How to manage transition from fixed term to periodic

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    How to manage transition from fixed term to periodic

    My understanding is that the tenant can leave the property at the end of the fixed term without giving any notice. If they decide not to leave and so long as I do not give notice the contract becomes a periodic tenancy.

    Firstly, my concern is that the tenant could be indicisive about whether or not to move out at the end of the fixed term right up until the last minute. If they decide to stay then that is fine, but if they decide to leave you suddenly have a vacant flat.

    Is it OK to specify a notice period for ending the tenancy at the end of the fixed term? And can you stipulate a 2 month notice period to terminate the periodic tenancy?

    e.g.
    Initial Term of 12 months beginning 25 September 2009 and terminating at 11:59pm on 24 September 2010. After this date both parties agree that the contract will automatically carry on after the initial Term from month to month as a monthly tenancy until notice to end the tenancy has been given by either party.

    Notice to end the contract at the end of the initial term must be given by either party on or before 24 July 2010. After this date notice to end the agreement by either party must be given at least two months in advance and the tenancy must expire on the last day of the month.


    Any thoughts?
    Assume I know nothing.

    #2
    No, you cannot stipulate that they give you two months' notice. You cannot stipulate that they must give you any notice before the end of the fixed term.

    Most tenants, assuming they have been treated well, are decent and will let him/her know in advance when they plan to leave. If you end up with some chronically indecisive ones, I'm afraid it's just tough. However, if they carry on being indecisive past the last day of the fixed term, the tenancy, as you are aware, becomes periodic and they must give you one month's notice to expire at the end of a rental period. More significantly, they are liable for rent for the whole rental period regardless of when they decide to move out.
    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

    Comment


      #3
      Thanks for your response. Is it that such terms have been established as being legally unfair (on what basis?) or do they contravene statutory law?
      Assume I know nothing.

      Comment


        #4
        Originally posted by Brixtonia View Post
        Initial Term of 12 months beginning 25 September 2009 and terminating at 11:59pm on 24 September 2010. After this date both parties agree that the contract will automatically carry on after the initial Term from month to month as a monthly tenancy until notice to end the tenancy has been given by either party.
        Note: they do not need to 'agree' anything, really. It becomes an SPT unless:
        a. L ends it by s.21(1)(b) Notice; or
        b. T ends it by Notice to Quit (or simply vacating at end of fixed term).
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #5
          Originally posted by Brixtonia View Post
          Thanks for your response. Is it that such terms have been established as being legally unfair (on what basis?) or do they contravene statutory law?
          http://www.landlordzone.co.uk/notice_to_quit.htm

          Having said that, on closer inspection, the statutory requirement seems only to concern the LL's notice; perhaps Jeffrey could clarify this.
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

          Comment


            #6
            Originally posted by jeffrey View Post
            Note: they do not need to 'agree' anything, really. It becomes an SPT unless:
            a. L ends it by s.21(1)(b) Notice; or
            b. T ends it by Notice to Quit (or simply vacating at end of fixed term).
            Thanks Jeffrey. I find most tenants aren't all that familiar with the law so it does no harm to clarify to them that the contract turns into an SPT. If there is no allowance made in the contact it automaticallly turns into an SPT - but is there scope to vary the terms of the fallback statutory SPT by mutual agreement at the outset?
            Assume I know nothing.

            Comment


              #7
              Almost! What you ask would best be incorporated in the written AST. It could be granted for a combined term, defined as:
              a. fixed term; plus
              b. contractual (monthly?) continuation.
              If so, s.5(2) of the Act would be displaced. The continuation would be contractual (on the explicit conditions agreed by L and T) rather than statutory.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Originally posted by jeffrey View Post
                Almost! What you ask would best be incorporated in the written AST. It could be granted for a combined term, defined as:
                a. fixed term; plus
                b. contractual (monthly?) continuation.
                If so, s.5(2) of the Act would be displaced. The continuation would be contractual (on the explicit conditions agreed by L and T) rather than statutory.
                So presumably as part of a combined term I could stipulate a 2 month notice period for ending the tenancy at the end of the fixed period?
                Assume I know nothing.

