Where to start with: Renewing a tenancy
We are excited to launch a brand new ‘where to start with’ series, which will take a look at some of the key topics and issues landlords are facing, and where to start with addressing them. In the first blog in this series, we take a look at where to start with renewing a tenancy.
NRLA members can access guidance on renewing tenancies over on our website, as well as free downloadable tenancy agreements and free expert advice via our landlord advice line. Sound good? Join us today!
First things first, what you need to know is that when an existing assured shorthold tenancy agreement (AST) comes to the end of the fixed term, the tenancy will still continue as either a statutory periodic or contractual periodic tenancy.
So, ahead of the end of the fixed term coming to an end, if you’re not sure which of the above applies, its recommended that you read your tenancy agreement to see if there is a clause in there which explains whether the periodic tenancy exists after the fixed term.
This means that tenant will have the right to continue living in the property until either you or they end the agreement.
It also means that you don’t have to give them a new tenancy agreement when the fixed term ends, saving you a lot of paperwork! However, it also means that the tenants can leave with little notice, leaving you with an empty property in months like February where demand is generally low.
What’s the difference, and why does it matter?
It is important to distinguish if a periodic clause exists or not, because this determines whether you need to do anything when the fixed term comes to an end.
By that, we mean re-serve documents and so on.
Contractual vs statutory period tenancies
Contractual period tenancies are where, at the end of the fixed term, a tenancy runs from month to month, week to week, etc, agreed as part of the same tenancy agreement.
This means that a clause will be present in the tenancy agreement saying that periodic tenancy will follow on from the fixed term. This is important because it means it is still part of the same tenancy agreement so a lot of the time you don’t need to serve the paperwork again.
If you tenancy doesn’t mention anything about the tenancy continuing, then a statutory periodic tenancy is one which is created by law, even if there is nothing mentioned in the tenancy agreement. This is a separate tenancy created after the fixed term ends so you often need to serve extra paperwork if this is the case.
To help you identify which is which, look out for phrases like 'continue on as a periodic tenancy' or 'carry on from month to month after the end of the fixed term'. This will mean it is a contractual periodic tenancy, which is very important for council tax purposes.
If you are using the current NRLA AST agreement, then it is a contractual periodic tenancy.
Renewing the tenancy and when to re-serve documents
If you would rather not leave the agreement rolling on periodically, you can offer the tenants a new fixed term tenancy.
If they accept and sign a renewal or move on to a statutory periodic tenancy then, depending on your chosen Government backed deposits scheme, the deposit may also need re-protecting. This is often the case for insured protection but it’s recommended to check with your chosen scheme.
If you do renew, or your tenancy turns into a statutory periodic tenancy you may also need to give your tenants a new copy of ‘How to rent: a checklist for renting in England’ when this new tenancy begins. If the how to rent booklet has been updated since your last tenancy you must give them a copy of the new version. More on the versions of the How to Rent guide can read in our archive.
Depending on how old the inventory and check in report from the first tenancy is, it may also be a good idea to do a new inventory. Some deposit schemes recommend a new inventory is done for every single new tenancy or change of tenants, but adjudicators will accept annotated or updated ones instead.
Is it necessary to renew a tenancy if only one tenant leaves?
Sometimes you may find that one tenant wants to leave while others want to stay. Usually it is best here to get the remaining tenants and the replacement to sign up to a new tenancy agreement but if you want you can also have the tenants sign aa deed of assignment instead. This allows you to swap one of the tenants without renewing the tenancy again.
You should speak to your deposit company if you do want to do this though as they may still charge you to renew or they may be able to update the details of the scheme.
- More on this can be read in our guide on statutory vs contractual periodic tenancies for landlords.
- NRLA members can access one to one advice on tenancy related matters including renewing a tenancy, six days week and a suite of useful documents and guides including tenancy agreements. Join us today.
- Learn more about creating and renewing a tenancy in our Landlords Fundamentals course. Available as both an eLearning and an eClassroom course, read more and book your place here.