Here is a question to the blog clinic from Jane (not her real name) who is a tenant
We are tenants on a periodic tenancy, however when our fixed period ended we were asked by the agent to sign a periodic tenancy agreement showing a notice period of 2 months. We wanted the flexibility of a periodic tenancy and we signed the agreement.
However we now understand that a periodic tenancy is 1 month by law (when the rent period is 1 month) but we are not sure if the agreement we signed would overrule the statutory rule?
We actually handed in our notice one day ‘after’ our rent period and now unfortunately find ourselves serving a 3 month notice on a periodic tenancy. Because the landlord of our new home demanded we take the tenancy on immediately (or lose the property) we now have the financial burden for both properties!
Under section 5 of the Housing Act 1988, if tenants just stay on in a property, a periodic tenancy is created automatically. This will normally run from month to month (if the tenants pay rent monthly) and there will be a notice period of not less than one month which should end at the end of the tenancy ‘period’.
You can read more about periodic tenancies here.
Where a periodic tenancy arises because of the provisions in the Housing act, it is known as a statutory periodic tenancy. However what you have here is a contractual periodic tenancy.
It is perfectly possible for a landlord and a tenant to agree that the tenancy will run on, as a periodic tenancy, and to set terms and conditions for this. These can vary the way periodic tenancies are set up under section 5, for example by changing the terms of the tenancy.
The question then follows – are those terms and conditions valid?
All terms and conditions in tenancy agreements are subject to the Unfair Terms in Consumer Contracts Regulations. One of the things the regulations say is that a term will be unfair if it takes away a right a tenant might otherwise have had.
Will this apply to a clause in a monthly periodic tenancy requiring a tenant to give two months notice, as opposed to the one months notice ? You know, I am in two minds about this.
One argument is that normally a periodic tenancy only requires a one month notice period so it is unfair to impose two months. So the clause is invalid and the tenant does not have to pay.
The other argument is that the landlord can say he would never have allowed the tenant to stay on under a statutory periodic tenancy – the only reason he agreed to this was if the tenant agreed to give two months notice rather than one. In which case the notice period may be considered more reasonable.
Bearing in mind that it is the notice period that a landlord will have to give the tenant under section 21 and so will put both parties in an equal position.
What to you think?
I am inclined to agree that a 2 month notice period would be binding.
The s21 parallel you draw is a good one.
I also feel the UTCCR guidance does not apply because the 1 month notice is not an automatic right – subsection 4 states “The periodic tenancy . . . shall not arise if . . . the tenant is entitled, by virtue of the grant of another tenancy, to possession”.
I agree. I don’t think it would be an unfair contract term, as it was a quid pro quo for the flexibility of a periodic tenancy, and could have been objected to at the time. But notice periods can always be negotiated away – what if the tenant finds a new tenant to replace her?
UFCCR does not apply if the term has been clearly explained. It was clearly explained to them that 2 months notice would be required.
However, it is a periodic tenancy, which by law has a 1 month notice period from tenants. So should be invalid.
It is one of those unfortunate cases where it would be for a court to decide what is right, unless there is already a precedent which I am unable to find.
The issues here all flow from the first paragraph surely?
If the tenants originally had a ‘normal’ run of the mill say 6 month AST then automatically at one second after expiry of the original fixed term a Statutory Periodic tenancy would follow. By the time anyone asked the tenants to sign anything, the Statutory Periodic AST surely would be in existence?
So how then could they be asked to sign up to a Contractual periodic tenancy when the Statutory was already running?
I have also seen agreements when the talent must give two months’ notice, but the notice cannot end before the first 6 months, with the landlord being able to use a S21 ending after the first 6 months.
Are these enforceable?
Do these stop the tenant leaving at the end of the 6 months without giving notice?
I have claimed these exact terms in the small claims court against the tenant and won twice on the following basis; the extra month was brought to the tenants notice before signing.