Here is a question to the blog clinic from Juliet who is a landlord whose tenant has refused to sign a tenancy renewal
Written request sent asking if tenant wished to renew tenancy. Email response confirming to renew for 12 months. Agreement paperwork hand delivered for signature. No response.
Sent email confirming we would collect signed paperwork from property. On day new tenancy was to commence email received from tenant stating they would not be signing paperwork but ‘we shall opt for a Periodic Tenancy’.
They had held off paying last rent until just before the tenancy ended.
1. Can they do this without prior notification/agreement with the Landlord?
2. Can their rent be increased without a signed Agreement in place?
3. Or is the only way out now to issue Notice to Quit at the appropriate time?
Answer
There is often a lot of confusion over what happens at the end of a fixed term. Contrary to what many people think, this does not end the tenancy (and tenants who stay on against the landlords wishes are not squatters with no rights).
Under s5 of the Housing Act 1988 immediately after a fixed term ends, a new periodic tenancy is created on the same terms and conditions as the preceding fixed term tenancy, and which runs on from month to month (or week to week if the rent is paid weekly, etc) indefinitely.
So although a new fixed term (or tenancy renewal) may be desirable, it is not essential. Indeed it may sometimes be undesirable – for example:
- Either party may be unsure of future arrangements and be unwilling to commit to a further fixed term
- The tenant may have been unsatisfactory in the past in which case the landlord may want to allow him to remain ‘on approval’ on a month to month basis
Many, many tenancies continue on a periodic basis for many years and it is nothing unusual or indeed wrong.
To answer your specific questions:
1. Can they do this without prior notification/agreement with the Landlord?
It is perhaps not very polite or helpful on the tenant’s part to go back on an agreement with the landlord to sign a tenancy renewal form, but there is nothing a landlord can do to force the tenant to sign if they do not want to.
Other than perhaps threatening eviction.
2. Can their rent be increased without a signed Agreement in place?
Yes, if the tenancy is a periodic one, you can serve a statutory notice to increase the rent under s13 of the Housing Act 1988. This is a prescribed form (so an ordinary letter will not do) and needs to be completed properly.
The tenant has the right, if the rent is not a market rent, to refer the rent to the Residential Property Tribunal for review, but if this is not done within 1 month, the new proposed rent will take effect (after which there will be no appeal against it).
Note that if the rent is referred to the tribunal it can be increased as well as decreased (if the tribunal think it is less than the market rent) so referral is always a bit of a risk for tenants.
3. Or is the only way out now to issue Notice to Quit at the appropriate time?
Notices to Quit (which are a special form of notice) cannot be used for ASTs – this is specified in s5 of the Housing Act.
However, you can certainly serve a section 21 notice – provided all the preconditions are met (eg the tenancy deposit has been protected properly, etc).
Although if the tenants call your bluff and still refuse to sign the tenancy renewal – do you actually want to evict them?
To summarise
Although agents have created an impression that for a tenant to stay on they MUST sign a renewal form, this is actually incorrect. A periodic tenancy will be created automatically under the law if the tenants do not move out.
The law also provides for the landlord to increase the rent during this periodic tenancy, under the statutory notice procedure.
If the landlord is unwilling for the tenant to remain without a fixed term agreement in place he can always threaten to evict the tenant under s21 but this can be a long process (and expensive if you use solicitors) and on reflection you may not actually want to do that for a good tenant.
Note – Rent Increase Notices are available online to members of my Landlord Law service, along with a special guide for using section 21. Find out more about membership here. If you decide to evict your tenant see here.
For clarity, the fixed term tenancy does end. It is replaced by a new periodic tenancy.
It is important to keep in mind as it has consequences, not least on tenancy deposits protection.
True, but only for a about a millisecond before it is replaced by the periodic.
Practically it just runs on. Hopefully that particular deposit issue has now been resolved.
Ah but once it has ended, it has ceased to exist forever, not just for one millisecond!
There are still cases, including tenancy deposit protection, for which this is important, if not crucial.
I agree with Romain
But the main point that must be clarified here is that all that is being said only applies to STATUTORY Periodic tenancies which are run under section 5 provisions.
If it becomes a CONTRACTUAL periodic muche of what is being said here applies, including the use of s13 notices for example, which only apply to Statutory Periodics.
And although the fixed term has ended a new tenancy does not arise – it is the same one just that the fixed element of it has come to an end.
muche of what is being said here applies,
Should of course read
much of what is said here DOES NOT apply.
Reason I agree with Romain are there are circumstances when a tenancy goes periodic when it can still be beneficial to repeat TDP, especially the serving of the PI form.
The Dereg Act and the writing back to 2007 of the Statute have not cured all AST ills.
What do you do when the market (e.g. student lets) makes it hard to find new tenants apart from at a few fixed times in the year?
So you need the tenant to commit to the complete next year, or COMMIT to leaving on the date that the change over happens in the given market.
Tessa; you’re advocation bullying now?
“but there is nothing a landlord can do to force the tenant to sign if they do not want to.
Other than perhaps threatening eviction.”
You think that’s ok? Or you put it there to cover all your bases, while you look for your moral compass (you’re sure you had it somewhere, right?).
I wonder if you might try a little harder not to advocate such morally corrupt behaviour – even if it is (shockingly) legal. At the least, you might put some more disclaimers in, save looking like you just don’t really care? Your language is very important.
