End of an AST:
Questions: What happens when an Assured Shorthold Tenancy (AST) comes to an end? Will the tenant have to leave or does she need to sign a new agreement? What if a tenant wants to leave early? How long can a periodic tenancy last?
When the fixed term (minimum of 6 months) of an assured shorthold tenancy ends there are several options for both landlord and tenant:
(1) If the landlord has served a valid Section 21(1)b or for tenancies commencing after 1st October 2015, the new notice 6A, (notice requiring possession) giving at lease 2 months’, then the tenant will have to leave immediately after the 2 months’ notice ends, if the landlord still requires it. (Note: landlords sometimes serve notice as a matter of course earlier in the tenancy (after the first 4 months) and will not necessarily require the tenant to leave at the end) If the notice was served less than 2 months to the end of the fixed term the tenant will not be required to leave until after the 2 months’ notice period is up.
(2) If the landlord offers the tenant a new tenancy term by asking the tenant to sign another agreement, then obviously the tenant can stay until the end of that new tenancy term.
(3) If the landlord (whether he served a Section 21 notice or not) does nothing to indicate that he wants the tenant out, then the tenancy will automatically (without the need for either party to do anything) become a Periodic Tenancy.
A periodic tenancy is for a period equal to the rent payment periods, e.g, if rent is paid monthly then the tenancy becomes a monthly periodic tenancy. In other words the tenancy enters into a series of one-month tenancies which will continue on indefinitely until one or other party decides to terminate.
If the landlord wants a periodic tenant to leave he or she must now serve a different Section 21 Notice – a Section 21(4)a, (or for tenancies commencing after 1st of October 2015 the new 6A s21 notice). Here the notice must be for a minimum of 2 months ending on the last day of a rent period, (though the 6A notice is simply 2 months) which in practice is usually more than 2 months. Note the notice should identify a specific date (the last day of a period) AFTER which the tenant must leave.
If the tenant decides to leave during a periodic tenancy (the tenant cannot leave during the fixed term) she must give the landlord one month’s notice in writing (where rent is paid monthly) or 4 weeks’ notice in writing (where rent is paid weekly), ending on the last day of a tenancy term. In other words notice must be for a full tenancy term, so in practice the tenant may need to give more than a month’s notice.
Sometimes, a tenant will wish to leave early during the fixed term – end their contract early. It is then a matter of, will the landlord be willing to release them early from their contract?
A contract is a contract, so both landlord and tenant are tied in for the fixed period of the tenancy. If the tenant wished to leave early, or if the landlord wanted to end the term early, the same applies to both – it is to be done by mutual agreement only.
In the case of a tenant leaving early, and surrendering his or her tenancy, one option is to agree an amount of compensation equivalent to the landlord’s losses. The landlord has the discretion to simply release the tenant from the contract, or agree compensation, which the landlord would be entitled to get.
For example, a one-off payment, paying the rent until the landlord can re-let, or the landlord’s re-letting costs, or both. It is important in this situation that the landlord gets a formal letter of surrender of the tenancy from the tenant.