Statutory periodic tenancy vs contractural periodic tenancy.

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    Statutory periodic tenancy vs contractural periodic tenancy.

    Having learned that a tenant without giving notice is still liable for council tax if a contractural periodic tenancy comes onto force at the end of a 6 month fixed term simply by adding this to the agreement, are there any disadvantages for a Landlord in adding this to a contract such as a change in timing of section 21 for instance or is everything pretty much the same other than the tenant is on the hook for council tax until they properly surrender the property ?

    #2
    A contractual periodic tenancy isn't the same as a statutory periodic tenancy in a number of areas.

    Whether they're positive or negative is a personal thing (I think that the latest RLA agreement creates a contractual periodic tenancy for example).

    A significant change is that with a contractual periodic tenancy, the contractual notice periods aren't replaced by legislation when the tenancy becomes periodic, for example.

    A practical issue is that they're not that well understood, and I can imagine getting a local authority, tenant or court to understand would be an issue.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      If you provide for the tenancy to be periodic at the outset then, even if the first period is longer than each subsequent period, you only have one tenancy. Advantages of that are (a) you only need to protect any deposit once (b) you do not need to consider whether any inventory and/or schedule of condition needs to be updated (c) any terms of the tenancy relating to notice and increasing rent will always apply.

      You need to get the drafting right, in particular avoiding complications. Definitely to be avoided is assigning different notice periods to landlord and tenant.

      Note on terminology:

      Fixed term tenancy: A tenancy which will end on a specified date.

      Periodic tenancy: A tenancy where at any given moment the maximum duration of the tenancy can be ascertained.

      Tenancies are either fixed or periodic.

      (The above ignores statutory intervention and oddities like tenancies at will.)

      Elsewhere (referring to them as "fixed term plus") I have suggested that a tenancy can start off as fixed term and continue as periodic. That does not fit in with the above definitions and on that account should be considered incorrect. Whilst it may be considered convenient to think of a tenancy granted for, say, "six months from X and thereafter from month to month" as being something of a hybrid it is a periodic tenancy. As I said above, the first period can be longer than each subsequent period. However, from the point of view of analysing why a periodic tenancy complies with the requirement that the duration of a tenancy must be certain, the law considers the tenancy has having been granted initially for a fixed period. Accordingly, every periodic tenancy starts with a fixed period, but that does not stop fixed term tenancies and period tenancies being two distinct things.

      Comment


        #4
        For section 21 purposes, it is a fixed tenancy.

        Comment


          #5
          For section 21 purposes, if in Wales the notice must end on the last day of a period of the tenancy. If the period is longer than monthly, then the length of the notice will be more than 2 months.
          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

          I do not answer questions through private messages which should be posted publicly on the forum.

          Comment


            #6
            Originally posted by leaseholder64 View Post
            For section 21 purposes, it is a fixed tenancy.
            Which can cause a delay if you have an uncooperative tenant, because you can't use a s21 notice until you bring the fixed tenancy to an end.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              Originally posted by jpkeates View Post
              Which can cause a delay if you have an uncooperative tenant, because you can't use a s21 notice until you bring the fixed tenancy to an end.
              What I meant is that section 21 is worded so that, if the tenancy starts as a fixed tenancy, it doesn't matter whether the continuation is statutory or contractual. The notice period is still not linked to the rental period.. This is 21(1), 21(1)(a) excludes an "assured shorthold periodic tenancy (whether statutory or not)" in deciding whether there is an ongoing tenancy for this purpose.

              If the tenancy starts as periodic, it then matters whether or not it is in England, as sub-paragraph 4ZA removes the requirement to align with a period of the tenancy.

              Comment


                #8
                Assuming you mean that a CPT could be under s21(1), I'm not convinced that's correct.
                I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                I do not answer questions through private messages which should be posted publicly on the forum.

                Comment


                  #9
                  Originally posted by leaseholder64 View Post
                  What I meant is that section 21 is worded so that, if the tenancy starts as a fixed tenancy, it doesn't matter whether the continuation is statutory or contractual.
                  If my definition of a fixed term tenancy is correct, that is that it is a tenancy which only has one possible end date (excluding any early termination by surrender, forfeiture, exercise of a right to break or whatever other than effluxion of time) then a tenancy granted for any length of time and expressed one way or another to continue as a periodic tenancy is not a fixed term tenancy.

                  Comment


                    #10
                    Originally posted by Lawcruncher View Post

                    If my definition of a fixed term tenancy is correct, that is that it is a tenancy which only has one possible end date (excluding any early termination by surrender, forfeiture, exercise of a right to break or whatever other than effluxion of time) then a tenancy granted for any length of time and expressed one way or another to continue as a periodic tenancy is not a fixed term tenancy.
                    The sub-paragraph in question only applies after the end of "fixed tenancy", but explicitly includes the possibility of an SPT, or other periodic continuation.

                    Comment


                      #11
                      But the point is that subsection (1) applies "on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy". If the tenancy was never fixed term, subsesction (1) does not apply.

                      Comment


                        #12
                        The other advantage of a contractual periodic tenancy for the landlord is that the council tax liability is clearly with the tenant as long as the first period of the CPT is at least 6 months.

                        Comment


                          #13
                          I can't help feel that the issue of a tenant fudging a few days council tax isn't serious enough to cause someone to switch to a contractual periodic tenancy.

                          There's a lot of other things that would need to change in parallel (including educating the tenant that their tenancy worked in a different way than most people's when it comes to notice, for example).
                          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                          Comment


                            #14
                            I agree that on its own it might not persuade them, but I think its about the accumulation of benefits, including the requirement to give notice at the end of the first term etc. It seems to have been enough to persuade the landlord associations to make their model tenancy agreements CPT by default too, which has an impact on people's choices.

                            Comment


                              #15
                              Originally posted by jpkeates View Post
                              I can't help feel that the issue of a tenant fudging a few days council tax isn't serious enough to cause someone to switch to a contractual periodic tenancy.
                              A few days, no, but if T moves out (or tells council they moved out) a month or more before ending the tenancy, then yes.

                              It also removes any possibility of failing to do anything that needs to be done (either existing or future requirement) when a SPT arises.

                              Comment

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