Saturday, October 31, 2009

Urban Myth - tenancies must be ‘renewed’ when the fixed term ends

Note - the Landlord Law Blog has now moved to

This is a myth largely created by letting agents, as an important part of their income stream comes from charging landlords for ‘renewals’ for tenants. But they are not actually necessary.

In a way, this post follows on from my last Urban Myth post about tenants staying on after the fixed term not being squatters. In that post I explained that under the Housing Act, assured and assured shorthold tenancies continue automatically after the end of the fixed term, as either a monthly or weekly ‘periodic’ tenancy, depending on how the rent is paid.

This does not mean to say that tenancies should not be reviewed at the end of the fixed term. Or, so far as the landlord are concerned, two months before the end of the fixed term, as that is the length of notice he will have to give if he wants them to leave.

However many, many tenancies run on as periodic tenancies quite happily for years. Often landlords and tenants prefer the flexibility of a periodic tenancy and do not want to be tied in for a longer term. For example if tenants expect to be moved to another town for their job but do not know exactly when.

The most important reason for ‘renewing’ a tenancy is to increase the rent. This is often done at this time, as if a tenant signs a new tenancy agreement or renewal form with the new rent, they cannot then challenge the rent figure if they think it is too high.

Another important reason for ‘renewing’ a tenancy for a further six months or a year, is to create certainty, and tenants often want the security of a fixed term, where they can only be evicted if they fail to pay rent.

However if you and your tenant would prefer the tenancy to roll on on a periodic basis, do not allow your letting agent to bully you into a ‘renewal’ for a further fixed term.


Do you know of any 'urban myths'? Or have you had any problems with this particular urban myth? Please post a comment if so, I would love to hear from you.

Click here to see all the Urban Myths.

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photoguy said...

Thanks for your useful and interesting blog. I have an issue with an AST that I wonder if you can help with. My landlord's agent has written to me informing me that my fixed-term AST is coming to an end on 29th Nov, and asking my to inform them if I wish to extend by another 6 or 12 months. The letter states that if I do not wish to renew, then the landlord 'may choose to issue you with a eviction/possession notice under the terms of section 21 of the housing act 1998'. I wish to remain in the property for another 1 month beyond the 29th Nov, i.e. until 29th Dec, as I am buying a property and expect to exchange contracts by 29th Dec, so I do not wish to renew the tenancy on a 6 or 12 month basis, but am prepared to give 2 months notice from today. I've informed the agent of this today verbally, and he is now saying that as I do not wish to renew the tenancy, I will be required to vacate the property on 29th Nov without any further written notice and that the landlord is not required to issue any notice under section 21. I've been a tenant here for 2 years and have always paid the rent without delay, via standing order. Could you advise if this is correct - and it seems to run counter to any information that I can find?

Many thanks


Tessa Shepperson said...

The only way a landlord can require a tenant to vacate residential accommodation such as an AST, is via the County Court Bailiffs after an order for possession has been obtained from a Judge (and the order will only be made if the proper notices, e.g. s21, have been served first).

If a tenant is forced to leave in any other way this is in breach of the Protection from Eviction Act 1977 and is a criminal offence.

As it takes several months to obtain a possession order (even if things go well) I don't think your landlord can prevent you staying on for an additional month.

If your agent continues to make these threats, you can complain to the Housing Officer at your Local Authority, local authorities being the prosecuting organisations for this offence (the Police won't be interested).

photoguy said...

Wow, fantastic - thanks for getting back to me so quickly. This is very helpful and reassuring - I just don't understand why agents and landlords act in this way, when I'm only trying to act in good faith. I guess that I should therefore insist that the landlord serves notice under s21 if he wants me to vacate. Thanks so much for your advice..

Anonymous said...

Good clarification. Question - if at renewal a new TA is signed, are the accompanying documents (eg inventory, tenancy deposit, guarantor forms etc)from the initial TA OK to roll-over into the new TA, or do they all need re-signing at renewal??

Tessa Shepperson said...

It depends. You should certainly get a new guarantee deed signed. The inventory is probably OK so long as no new tenant is coming in (when it may need to be re-done). Tenancy deposits - follow the rules of your scheme.

Anonymous said...

Just to make the point that the Landlord may well not know that the Agent has been bullying you like this. If at all possible I think you should contact the Landlord direct to explain the situation - in my experience Agents often are looking after themselves, not the Landlord or the Tenant! BTW, I am a Landlord myself.