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Ending a Fixed Term Tenancy Early?

Regardless of whether the tenant or landlord wishes to end a fixed term tenancy early, it is essential that both parties follow the proper conduct. Whilst there are a few ways in which a landlord is able to end a tenancy, whether this is through a notice to quit, or the eviction process, on face value it could be argued that tenants have been left behind. However, this is not the case and providing the correct terms are followed a tenant can be equally empowered to end a tenancy agreement early.

What Is a Fixed Term Tenancy?

Whilst most renters within the UK will find themselves to be on an assured shorthold tenancy, irrespective of the type of tenancy if the agreement holds a fixed term there are certain obligations both parties of the agreement must adhere to. As the name suggests a fixed term tenancy will establish a period of time in which the specific terms of the tenancy agreement must remain unchanged. Whilst initial apprehension could be set in for being “locked into” a contract, in regards to tenancies the move acts as a protective measure for both tenants and their landlords. Once the fixed term is in place the tenant undertakes a series of legal duties, most commonly paying the agreed upon rental payments, acting in a tenant like manner”, alongside remaining in the property for the full duration of the rental period. As mentioned these regulation do not exclusively serve to benefit the landlord of the rental property, with the owner only being free to evict the landlord without strict justification until the established fixed term comes to a close. To the applause of many tenants the fixed term also prevents the landlord from increasing the amount of rent the occupants of the rental property are expected to pay. With this being said an exception can be made in the case of landlords that include a rent review clause in the tenancy agreement, however in such cases the tenant can expect to receive sufficient notice of the landlord’s intent.

Once the fixed term comes to a close the tenant and the landlord are free to curate another tenancy agreement. When doing so there is no established limit on how long a fixed term can be, however most rental property owners will typically set the fixed term at anywhere from six months to a year.

Periodic Tenancy

If at the end of the fixed term neither the landlord nor the tenant wished to proceed in signing a new tenancy agreement, yet the tenant wishes to remain the rental property, a periodic tenancy will be in place. Neither party in the agreement needs to take any measures or curate any documentation for this to take place as once the fixed term comes to a close it is automatically considered a periodic tenancy, in the absence of a new agreement. Also referred to by many as a rolling or statutory tenancy, it is important for both parties to note that the terms of the original tenancy agreement will largely remain in place. With this being said, in the absence of a fixed term there are far less protector measures in place for the tenant, as the landlord will be able to review the amount of rent being paid by the occupants, alongside taking possession of the property in a far shorter timeframe.

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Notice to Quit

In some circumstance the landlord of a rental property is able to issue the tenants with a notice to quit. This is most commonly found with tenants that are considered to be an occupier with basic protection. This would comprise full time students if their main residence is halls or accommodation owned by the university, tenants that share the same home, but not accommodation, as their landlord and in some instances the guardian of the property.

However, a notice to quit can also be implemented by the landlord if the tenant is in a rolling tenancy. If the landlord wishes to serve the occupants of a rental property with a notice to quit whilst they are in a rolling tenancy a minimum of 4 weeks‘ notice must be provided, with the tenancy ending on the last day of the rental period, alongside where the tenants can turn for support.

Break Clauses

Most commonly found in fixed term assured shorthold tenancy agreements, if a break clause is implemented in the terms; both the landlord and the tenant have the right to end the tenancy prior to the rental period coming to a close.  Providing the agreement contains a break clause, notice can be served by either party to end the tenancy; however, this must be done in accordance with the minimum amount of notice that should be provided.  This minimum notice period should be explicitly defined in the terms, with their being no legal minimum period that the landlord or tenant must give to enact the break clause. However, regardless of the notice period, the party that implements the break clause must stipulate their intentions of doing so in writing, providing this documentation to the appropriate party.

