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Does a tenant HAVE to sign a new fixed term tenancy?

Section 21 noticeHere is a question to the blog clinic from Mary who is a tenant

I signed an AST agreement in Dec 2012. Term ends 14 July.2013. The managing agent wrote to me this week, requesting that I sign new 6 month agreement at a cost of £55 plus VAT.

Should I wish to leave before the new term ends, they will endeavour to advertise for new tenant, at a cost to me of a further £195 plus VAT.

I am retired with no current employer reference and paid first 6 months rent in advance.

I am reluctant to sign a new agreement as my future circumstances are uncertain. The response from the agent is that the landlord is not willing to accept a periodic tenancy!

Although I fully appreciate the landlord’s wish for security, I am most reluctant to sign anything. Two landlord friends concur.

Advice much appreciated

Your landlords agents cannot force you to sign a new tenancy agreement if you do not want to.

If you stay on after the end of the fixed term a periodic tenancy will arise automatically under the provisions of the Housing Act 1988 (whether your landlord likes it or not).  You will then be legally entitled to stay under this periodic tenancy unless and until your landlord gets a court order for possession.

Your landlord will be entitled to get an order for possession under section 21 if a properly drafted section 21 notice has been served upon you (which must give you not less than two months notice) but probably not otherwise (assuming you are not in arrears of rent).  It will take him a minimum of six weeks after the expiry of the notice to get the court order – probably longer.

So you are entitled to stay on without signing for a new term, but are not guaranteed long term security.

If you decide to leave, they can NOT force you to pay for advertising for a new tenant!

You should refuse to pay any such charge and, if they persist, report them to any organisation they are registered with (such as the Property Ombudsman, ARLA etc), or if they are not registered with anyone, report them to Trading Standards.

You may also want to contact Shelter as they have an ‘end letting agent fees’ campaign, and tell them your  story.

Buffer

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




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15 Responses to Does a tenant HAVE to sign a new fixed term tenancy?

  1. And once it goes periodic if the agent has not re-served Prescribed Information on you (assuming they did in the first place) then you can threaten to bring a section 214 action for a deposit offence!!

  2. The £195 fee is payable if the tenant chooses to leave during the new fixed term contract, not at the end of her existing one. This is a re-letting fee and seems perfectly reasonable.

    The tenant has discussed the situation with the agent who is doing the right thing by clearly making the tenant aware of her obligation to pay a re-letting fee if she choses to sign a new fixed term contract but has to leave part way through.

    The landlord is entitled to ask for the security of a new fixed term but no one is forcing the tenant to sign it. This is all part of the negotiating process to establish the intentions of each party at the end of the fixed term.
    If she sticks to her position I expect the landlord would be prepared to let her stay on a Statutory Periodic Tenancy – it’s cheaper than finding another tenant.

  3. Tessa

    No “if” about it now with Superstrike correctly deciding a periodic tenancy is a new tenancy.

    I’d tell her to let it go periodic and if they haven’t re-served PI within 30 days then counter claim for the £195 – and then some!!

    Jamie T

    Renewal fees are even more pernicious. A re-let fee to an existing ex-tenant if the Landlord has incurred fees earlier than he should have seems reasonable to me long as the fee is reasonable and, abobe all, flagged up and signed for by the tenant in T+&Cs before the tenancy starts

  4. @Industry Observer Oh yes, the start of a statutory periodic tenancy has always been a ‘new’ tenancy.

    But I prefer not to be dogmatic about whether the prescribed information has to be re-served, until things have become more clarified.

    Safest to re-serve it though of course.

  5. Tessa

    I don’t mean to be dogmatic, but I do have firm views on these issues and have had for about 4 years or more. Just consider this:-

    Superstrike has clarified once and for all a periodic is a NEW tenancy

    The 2004 Act states eually clearly that any new tenancy means a new deposit and that deposit must be protected (and by logical inference re-protected)

    Protecting a deposit as per 2004 and 2011 LA Acts has ALWAYS meant doing two things – protecting the money and issuing PI (or by inference fresh PI).

