What happens when your fixed term tenancy ends?
If you ever questioned what happens when your assured shorthold tenancy (AST) expires, then this article can be your guiding light. There’re more than one possible scenarios and we’re going to put you through each of them.
But first, let us start with the basics. Each tenancy agreement specifies a predefined period of time which the tenancy will last for. Normally you would sign it for six months or a year but there are always exceptions although they’re quite uncommon. Since we’re talking about a fixed period of time, it is logically called a
fixed term of the tenancy. But what happens when this period of time ends?
If you’ve decided to remain in occupation of the property:
Your landlord didn’t give you the notice to leave, you two seems to get along and the property is a fair deal, which you want to keep flowing smoothly – still you’re fixed term tenancy is about to end – what's happening next?
Even if there’s a clause in your AST, which states that after the fixed term period you’re under the conditions of a contractual periodic tenancy agreement, which allows the tenant to continue to live in the rental property after the fixed tenancy period is over, and you seems to be safe and sound by all terms, the tenancy will still end at midnight on the last day of the fixed term.
If you remain in occupation of the provided property without signing a new fixed term tenancy or
renewal, then as soon as the fixed term tenancy has ended, a new
periodic tenancy will be created automatically in its place. This means that the tenancy will continue on a periodic basis until a new fixed term tenancy or
renewal document between you and your landlord is signed. Some tenancies remain on this basis for years without any new formalities have been made. Have in mind that your landlord is not obligated by the law to provide you with a new fixed term or renewal.
Although this option leaves some spot for insecurity it still is considered as a decent decision, especially if you or your landlord are uncertain about any future plans. Plus this means that your rent will remain stable, since the periodic tenancy doesn’t provide your landlord with the preference to increase it. So basically it’s flexibility over security. Depending on the current circumstances you can insist on a new fixed term or just let the things follow their natural course. All you have to do is to measure the pros and cons and decide which suits you best.
Actually, the only ones who are keen on for tenancies to be renewed are the letting agents, since this will bring them the benefit of an extra renewal fee. So have this in mind when they start their common sweet talk.
If you want to leave
In case you don’t want to stay in the property even a minute longer after your fixed term tenancy expires, all you have to do is simply to leave the place you used to call
home before the end date. Nothing can stop you if you’ve decided to move out. Just don't forget to hire a cleaning agency to take care of the mess you left, otherwise you might never see your initial deposit again.
In the moment you close the door behind you the tenancy ends as if it never existed. This is under a rule quaintly known by lawyers as
effluxion of time. Long story short – that’s the end of your tenancy. You don’t have any emanative legal obligations and would no longer have any liability under the tenancy, and your former landlord no longer has any right to charge rent.
You’re not obligated to provide any kind of notice to your landlord even if your contract says so. Even if there’s a clause in your contract, which requires the tenants to give notice if they want to leave at the end of the fixed term and which provides for them to pay
rent in lieu of notice if they don’t. Any clauses demanding this will almost certainly be void under the Unfair Contract Terms regulations. You’ve only signed up for a specific period of time so any clause forcing you to stay longer or attempting to make you liable for continuing rent if you’ve already moved out of the property will be considered
unfair and therefore unenforceable.
Still, we strongly advise you to give your landlord a notice that you’re leaving in advance. Simply because it’s the right, decent thing to do, plus your efforts will be rewarded later – who would pass a promising future tenant who has not only stable income but a good reference as well?! A few minutes of your time will pay off for sure and add some glamour in your resume.
How the periodic tenancies are created?
There are basically three options if the tenant decides to remain in the property and no renewal has been signed:
- If the tenancy is an assured shorthold tenancy (AST) – which is the most common case
- If the tenancy is a
common law/unregulated tenancy (this fixed-term tenancy is signed for a residential property, when an AST is inappropriate; for example, a letting to a company, a tenancy where the annual rent is more than £100,000 or less than £750 (or £1,500 in Greater London) or where the landlord is a resident landlord)
- If the tenancy agreement provides for a contractual periodic tenancy
According to the terms of an AST, when the minimum term expires, the tenancy will continue due to the statute. Section 5 of the Housing Act 1988, which set up and regulates assured and ASTs, states that in this case, a new tenancy will arise. Agreeably with the Act, if the tenant remains in occupation after the end of the fixed term, a new periodic tenancy between you and your landlord in respect of the same premises, and under the same terms and conditions, will be automatically created on its place. The new tenancy will run from period to period – normally monthly or weekly. This sort of periodic tenancy is known as a
statutory periodic tenancy– because it was created by statute (the already mentioned Section 5 of the Housing Act 1988).
In the second case, you would find yourself under the terms of common law or unregulated tenancy. If you decide to stay after the fixed date by the meaning of this type of agreement the law will imply a periodic tenancy where the tenant pays and the landlord accepts rent. If you’ve signed a contract, which points a fixed term of 3 years or less, a new tenancy will be created automatically without the need of a formal written tenancy agreement deed. This is stated under Section 54(2) of the Law of Property Act 1925. The only circumstances, which would abort the creation of a new tenancy, will be if the tenant fails to pay rent or the landlord refuses to accept it. If your landlord wants to recover possession of the property he or she still has to get a possession order through the courts.
The last options, that creates a periodic tenancy, is to be leaving under the terms of a tenancy agreement which provides for a contractual periodic tenancy. This is the most unusual situation. This type of settlements only exists if the tenancy agreement specifically provides for them. In this case, if you don’t move out the tenancy would not actually end at all – it will continue on a periodic basis, as set out in the agreement – normally as a monthly periodic tenancy.
Don’t worry that you’ll be treated as a criminal or your only option left would be to become homeless overnight, if you decide not to leave the rental property when your fixed term ends. You have the right to stay in until evicted through the courts (but this is the worst possible scenario, which you can always avoid – read how in our article, devoted to the election process).
Still, have in mind that the only circumstances where your landlord can’t start an eviction process are if the tenant has a protected tenancy under the Rent Act 1977. But no Rent Act protected tenancies have been (or can be) created since January 1989, so this is not going to happen with tenancies from this millennium.
In the vast majority of cases, if a tenant stays in the rental property after the end of the fixed term even without signing a new agreement, he or she will continue to have a tenancy – a periodic one, which will remain under the terms of the preceding tenancy agreement.