It is essential for landlords to understand that if they are seeking to take possession of the rental property, implementing a bleak clause may not get the desired result as this will simply end the agreed upon fixed term. In such instances the tenant would remain in the property with a periodic or rolling tenancy being in place. With this being said, if a landlord wished to regain possession of their rental property from the tenant then they would be able to implement a section 21 order. With this being said if it is the tenant that wishes to implement a break clause in the tenancy agreement, then they are only required to provide the notice period outlined in the appropriate terms, with the tenancy agreement coming to an end once this notice period has expired.

When curating a break clause for the tenancy agreement, rental property owners must also consider if the terms they are outlining are fair to all concerned parties. If it is found that the break clause does not comply with the regulations of consumer protection law it will not be upheld. Typically a break clause will come with a series of conditions that must be adhered to if the break clause is to be enacted. If either party deviates from these conditions the clause may not be upheld; however, the same can be said if the terms on which the break clause can be enacted are far too strict.

Typically these conditions will come in the form of the tenant needing to have paid any due amounts of rent before the clause can be enacted, however if rent is paid in advance the terms should specify how this amount will be returned.

It is worth noting that whilst there is no standard on the minimum amount of notice a landlord or tenant would have to provide when using a break clause, when this clause can be enacted is far more uniform, with the break clause typically only being applicable after the first 6 or so months of the rental period.

Giving Notice to Your Landlord

When choosing to provide your landlord with notice that you wish to end the fixed term of the tenancy it goes without saying that it is best done in written form. The contact details for the landlord should be detailed on the original tenancy agreement and provided at the outset of the rental period, failing this they could be provided by the letting agent, if appropriate. The notice should clearly define the intention of the tenant and the exact date on which you will be vacating the property.

Mutual Agreement

In the instance that the tenancy agreement does not contain a break clause, the tenant is still able to end the rental period early, providing they can reach an agreement to do so with the landlord. It goes without saying that under such circumstance the owner of the rental property is under no obligation to end the fixed period as doing so could potential result in them losing a significant portion of their rental income, instead taking on the associated expenditure of marketing a property and finding a new tenant.

Once this documentation has been provided ensure that your landlord provides you with written confirmation that they have received the notice and on which date.It is worth noting that is, in essence, a compromise and if the landlord decides to bring the rental period to a close earlier than expected, the tenant may be required to cover “reasonable costs” such as cleaning the property, referencing, rent until the end of the fixed period and the costs of finding a new tenant to occupy the property.

If despite their best efforts the tenant is unable to come to an agreement with the landlord over ending the fixed period early they may be tempted to vacate the rental property without providing the landlord with any notice of their intent to do so.  As this action would not be considered as a viable way to close a tenancy, the tenant would remain liable for the expected rental payments, household bills and council tax fees. This will also usually result in the landlord pursuing the tenant for the missing rental payment, taking a court order against the past occupant to settle the arrears. Of course, if the tenant was to simply leave the rental without warning, this would make it far harder for them to obtain a reference for their next rental property, not to mention they would be unlikely to receive their tenancy deposit.

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Somewhat synonymous with the dynamic between renters and their landlords is the ability for a landlord to seek possession of their property and removal of a problem tenant through the eviction process. Naturally, if a landlord wished for the tenant to be evicted they can employ this process; but is it really that simple.

A landlord is able to serve a section 21 notice of eviction in order to seek possession of the rental property. However, this will not be effective in removing a tenant quickly, or ending a tenancy agreement early as it merely states the landlord wishes to regain control of the accommodation at the end of the fixed term.

With this being said, if a landlord was to issue a tenant with a section 8 notice of eviction they may regain control of their property much faster. Typically they will have to provide the occupants of the rental with a few months’ notice prior to the eviction proceedings begin. As it stands tenants are currently enjoying increased protection form eviction at the time of writing due to the COVID outbreak; because of this landlord must provide their tenants with at least 6 months’ notice when service a section 8 notice. Unlike a section 21 notice, when serving a section 8 notice the landlord is required to stipulate the specific “grounds” onto which the tenancy agreement have been broken and how the tenant has neglected to uphold their obligations established in the tenancy agreement.

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