Re the periodic – well, who is best placed to decide on the preferred tenure here? Yep, that’s right; the tenants. To think, they even had the freedom to choose – it’s radical isn’t it. Landlords really must stop with this default assumption that: my needs trump yours. They just don’t.
@Rent Rebel Its impossible to generalise about rights and wrongs – all situations are different. All landlords and tenants are different.
The fact that something is possible does not mean I necessarily approve of it. Anyway, in the context of an advice post, my views are irrelevant. What I think about the law does not alter what it is.
I actually think it would, in most cases, be wrong for the landlord to evict a tenant just because they don’t want to sign a renewal form. But sometimes it may be appropriate. It depends.
“but there is nothing a landlord can do to force the tenant to sign if they do not want to.
Other than perhaps threatening eviction.”
Actually I missed this, and it is very significant.
If the threat is simply to serve a s21 or act on an existing one already sat on file and matured all well and good.
If the threat however is spoken and witnessed, or foolishly put in writing, that is harassment. And an offence.
Well it depends on how it is done. I don’t think it is illegal to say to a tenant (or even put in a letter)
“I’m sorry, we require all our tenants to be signed up to a fixed term agreement. If you are not prepared to do that we will have to consider terminating your tenancy through the courts via the section 21 procedure.”
Personally I don’t think its a good idea, but its not, so far as I am aware, illegal. Certainly local authorities are most unlikely to bring a prosecution on the basis of it. Or, if they did, get a conviction.
Its not a crime to say (or threaten that) you are going to evict someone under a legal process.
It may be harassment though if the landlord is not actually entitled to use section 21 because they have not protected the deposit properly …
It is harassment, of course. Just not the sort that anyone, who cd change it (e.g by abolishing the mandatory no-fault grounds for possession; as will very likely be happening in Scotland) gives an actual toss about. The “like it or lump it” approach is done to intimdate tenants and it’s working. Put simply: it’s bullying.
You are not some robot Tessa; void of social and moral responsibility. And you have a big audience; you can and should be putting those worthy disclaimers in.
I say in the article that landlords may not want to threaten s21 eviction for a good tenant.
Most landlords will prefer tenants to stay – probably the biggest fear landlords have, after non payment of rent and tenants trashing the property, is voids.
When I did eviction work, I cannot remember a single case where a landlord was just evicting the tenant for failing to sign a new fixed term agreement Normally it was for horrendous rent arrears.
Landlords who evict for bad reason will not be the sort to go round telling people of it. And those won’t even get to court; We all know that.
You mention aswell that landlords might want to evict because “The tenant may have been unsatisfactory in the past”.
That cuts both ways, of course – and when tenants are opting for periodic rolling tenancies, it might very well be because the landlord has been unsatisfactory in the past”.
Only one requires a reference though.
“Other than perhaps threatening eviction.”
Or increasing the rent to reflect the higher risk.
(Which would be the case in a situation like Ian’s above).
Yes, assuming the existing rent was lower than the market rent. Which in many cases it will be.
There is nothing illegal or unlawful to tell a tenant that the alternatives are a new fixed term tenancy or eviction.
However, it does not make sense for a landlord to proceed that way, as Tessa rightly points out.
As a former TRO responsible for enforcement and compliance with the Protection from Eviction Act in relation to harassment, if a tenant had come to me to complain that their landlord had said if they did not sign a new contract they would end the tenancy I would have told them that the landlord was within their rights to do so.
It is perfectly lawful for a landlord to put forward the requirement of a fixed term if the tenant wishes to stay – as long as they do so in a manner that could not be construed as threatening – except in so far that if terms could not be agreed the tenancy would be brought to an end. The situation would be different if the landlord turned up perhaps with a minder and said “sign this or you will be out”
It is little different to the circumstance where a landlord offers a fixed term agreement and the tenant says that they want an open periodic term. The landlord can refuse to enter the agreement.
I do wonder if the context might have been missed here – it might be worth asking why the tenant would prefer a periodic tenancy. For example, most letting agents charge for renewals which as a tenant I have always considered to be deeply unfair.
If this is the case, perhaps the landlord here could come to an arrangement with their tenant.
This questioner did not say that there was a renewal fee, but if there was this would be a reason to prefer to remain under a periodic!
My understanding is that the renewal fees are mostly charged by agents to their landlord clients for their work in negotiating a new fixed term, but I understand that tenants do sometimes get charged too.
I have to say that I tend to agree about the unfairness of renewal fees, particuarly if they are charged to both landlord and agent. But from the question, it does not look as if this was an issue here.
Context – yes, it’s everything. And we’re often left to just speculate on here. As I said, could be the landlord isn’t one that the tenants think highly of (I know it’s hard to get your head around, but..) Extortionate and OTT fees really do put tenants off aswell; that’s true.
” There is nothing illegal or unlawful to tell a tenant that the alternatives are a new fixed term tenancy or eviction.”
That’s correct. I didn’t dispute the legal point. If you can’t see the inherent power trip in there; I really can’t help you.
” It is little different to the circumstance where a landlord offers a fixed term agreement and the tenant says that they want an open periodic term. The landlord can refuse to enter the agreement. ”
The large and very real difference being that one party can end up homeless. No choice is not A choice.