteria for universal credit housing costs element and restrictions on eligible rents for social rented sector tenants .

The maximum number of joint tenants that can own a legal interest in land is four. [ 14 ]

When more than four individuals are named on a tenancy agreement, the first four tenants become trustees who hold the tenancy on trust for the others. The other tenants become beneficiaries.

In practice, it can be difficult tell which tenants are the first four joint tenants with a legal interest in the tenancy and which are beneficiaries. This is normally only an issue if there is a dispute between tenants.

The beneficiaries do not hold a legal interest. Their interest is held on trust, but they are protected by the legislation governing residential tenancies. For example, the Protection from Eviction Act 1977 and assured shorthold tenancies under the Housing Act 1988.

The rights and obligations of a beneficiary

A beneficiary is not automatically jointly and severally liable under the tenancy. This means they can be pursued only in respect of their individual part of the rent, or other individual obligation.

A landlord is likely to treat a beneficiary as liable if the tenancy agreement states they are jointly liable. A tenant who wants to argue they are not liable needs legal advice and representation.

How a beneficiary can end the tenancy

A beneficiary cannot serve a valid notice to quit to end a periodic joint tenancy, unless the trustees delegate the power to the beneficiary.

If there is no delegation, the beneficiary would need to apply to the court under the Trust of Land and Appointment of Trustees Act 1996 for permission to serve a notice to quit.

A beneficiary might be able to leave a tenancy early if all other joint tenants and the landlord agree. The agreement of all parties could be a variation of contract.

As the beneficial joint tenant does not have a legal interest, a clear and unequivocal acceptance by all parties that they are no longer bound by the terms of the tenancy would release them from their obligations under the tenancy.

How a landlord can end the tenancy

A landlord must serve notice on one or all of the trustees to terminate a joint tenancy, not on a beneficiary.

Last updated: 12 December 2023

Hammersmith and Fulham LBC v Monk [1991] UKHL 6; Doe d. Aslin v Summersett (1830) 1 B & Ad 135; s.45(3) Housing Act 1988.

s.45(3) Housing Act 1988; unreported County Court case of Hacking v Jones (2012).

Hammersmith & Fulham LBC v Monk [1991] UKHL 6; Greenwich LBC v McGrady (1983) 6 HLR 36, CA.

Proctor v Proctor & Ors [2022] EWHC 1202 (Ch); Pile v Pile [2022] EWHC 2036 (Ch).

Hounslow LBC v Pilling (1993) 25 HLR 305.

Leek and Moorlands Building Society v Clark [1952] 2 QB 788.

Lloyd v Sadler 1978 QB 774.

para 6, Sch.1, and ss.1, 2, 3 and 28 Tenant Fees Act 2019.

Hickin v Solihull MBC [2012] UKSC 39; Cunningham-Reid v Public Trustee [1944] KB 602.

art.2 Housing (Tenancy Deposits) (Prescribed Information) Order 2007 SI 2007/797, as amended by s.30 Deregulation Act 2015.

para 2, Sch.1 Tenant Fees Act 2019.

p.39, Tenant Fees Act 2019: guidance for tenants, MHCLG, April 2019.

Sturgiss & Anor v Boddy & Ors [2021] EW Misc 10 (CC).

s.34(2) Law of Property Act 1925.