Today I am going to look at something which puzzles a lot of people – fixed terms and periodic tenancies.
However this is not the case. Both the Housing Act 1988 – the act which created the assured shorthold tenancy rules which govern most tenancies today, and the Rent Act 1977 which governs tenancies which were created earlier, provide for tenancies to carry on after the initial period (the ‘fixed term’) has ended.
It is section 5 of the Housing Act 1988 which normally applies. This says that when the initial ‘contractual’ fixed term given to a tenant has ended, the law creates a new tenancy which follows on immediately after.
This new tenancy:
- covers the same premises
- is subject to the same terms and conditions
- runs from month to month or week to week (or sometimes for other periods) depending on how the rent is paid
The only way a tenancy can end, is by the tenant giving up possession, or by the landlord getting a possession order from the court.
Differences between fixed terms and periodic tenancies
The two types work in different ways. For example
Rent : Normally you can’t change the rent during the fixed term. However you can increase the rent in a periodic tenancy every year by a special notice (which is in a prescribed form – you can’t use any old notice)
Tenants notice : tenants do not have to give any form of notice if they leave at the end of the fixed term (something which annoys landlords greatly) – they can just go. However if they have a periodic tenancy they have to give notice – generally this is for a full ‘period’ of their tenancy, and the notice period should end on the last day, so if they give notice part way though a period it will need to be longer.
Landlords notice : the format of the section 21 notice required is slightly (but significantly) different depending on whether it is served during a fixed or a periodic tenancy. Many landlords have lost their case at court because they served the wrong one.
So, as you can see, it is important that you know which type of tenancy you are dealing with. Are there any differences I have missed?