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What Happens When A Tenancy Agreement Expires in the UK?

24 Dec 2020

A lot of things can happen when a tenancy agreement comes to an end in the UK. Here are some circumstances that wise tenants should know to protect their rights

Although the end of a tenancy is stated in the fixed-term agreement, it may not be what both the renter and landlord want. In fact, both sides have the right to extend the tenancy or terminate it immediately upon agreement. So, what happens when a tenancy agreement expires in the UK actually?

  1. What Happens When A Tenancy Agreement Expires In the UK?
  2. Can Tenants Terminate A Lease Early?
  3. Closing Thought

1. What Happens When A Tenancy Agreement Expires In the UK?

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If the Tenants Have Moved Out

Once the rental contract is no longer valid, you - as a tenant - are not obligated to find a replacement tenant or pay any moving charge. And most importantly, the landlord has no right to force you to stay longer against your will.

Even though there is not a concrete rule expressing that a tenant must inform the landlord about their departure once the tenancy contract expires, it is out of good manners to do so. A brief notice via email or phone call certainly suffices.

One benefit of staying in contact with your landlord is the regular update on your tenancy deposit status without any awkwardness; you can expect a refund 10 days after you move out of the rental property1. If the landlord fails to do so, do not hesitate to write them a follow-up email or give them a phone call.

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In the case that you want to move out before the fixed date on the contract, you should consider how early and how much notice to be given. The notice of lease termination is usually included in the contract and agreed beforehand to protect the rights of both renters and landlords.

By providing an advanced notice, you will do your landlord a great favor as they can promptly find replacements, reduce void periods and avoid an income loss.

Provided that you do not give proper notice, you are still obliged to pay the rental fee and other bills, such as utility bills and council tax until the end of the term, even when you have already moved out2.

Also, you cannot take the holding deposit back. You might as well have to pay a fine due to contract violation should there be any wrongdoing.

If the Tenants Remain in Occupancy

Suppose you wish to renew or lengthen the current rental contract. It is necessary to negotiate with your landlord and come to a mutual agreement on the new contract’s type, namely fixed-term or periodic.

Sign a renewal agreement for a new fixed-term

A renewal agreement is usually a fixed-term contract that extends the existing tenancy. The rental period can be extended upon agreement for another six- or twelve-month period of time or even any timespan as you wish.

If you want to remain in the property and sign a renewal agreement, we highly recommend writing a formal notice to your landlord in advance, even though it is not mandatory (more information about the further stay without a renewal contract will be found under the section of Statutory Periodic Tenancy).

A female real estate and an old couple going through a renewal contract together at a wooden table in a white office with a wooden bookshelf.

Both sides will benefit from this simple action as your landlord won’t be troubled with finding new prospect tenants, thus the property remains vacant for your extending stay.

The following tenant’s rights when a lease agreement expires in the UK is expected to provide a smooth transition and avoid any unnecessary dispute between you and your landlord. You are authorized to:

  • Negotiate the new rental terms, rental payments, payday, etc.
  • Voice your dissatisfaction with the properties or any matter of and request your landlord to repair, fix or change.
  • Enjoy stable financial security during the rental term. The rent payments method and payday are in the regulations of the contract, as a result, you can make a stable financial plan when signing the renewal contract.

On the flip side, the landlord may charge higher rent, renewal fees and other costs upon the new contract. However, don’t forget the Tenant Fees Act that bans any renewal fee from 1 June 2019.

The UK government introduced this ban to protect tenants and give you a more stable living condition. From the landlord’s side, they may face legal actions if they violate the Tenant Fee Acts.

Let it become a rolling or periodic tenancy

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A rolling or periodic tenancy is an agreement between the landlords or letting agent and the tenants without a specific end date. There are 2 types of this tenancy, including Statutory Periodic Tenancy and Contractual Periodic Tenancy.

Statutory Periodic Tenancy

This type of tenancy occurs if the tenants have neither left the property nor signed any renewal agreement or other papers related to the tenancy after the expiry of the fixed term tenancy agreement.

It is usually a month-to-month or week-to-week tenancy, depending on how the last payment went. If you made one payment for the last 3 months of the preceding agreement, you will acquire a 3-month periodic tenancy3.

In this case, all terms of the former agreement are valid, apart from the clauses about the rental period.

It is undoubtedly comfortable to remain in your familiar home under a statutory periodic contract, but also risky, as the landlords have the right to cancel the agreement anytime with one-month notice. That said, you are entitled to the same right.

Contractual Periodic Tenancy

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When both parties formally agree to turn the expired fixed-term contract into a periodic one, it automatically becomes a contractual periodic tenancy. You can put it simpler as the continuation of the preceding agreement.

From the landlord’s point of view, a type of tenancy benefits them from not having to find replacement tenants, consequently avoiding expensive costs on letting agents.

You, as a tenant, can rest assured that the notice period of 1 month is applicable, flexible enough for you to switch property without having to pay double rents.

In comparison, the periodic tenancy is more versatile than the fixed-term one. It is so flexible that both parties can end the tenancy anytime they want, of course, given they follow the correct procedure.

And within the periodic tenancy, the main differences between a statutory and a contractual type are the signing stage and the rental period.

How to end the rolling or period agreement?

To end a rolling or period agreement, one party needs to submit a 1-month notice. The landlord is obliged to pay the security deposit back within 10 days after the renters leave.

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If a tenant refuses to leave after the lease expires

When the lease expires and the landlords want the tenants to leave due to different issues, such as renovation, change of commercial property ownership, hope of moving in themselves, tenant’s constant violation or lousy behaviours, to name a few.

In case the tenants insist on remaining in the property without permission, the landlord can file an eviction. It happens when they want to empty the property immediately after the term ends without taking any rent and fees. As long as they still accept the payment, they need to give a formal 2 to 6-month notice as usual.

2. Can Tenants Terminate A Lease Early?

The tenants can end a fixed-term tenancy early if you either4:

  • Use a break clause in your contract
  • Negotiate a surrender with your landlord

The tenants can end a fixed-term tenancy early if you either:

  • Use a break clause in your contract
  • Negotiate a surrender with your landlord

To terminate the lease agreement before it is due, you should follow 4 steps below:

  • You need to send a notice to your landlord 30 to 60 days before your planned departure date;
  • You must submit a formal written and signed notice. If you share the property with a partner or housemate(s) (also called joint tenants), the notice requires all of your signatures;
  • If there is no break clause, you need to pay a penalty for violating the contract, which is usually equivalent to 1- to 2-month rent (but always negotiable);
  • All outstanding rent arrears and utility bills must be paid before you vacate.

Afterward, the landlord will consider terminating the tenancy agreement. If you follow the guidelines above, you will receive an approval because the landlord cannot veto the break clause in the agreement.

Renters missing any point above or owing any payment can be disputed, which could lead to unexpected penalties.

3. Closing Thought

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No matter who you are, a tenant or a landlord, you should know what happens when a tenancy agreement expires in the UK. You can choose to end the agreement, sign a renewal one, or change it into a periodic or rolling contract. Also, remember to stay informed if you want to terminate the tenancy agreement before it is due.

Unlike the traditional private rented sector, Build To Rent developments offer an array of high-quality apartments, diverse in locations, sizes, prices and offer a wide range of amenities to satisfy any explicit need. Visit our website today to explore the future of renting in the UK.