Here is a question to the blog clinic from John who is a landlord.
I have a tenant who stayed on after his initial rental period.
Do I need to set up a Periodic Contract or are we both covered by the first short term agreement?
Answer
If your tenant stays on after the end of the fixed term, you do not need to give a new tenancy agreement unless you want to.
Assuming your tenant is an assured shorthold tenancy (which most tenancies will be in England & Wales), under s5 of the Housing Act 1988, immediately after the fixed term ends a new ‘periodic’ tenancy will be created automatically.
The ‘period’ will relate to the rent being paid – so if the rent is paid monthly it will be a monthly periodic tenancy, if the tenant pays weekly it will be a weekly periodic tenancy etc.
The tenancy will be on the same terms and conditions as the preceding fixed term tenancy, will be between the same parties and with the same rent.
So you only need to get the tenant to sign a new document if one of these is going to change – for example if one of the tenants is being replaced with another or if you want to increase the rent.
However, note that for the time being you will need to re-serve the prescribed information, as a result of the Superstrike case, until such time as the government amendments to the law, which I understand are under way, come into force.
Superstrike and the elephant in the room . . .
I am amazed that no one has commented on the obvious position of the Judiciary in regard to transition of
tenancies from fixed term to periodic:
(see para 38 of the judgement), landlords are OBLIGATED to account for the deposit, ie., they have to inspect the property and advance any claim for damages at the end of the fixed term. Any damages obtained at the end of the periodic term can only be advanced against the deposit held for the latter period. Landlords who are not diligent and erroneously presume that ‘occupancy’ equates with ‘tenancy’ will in
effect be consenting to a nil payment set-off agreement. Clause 31 of the Deregulation Bill will only make things worse than they already are.
It is therefore in the express interests of all landlords to re-protect the deposit. Crafty tenants are
already wise to this procedural oversight and the courts are bound to agree with them.