1 Termination of a fixed term tenancy
If the tenant has a fixed term tenancy but wants to terminate this before the end of the term, they can only do so legally:
• With your agreement.
• I f this is allowed for by a break clause in the tenancy agreement and the tenant has followed any requirements for giving notice specified in the tenancy agreement.
If the agreement does not allow the tenant to terminate early and you do not agree that he or she can break the agreement, the tenant will be contractually obliged to pay you the rent for the entire length of the fixed term. If the property is handed back, you have a duty to try and mitigate the tenant’s loss (future rent) by re-letting the property. Reasonable re-letting costs can be charged for this. Once a new tenant is found, there should be no ‘double charging’ for the same period.
In practice tenants who do not meet these obligations may abandon the premises.
2 End of a fixed-term assured shorthold tenancy
When an assured short-hold tenancy comes to the end of the fixed term, any replacement tenancy agreed by you will automatically be on assured short-hold terms unless you set up a replacement tenancy as an assured tenancy.
There is no statutory requirement for a tenant to serve notice to end a fixed term tenancy, and the tenant is perfectly entitled to leave without giving you any notice.
Any clause in the tenancy agreement requiring the tenant to give formal notice to leave at the end of the fixed term (and making the tenant liable for rent in lieu of notice if they fail to do this) will be void. However a clause asking the tenant to let you know whether or not they will be leaving so you can make arrangements for the property to be checked and the damage deposit returned to them should be valid.
If you do nothing and the tenant stays on in the property, the tenancy will automatically run on from one rent period to the next on the same terms as the preceding fixed term assured short-hold tenancy. This is called a statutory periodic tenancy. The tenancy will continue to run on this basis until you replace it, the tenant leaves or you seek possession from the tenant though the courts.
Some landlords think that if tenants stay on after the end of the fixed term they are unauthorised ‘squatters’. This is not the case. They are still tenants and are legally entitled to be there.
When the fixed term of an assured short-hold tenancy ends you can:
i. agree a replacement fixed term short-hold tenancy
ii. agree a replacement assured short-hold tenancy on a periodic basis called a contractual periodic tenancy
iii. do nothing and allow the assured short-hold tenancy to run on with the same rent and terms, under a statutory periodic tenancy.
iv. start proceedings for possession under the section 21 procedure if you require vacant possession and the tenant has not left, provided you have already served a properly drafted section 21 notice and the correct notice period has been given and has expired.
If you need to regain possession of the property at short notice, make sure you have served a section 21 notice well in advance and follow option (iv).
If option (i) is chosen you will only be able to regain possession during the fixed term on one of grounds for possession in the Housing Act 1988 (as amended), grounds 2, 8, 10 to 15 or 17.
Once the fixed term has ended, again you will be able to regain possession, provided you have given the tenant two months notice.
Note that the giving of a new tenancy agreement to the tenant will cancel any notices for possession already served on the tenant and you will have to serve fresh ones.