This is day 30 of my 31 days of tips on tenancy agreements series. To see the rest of the series click here.
Tenancy agreements renewals
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). However although this can be a good idea, it is not always necessary. I wrote about this in my ‘Urban Myth’ post here.
As I said there, section 5 of the Housing Act 1988 automatically renews a tenancy on a periodic basis (the period based on how rent is paid) after the fixed term ends. So the tenant will have, usually, a monthly periodic tenancy, on the same terms and conditions as the preceding written agreement.
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 as discussed on day 25, the landlord may not be able to prevent the tenant moving out so long as he is able to find a suitable replacement.
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 and has served a section 21 notice, but is allowing him to stay on, on a month by month basis, provided he complies with the terms of the agreement. The effect of signing a new tenancy or renewal form will be to cancel any section 21 notice served, and will mean that the landlord will not be able to evict the tenant under s21 until the new fixed term has ended.
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). We have a renewal form which is available for landlord members of Landlord Law.
Do you have any comments on this section? Do you regularly renew your tenancies or do you allow them to roll on as periodic tenancies? Do you think agents are justified in charging renewal fees? Do you use a renewal form or give the tenant a complete new tenancy agreement?
Tomorrow is the final post in this series
NB Read about my tenancy agreements service here.
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