    So until a case comes along which somehow separates out PI and says it does not need to be re-served then now (if not before), post Superstrike, it needs to be re-served.

    I’m sorry but it all seems so simple to me, as does why actually serving a piece of paper that can save you such aggravation is so difficult.

    Having been proved right on the new tenancy point I am 100% certain that if and when the PI issue on a periodic where the tenancy started post 2007 Act gets tested unfortunately I and those with similar opinions will be right on the second point – that PI needs to be re-served.

    It would just be totally illogical to have a decision that flew in the face of Superstrike where the unanimous decision is so clear on the legal issues.

  6. “counter claim for the £195 – and then some!!”

    Re-read the tenant’s post. Unless I’m going mad, she hasn’t paid this money yet. It’s what she would have to pay in the future if she signs a new fixed term but leaves early.

    As to your other comments about PI etc. I agree with you as far as the law is concerned. The problem is, in this example the law is a complete ass.

    Superstrike and the other recent case of possession being overturned (due to agent’s name being on the prescribed info), are both about tenants using a technicality to get out of a Section 21 notice. They are nothing whatsoever to do with the tenant being prejudiced or otherwise disadvantaged because their deposit was not protected.

    Re-serving PI may be simple to you Tessa but it’s a pain for agents who have thousands of tenants and landlords using different schemes. More to the point, there is no valid reason to do so other than to comply with poorly designed legislation.

  7. Yes, its all got a bit silly. Lets hope that the case will be appealed to the Supreme Court and that they will add a bit of common sense to the mix.

    In my post on Superstrike here http://www.landlordlawblog.co.uk/2013/06/20/tenancy-deposit-protection-in-the-light-superstrike-v-rodrigues/ I mentioned David’s suggestion that there may be a defence to PI service claims if it had already been served and there was no change in the information. (Maybe it could be deemed to have been automatically re-served in the same way as the deposit was automatically repaid???)

    It will be interesting to see what the deposit schemes say in due course when they have finished their consultation with the DCLG.

  8. Recent PI name case is a non issue as s212 allows for another name to be used as long as used throughout tenancy (otherwise presumably PI must be re-issued to reflect any change)and the SI would be covered by this as it then enacts the TDP provisions.

    So no need for CoA or Supreme Court (it would never get there anyway) as it is still a local case and at best a Circuit Judge but withr way whoever allowd the appeal is wrong on a point of law. So on appeal to Order will be reinstated but the decision is not binding anyway.

    @Jamie

    Yes I realise the money if payable is payable later just expressed myself badly. The tenant should allow it to go periodic though, they’d never re-serve PI and then sue for a s214 offence.

  9. Tessa

    Sorry my reference to Supreme Court above was meant to be in relation to Superstrike. Johnson never go there and given the clear unanimous decision it is hard to see the Supreme Court troubling itself with this issue.

    On the point of original PI being good enough on a periodic two points.

    First the original PI in many cases will be defective anyway, so I’d suggest taking the opportunity to correct.

    Second why should the information be the same. ASnything could have changed, even the tenants mobile phone number. Yes it was correct originally – but surely the whole point of serving PI is to serve a correct PI at the date of service. Otherwise it really is a complete nonsense and you might as well insert Mickey Mouse as Landlord name.

    Remember this is prescribed information, so needs to be a correct answer.

  10. Is it advisable for a tenant wanting to stay on for a few months NOT to sign a new Tenancy Agreement after the fixed term AST has expired, say, because the landlord wants them to commit for a longer period than they want to?

  11. Yes. If the tenant does not want to commit to a longer fixed term they should not sign an agreement committing them to this.

    All the landlord can do is evict them anyway, and if the tenant is not staying long anyway possession proceedings will be a pointless exercise.




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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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Tessa is an English lawyer specialising in residential landlord and tenant law.


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