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Tenancy Agreements 33 days of tips – Day 31 – Renewals

August 9, 2017 by Tessa Shepperson

day31

Tenancy agreement renewals

There seems to be a general fiction that tenancies need to be actively ‘renewed’.

For example, it is customary for letting agents to arrange for a new agreement to be prepared and signed at the end of the fixed term – and to charge a fee for this.  This fee forms a substantial part of many agents’ income and is, one suspects, the main reason why this fiction exists.

However although renewals can be a good idea, they are not actually necessary.

This is because section 5 of the Housing Act 1988 provides for all assured and assured shorthold tenancies to continue through a new ‘periodic’ tenancy which will be created automatically immediately after the fixed term ends.

So the tenancy will carry on anyway.  The tenant will not suddenly turn into a squatter the day after his fixed term ends.

When are renewals appropriate?

Generally in the following circumstances:-

  • If the landlord wants to increase the rent: This is the most important reason for getting the tenant to sign a new document, as once this is done he cannot challenge the new rental figure – as he has agreed to it.
  • If the landlord (or the tenant) wants the security of a fixed term: Although this may be illusionary – for example, if a tenant falls on hard times and fails to pay rent they will turn from an asset into a liability.

It may be better to allow the tenancy to roll on as a periodic if:-

  • Either the landlord or the tenant’s future plans are uncertain and they want to retain the flexibility of a periodic tenancy
  • If the landlord is unhappy about the tenant.  Here it will often be better to allow the tenancy to continue as a periodic as it will allow the landlord more flexibility if the tenant’s behaviour deteriorates.  The last thing the landlord should do is give a new fixed term of 12 months to a tenant whose behaviour is unsatisfactory.

Renewals forms

If you do decide to renew the tenancy, it is not necessary to have a whole new agreement. You can use a short ‘renewal form’.

This will provide details of the new fixed term and rent, and state that all the other terms and conditions of the preceding agreement will apply. Provided you are happy with the original agreement, renewal forms are a good idea – they are simpler and use up less paper (so are better for the environment).

Landlord Law Tenancy AgreementsNB Find out more about my Tenancy Agreement Service on Landlord Law

Note that there is also a renewal form which members can use to renew their tenancy without having to create a whole new tenancy agreement.

click-here

 

 

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IMPORTANT: Please check the date of the post above - remember, if it is an old post, the law may have changed since it was written.

You should always get independent legal advice before taking any action.

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About Tessa Shepperson

Tessa is a specialist landlord & tenant solicitor and the creator of this site! She is a director of Landlord Law Services which now hosts Landlord Law and other services for landlords and property professionals.

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If you rent property - you need a tenancy agreement!

The 33 days of Tips

Tenancy Agreements Tips During 2017 I published a weekly series of tips on tenancy agreements.

You will find an index here, along with other tenancy agreement related resources.

Index

  • Day 1: Introduction
  • Day 2: Why use one?
  • Day 3: Tenancy or license?
  • Day 4: Tenancy types
  • Day 5: Shared houses
  • Day 6: Right to Rent
  • Day 7: Parties
  • Day 8: Addresses
  • Day 9: Guarantees
  • Day 10: Letting agents
  • Day 11: The Property
  • Day 12: Rent
  • Day 13: The Term
  • Day 14: The Deposit
  • Day 15: Inventories
  • Day 16: Unfair terms (1)
  • Day 17: Unfair terms (2)
  • Day 18: Bills
  • Day 19: Penalty Clauses
  • Day 20: Business use
  • Day 21: Repairs
  • Day 22: Insurance
  • Day 23: Notices
  • Day 24: Inspections
  • Day 25: Ending
  • Day 26: Assignment
  • Day 27: Left items
  • Day 28: Student lets
  • Day 29: Pets
  • Day 30: Preparation
  • Day 31: Renewals
  • Day 32: Reviews
  • Day 33: Finding

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The purpose of this blog is to provide information, comment and discussion.

Although Tessa, or guest bloggers, may from time to time, give helpful comments to readers' questions, these can only be based on the information given by the reader in his or her comment, which may not contain all material facts.

Any comments or suggestions provided by Tessa or any guest bloggers should not, therefore be relied upon as a substitute for legal advice from a qualified lawyer regarding any actual legal issue or dispute.

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