The option to extend or terminate a tenancy agreement usually comes up at the end of a fixed-term (usually 6 or 12 months) or when everyone involved agrees. Until that point, tenants are responsible for paying the rent even if they pack their bags and move out.
What kind of tenancy agreement do you have?
In London, most rental properties will have Assured Shorthold Tenancies (ASTs). There are two types:
- Periodic Tenancies, which run week by week or month by month.
- Fixed-term Tenancies, which are usually 6-12 month contracts with an optional break clause in the middle.
Life is full of surprises, so a break clause gives both sides the option to end or review the tenancy agreement before the end of the contract.
For situations where the tenant is living with a lodger, the tenancy agreement might be an Excluded Tenancy or a Licence. The option to end or extend in this instance usually comes down to giving ‘reasonable notice’, which is often one rental period in advance.
Ending a tenancy agreement
When it comes to parting ways, there’s a right way and a wrong way of doing things in the eyes of the law.
Tenants have three opportunities to end a tenancy agreement:
- At the end of a break clause.
- At the end of the fixed-term.
- If your landlord (and other tenants) agree to end the tenancy early.
Remember, you’ll still need to give whatever notice is required in the tenancy agreement (usually one or two months). If you move out before the tenancy agreement is finished, you’ll still need to pay rent until the end of the contract period.
You don’t have to give a reason to end the tenancy, but you do have to have to follow these requirements:
- Keep your tenants’ deposit in a Deposit Protection Scheme (DPS).
- Give written notice that you want them to leave (usually two months) and the date you want to end the agreement.
Also, you can’t ask them to leave before the end of the fixed term or within the first six months of the original tenancy.
With one exception…
As a landlord, you can ask tenants to leave under the Housing Act 1988. But this only applies if they are behind with the rent or are using the property for illegal activities. If the tenant refuses to leave, you can then begin the process of eviction.
Extending a tenancy agreement
It’s usually a good idea for both the landlord and the tenant to have a conversation (often through the lettings agent) to decide on the next steps.
If everything is going smoothly when a fixed term comes to an end, there are two options to continue with the tenancy agreement:
- Renew the fixed-term contract.
- Move to a rolling tenancy.
If you’re renewing, then it’s a case of agreeing on the length of the next term along with any break clauses and signing the paperwork again.
If you decide to continue on a rolling tenancy, it can be ended at any time – usually with two months notice. The upside is that this might give flexibility (for instance if the tenant is planning on moving out, or if the landlord might need the property back) but the downside is a lack of long-term certainty on both sides.
If you’re wondering how to end or extend a tenancy agreement, we recommend flicking through the tenancy agreement itself. This will usually tell you details of the arrangement, how much notice is required, whether there’s a break clause, and what to do if you decide to leave or stay put. At Keatons, we manage rental properties across East London and other areas of the city. We often act as a link between the landlord and the tenant, which often makes communication easier and more efficient when it comes to discussing next steps. It’s usually best to ask your lettings agent if you have a question about your tenancy agreement. In most cases, we can answer the question there and then.
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