What is a periodic tenancy?

Any properties can be let on a periodic tenancyA periodic tenancy is a tenancy which runs from month to month, or less commonly from week to week. Some run from quarter to quarter or even year to year, but the vast majority run from month to month.

Periodic tenancy v. fixed term tenancy

Most people think of a tenancy as being granted for a period of time, typically six months or a year. Very few tenancies, in the private sector anyway, start out by being periodic. This generally happens when the fixed term ends.

If the tenancy is an assured shorthold tenancy (which most are) the Housing Act then provides that it will run on, on a month by month or week by week basis, depending on how the rent is paid.

Lets say John Brown has a six month tenancy of 32 Astreet, which runs from 23 January, and that he pays £500 per month. At the end of the fixed term he stays on in the property.

Under the Housing Act (section 5) therefore, he will then have a monthly periodic tenancy. This will start immediately after his old tenancy ended on 22 July and so the ‘period’ will be from the 23rd day to the 22nd day in the month. Or you could also say that a new period will start on the 23 day of every month.

The rent will be the same and the terms will be the same as the terms and conditions of the preceding fixed term tenancy agreement.

This will generally also happen even if you don’t have an AST. If the tenant stays on after the end of the fixed term and pays rent which the landlord accepts, then a periodic tenancy will be implied.

So it is quite wrong when people say that people staying on after the end of the fixed term don’t have a tenancy, or even that they are squatters. They are proper tenants with a tenancy agreement.

Statutory periodic tenancy v. contractual

If a tenancy arises because an act of Parliament says it will, this will be a ‘statutory periodic tenancy’.  For example if an AST runs on after the end of the fixed term.

However generally this term is used for Rent Act tenancies where the original ‘protected tenancy’ is ended by a Notice to Quit but the tenant is entitled to stay on.  Why are they entitled to stay? Because statute says so (which is why it is called a ‘statutory’ tenancy).  These tenants are generally very difficult to evict (unlike assures shorthold tenants).

A periodic tenancy however will be ‘contractual’ if it exists because the parties have agreed that it will.  Rater than because of a statute.

Is a periodic tenancy a good idea?

One reason why many people don’t know about periodic tenancies is because letting agents always insist on doing ‘renewals’. This is often done simply because it is something they make a charge for, irrespective of whether it is in anyone’s interest to have a further fixed term.

A renewal can be a good idea, as it gives both landlord and tenants security for a further period. It is also a good opportunity for the landlord to increase the rent.

However sometimes they are not a good idea. If the tenant’s plans are uncertain for example, and he thinks he may be posted to Aberdeen for his work, he should not sign a new 12 months fixed term!

Landlords are best advised to allow a tenancy to run on as a periodic tenancy if the tenant is proving problematic, as then if the situation deteriorates they will not have to wait until the end of the fixed term to evict them from the property.

Giving a new fixed term to a tenant you are unhappy with and have considered evicting due to their bad behaviour is NOT recommended.

Creating a periodic tenancy from the beginning

It is also possible to give a tenant a periodic tenancy from the start rather than a fixed term of six months or a year. You do this by giving them an initial term of just one month (or a week, or four weeks) and then just allowing it to run on.

For example you can do this using any of the Landlord Law tenancy agreements.

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Important note. If you are reading an old post, remember that the law may have changed since it was written.




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10 Responses to What is a periodic tenancy?

  1. A lot of housing benefit departments won’t pay out on periodic tenancies. Insisting on renewals regardless of tenants or landlords wishes which is a bit much considering how much it can cost.

    One way around this is for the landlord to sign a declaration, which is a standard HB form but I find they often don’t offer this without being asked

  2. Am I right in thinking, if you give a tenant a tenancy agreement for, as in your example, one month and then let it run on as a periodic tenancy, a landlord will not be able to evict the tenant if there are any problems before a 6 month tenancy period has passed?

  3. You can start the proceedings during the first six months (and so you can get a head start on landlords who give tenancies for six month fixed terms) but no, the Judge cannot make the order for possession for a date during the first six months of the tenancy.

    However it CAN be made for the first day after the end of the six months (I did this once).

  4. Hi Tessa,

    You taught me something new today about starting the tenancy with a periodic rather than an AST. Thank you. However, if you can’t regain possession until 6 months has expired then surely there’s no benefit to starting as a periodic from a protection perspective other than to allow you tenant to move out sooner?

    I have done a 6 week let before on an AST would I have been better off using a periodic?

    Thanks in advance,

    Phil

  5. May I check regarding periodic tenancies after fixed term ASTs? Is it possible to set up terms in the AST which will create a periodic tenancy after the fixed term that is not bound by the same rules as an SPT – for example, a longer notice period. I have been told this is possible (contractual periodic tenancy) but think if it is possible, why are all periodic tenancies not so created?

  6. @ Phil All fixed term tenancies turn into periodic’s if the tenant stays on. Just if the initial term is for one month or a week the periodic bit starts sooner.

    @Snorkerz Yes indeed you can evict, technically, under other grounds during the fixed term, but it would be difficult practically to get the case to court within that time, unless you started very soon after the tenant went in.

    Re your second comments, you can provide for a contractual periodic tenancy after the end of the fixed term but you need to watch out for the unfair terms in consumer contracts regs if setting up longer notice periods, and it may not be possible to do that : http://www.landlordlawblog.co.uk/2010/05/15/tenancy-agreements-31-days-of-tips-day-15-unfair-terms-1/

  7. There’s one aspect on which I’d like to know your opinion, which has been debated (at length) on the landlordzone forum and also discussed on the Nearly Legal blog. It’s the question of tenancy periods (as per s.5(3)(d) HA1988 – “under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy”).

    There are two schools of thought, I believe. Those who assert that tenancy periods are equivalent to rental periods/payments, and those who (like me) believe that the two are not the same, and that the length of the period is dictated by the *frequency* with which rent is payable, not the date that rent falls due.

    For example, if a fixed term commences 1st Jan and expires 30th June, but with rent payable on the 5th of the month, then I believe that the tenancy periods of the periodic tenancy would run 1st – last day of the month commencing 1st July, not 5th – 4th (because the periodic tenancy must commence 1st July, and it seems nonsensical that the first period could be less than a month).

  8. @Westminster. My view is as follows. A tenancy fixed term will end at midnight on the last day of the term. The periodic tenancy will therefore start immediately after this ends, on the following day (Housing Act 1988 s5(3)(a)).

    The ‘period’ of the tenancy will relate to the way that rent is paid. S5(3)(d). So if the rent is paid monthly (as is normal) the period will be monthly.

    If there is any question about this, the court will look at the last payment of rent, as happened in the 2006 case of Church Commissioners For England v Meya.

    If the landlord and tenant have agreed that the rent will be paid on a different day, as in your example, then this can’t change the date the period runs from. Otherwise what would happen in the period 1 – 4th of the month immediately after the tenancy ended? There would be no tenancy at all which would be a nonsense.

    The main significance of this situation is with a section 21 notice, and therefore if this situation ever arises, it is essential that a notice with a saving clause is used, just in case the Judge takes the view of your forum members.




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About the post author:

Tessa Shepperson

Tessa is a lawyer specialising in residential landlord and tenant law. She runs the Landlord Law website (now in its 12th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google



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