Tenancy at Will

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    Tenancy at Will

    Does anyone have a simple Tenancy at Will template I can use to document a short term commercial let?

    Also given this is a temporary occupation
    1. Can I still request a security deposit?
    2. How would this be documented?

    Many Thanks

    #2
    A tenancy at will is a bit of a slippery thing. One the whole you only argue you have a tenancy at will when things go wrong, for example you let someone in on the basis that they sign later and they never sign. Since it is in the nature of a tenancy at will that it can be ended at any time, anything such as notice provisions or providing for rent to be paid in advance will suggest you have agreed a periodic tenancy, A security deposit which covers rent may do the same.

    It is in fact unnecessary to take the risk because there are two more secure ways of granting a temporary tenancy without statutory security of tenure.

    If the tenancy is to be for a term of six months or less you can grant a fixed term and it will not have security of tenure. There are though traps for the unwary. The statutory provision provides that statutory security of tenure:

    does not apply to a tenancy granted for a term certain not exceeding six months unless—

    (a) the tenancy contains provision for renewing the term or for extending it beyond six months from its beginning; or

    (b) the tenant has been in occupation for a period which, together with any period during which any predecessor in the carrying on of the business carried on by the tenant was in occupation, exceeds twelve months


    Paragraph (a) means that the tenancy must be for a fixed term. It must not in any way be expressed to continue as periodic and the terms of the tenancy must not grant any option to take a new tenancy. For belt and braces there should be nothing in the terms about what happens after the tenancy ends. Once the tenancy ends you cannot (unless you have granted a new tenancy - as to which see below) demand or accept rent. If you do a periodic tenancy with statutory security of tenure will arise.

    Paragraph (b) means that:

    (i) Any period the tenant is in occupation before he signs counts.
    (ii) You can grant a succession of tenancies so long as in total they do not exceed twelve months and no tenancy exceeds six months. So, you can grant two six month tenancies; four three months tenancies; a six month tenancy followed by a four month tenancy and so on.
    (iii) It is best to avoid granting a tenancy to someone who is taking over a business from another tenant as that tenant's period of occupation counts.

    If the tenancy is to be for more than six months you follow the procedure to contract out of statutory security of tenure: see here: https://www.propertymanagementguide....ness-tenancies

    Comment


      #3
      Thanks for that, the tenant has a contracted out lease due to end in June and they want to stay temporarily for a few extra months (which is fine for me until a new tenant is found). I have found a Tenancy at Will template which seems to do what we both want, it does provision for rent monthly in advance and allows for immediate termination but no provision for a deposit (which im not overly concerned about)

      we simply wanted to save costs on such a short term agreement, so if it is properly documented and accepted as a tenancy at will on both sides then is it still at risk of being considered a periodic tenancy?

      Comment


        #4
        A precedent for a tenancy at will which provides for rent monthly in advance is a precedent to be avoided. Both payment in advance and at regular intervals are incompatible with the basic point of a tenancy at will which is that it can be ended at any time. As I suggested above, setting out to specifically grant a tenancy at will is fraught with danger if an important concern of the landlord is not to grant the tenant statutory security of tenure.

        If you want to be certain of avoiding granting statutory security of tenure you have to get all your ducks in a row at the start and equally importantly make sure you keep them in a row. The only safe option when a contracted out tenancy is nearing its end and the tenant wants to renew, even if only for a very short period, is to make sure you have a new contracted out tenancy set up to take effect immediately after the existing one ends.

        Whether you draw up the papers yourself depends on how confident you are of getting them right.

        Comment

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