When a tenant indicators a tenancy settlement, in the intervening time that is invariably for a time frame. Six months, a yr or no matter.
So what occurs when this fastened time period ends?
The reply is that it relies on
- Whether or not the tenant continues to be in occupation, and
- What kind of tenancy it was
If the tenants have moved out
The overall rule is that on the finish of a hard and fast time period, it ends. That is beneath a rule identified by legal professionals as ‘effluxion of time’.
What does that imply? Ending by ‘effluxion of time’ signifies that the tenancy or lease ends because of the ‘passage of time’ quite than by the incidence of a particular occasion.
So, it’s a part of the definition of a hard and fast time period that it’ll begin on day A and finish on day B. It will possibly’t proceed any longer, as that was all it was ever created to do.
The importance of this for tenants is that if they’ve moved out by midnight on the final day of the tenancy, the tenancy will finish, and they’ll don’t have any additional legal responsibility, e.g. for future lease.
Specifically, landlords can’t artificially lengthen the time period by saying that tenants can be accountable for an additional month’s lease (or no matter) in the event that they don’t give discover that they’re leaving. Any such time period can be void and unenforceable beneath the Unfair Phrases guidelines within the Shopper Rights Act 2015.
If the tenancy settlement says that (for instance) the fastened time period will finish on 24 June 2024, then that’s when it can finish.
So, if tenants transfer out by the top of the fastened time period, they’ll nonetheless be accountable for lease and different obligations incurred in the course of the fastened time period. However they can’t be held accountable for something after that.
If the tenants keep in occupation
Within the overwhelming majority of instances, the tenants could have a brand new ‘periodic’ tenancy which is able to begin instantly after the fastened time period ends.
There are two methods this could occur.
Statutory periodic tenancies
For assured and guaranteed shorthold tenancies, the brand new periodic tenancy will come up as a result of statute, i.e. part 5 of the Housing Act 1988, says it can.
” … the tenant shall be entitled to stay in possession of the dwelling-house let beneath that tenancy and, …, his proper to possession shall depend on a periodic tenancy arising by advantage of this part.” Housing Act 1988 s5(2).
For ‘frequent legislation’ tenancies, e.g., firm lets, a brand new periodic tenancy can be created beneath part 54(2) of the Regulation of Property Act 1925 if the tenants pay lease that’s accepted by the owner.
In the event that they don’t pay lease, or if the owner refuses to just accept it (or accepts it provided that no tenancy is created), then the tenant can be ‘holding over’ and could be evicted via the courts on the idea that they don’t have any proper to stay on the property. This case is kind of uncommon, although.
Contractual periodic tenancies
That is the place a periodic tenancy arises, not due to statute, however as a result of the tenancy settlement signed by the tenant says it can.
The benefit of this for the owner is that they will management the ‘interval’ of the tenancy quite than threat it being a protracted interval, reminiscent of six months, because of the manner the tenant has been paying lease.
It additionally places the owner in a extra beneficial place as regards council tax, as offered within the case of Leeds Metropolis Council v Broadley.
And at last
If the Renters Reform Invoice as drafted on the time of writing, comes into pressure, then fastened phrases will go, and all tenancies can be periodic.
This can make lettings much more versatile, from the tenant’s viewpoint, though landlords, significantly pupil landlords, can be aggravated if tenants resolve to maneuver out after only a few weeks. Significantly if they’ve needed to pay their brokers a hefty fee to seek out them.
Little doubt, new preparations can be developed for brokers’ fee, though the issue won’t come up if landlords are self-managing, for instance, with the assistance of a service reminiscent of my Landlord Regulation service.
We will should see if the act as drafted turns into legislation.