                Comment


                  #9
                  Is 12-month AST enforceable, or can T escape after 6?

                  I have a tenant with a 12 month AST with no break clause. 6 months have now expired and she wants to leave. She is adamant that she can break it after 6 months even though the contract is for 12. I have pointed her to the advice on the Shelter website which says she is wrong.

                  However, a good agent who is letting another of my properties thinks that there may be some substance to what she is saying after a recent court ruling.

                  Anyone know anything about this?
                  Assume I know nothing.

                  Comment


                    #10
                    Yes, if it's done correctly (not DiY!)
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

                    Comment


                      #11
                      She (T) is wrong. She agreed to a twelve-month letting; she is bound by that. In this case, Shelter is right (but that's not always so!)
                      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                      4. *- Contact info: click on my name (blue-highlight link).

                      Comment


                        #12
                        Originally posted by Brixtonia View Post
                        there may be some substance to what she is saying after a recent court ruling.
                        Originally posted by jeffrey View Post
                        She agreed to a twelve-month letting; she is bound by that.
                        Could this be confusion over the rights of assignment? After reading the housing act section 15 and the OFT guidelines it seems that tenant could leave early if they find a suitable replacement tenant and cover all the costs so that the LL isn't out of pocket. LL can refuse any prospective replacement tenant with a valid reason e.g. the individual is unsuitable due to bad references, being an asylum seeker or on housing benefits etc.
                        http://www.opsi.gov.uk/acts/acts1988..._19880050_en_1
                        http://www.oft.gov.uk/advice_and_res...onsumer/oft356

                        Comment


                          #13
                          Originally posted by IanM View Post
                          Could this be confusion over the rights of assignment? After reading the housing act section 15 and the OFT guidelines it seems that tenant could leave early if they find a suitable replacement tenant and cover all the costs so that the LL isn't out of pocket. LL can refuse any prospective replacement tenant with a valid reason e.g. the individual is unsuitable due to bad references, being an asylum seeker or on housing benefits etc.
                          http://www.opsi.gov.uk/acts/acts1988..._19880050_en_1
                          http://www.oft.gov.uk/advice_and_res...onsumer/oft356
                          I have already agreed to do this since a) it would be the path of least resistance, b) aside from this matter I get on with them and c) the law considers it the landlord's obligation to mitigate any losses. She has been unable to find anyone for either the whole flat or to take on her room with the other joint tenant so she is now saying it is not her problem because of this 6 month issue!

                          Have just come back from showing an agent around and he is adamant that if such a case went to court a 12 month term would not be upheld (even though they stilll use them in all their contracts). It sounds crazy but given how much the law is stacked in favour of tenants it would not surprise me.
                          Assume I know nothing.

                          Comment


                            #14
                            Tell Agent that he's simply wrong. Invite him to read LZ, even if only as a guest.
                            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                            4. *- Contact info: click on my name (blue-highlight link).

                            Comment


                              #15
                              Originally posted by IanM View Post
                              Could this be confusion over the rights of assignment? After reading the housing act section 15 and the OFT guidelines it seems that tenant could leave early if they find a suitable replacement tenant and cover all the costs so that the LL isn't out of pocket. LL can refuse any prospective replacement tenant with a valid reason e.g. the individual is unsuitable due to bad references, being an asylum seeker or on housing benefits etc.
                              http://www.opsi.gov.uk/acts/acts1988..._19880050_en_1
                              http://www.oft.gov.uk/advice_and_res...onsumer/oft356
                              Section 15 only applies to periodic assured tenancies and in any event section 27 of the Landlord and Tenant Act 1927 (which requires consent to assignment not to be unreasonable withheld) does not apply.

                              The advice given by the OFT with respect to the mitigation of losses is wrong - I see the information pre-dates the case whch settled the matter.

                              Comment

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