Ending a Tenancy:
Ending an Assured Shorthold Tenancy must be handled with care. For landlords and tenants its very important to follow the rules exactly as the law requires, otherwise costly delays are likely.
Most tenancies end amicably with the tenant giving the landlord notice to leave. However, in a minority of cases the landlord may have to resort to eviction, and that’s what this article is about. Recent legislation has resulted in a more involved process where it is imperative that landlords / agents have issued the correct documentation.
Assured Shorthold Tenancies (AST) have been in use since 15 January 1989. Those prior to 28 February 1997 were op-in agreements where a section 20 notice was required. This notice pre-informed the tenant that they were entering an AST, and without this notice (and proof of service) landlords cannot evict pre-Feb97 assured shorthold tenants using the s21 procedure.
Since 28 February 1997 the shorthold tenancy became the default tenancy in England and Wales. Scotland was similar but there are important differences, and this has now be superseded by the Private Housing (Tenancies) (Scotland) Act 2016 for new tenancies commencing from 1 December 2017. Since devolution in Wales and Scotland statutory laws are beginning to diverge from those in England, so always check local regulations before acting.
These guidelines are based on English law and are not a definitive interpretation of the law, every case is different and only a court can decide, so seek expert advice.
Fixed Term and Periodic Tenancies
ASTs can be either a fixed-term contract, for example 6, 12, 18 months etc, or a periodic tenancy from the start, that is, monthly, weekly or 3-monthly etc, depending on what the agreement says.
When the fixed term ends, if the tenant wishes to stay on, the tenancy can either:
1 – Lapse into a statutory periodic AST, which will be automatic if the parties do nothing, or
2 – Be renewed for a new term if the parties sign a new agreement on the same or revised terms.
Periodic tenancies can run indefinitely, or until either the tenant gives notice to quit or the landlord serves a notice seeking possession on the tenant.
Tenants should have a written agreement setting out the dates, rent amount and the obligations of both landlord and tenant. However, currently a legal tenancy can exist without a written agreement, providing it is for less than 3 years, still giving the tenant full Housing Act (1988, 1996, 2004) protection. The tenant is entitled to receive a written agreement by law if requested of the landlord (or their agent) within 28 days of the start of the tenancy.
An AST depends on tenants living in the property as their only and main residence; otherwise there is no Housing Act protection and the tenancy (which is then a common law tenancy) can be summarily ended with a notice to quit and a court application by the landlord. Also, landlords are not obliged to comply with the Tenancy Deposit Protection Rules where the tenancy is not an AST.
An AST can be for any duration, but there is a minimum length of 6 months during which time the tenant cannot be evicted under the shorthold ground – Section 21 of the 1988 Act.
However, if the tenant seriously breaches the terms of the tenancy contract they could be evicted on breach of contract grounds within the fixed-term and within the six months protected period – Section 8 Schedule 2 of the Housing Act 1988, as amended 1996, gives 17 separate grounds on which the landlord can evict a tenant.
A fixed term tenancy gives both landlord and tenants long-term security: the landlord knows that rent is due for a full term and the tenant has security of tenure for that length of time.
With a periodic tenancy the tenant can give notice (one full tenancy period for a monthly tenancy) at any time and leave quickly, but likewise the landlord can give notice (a minimum of 2 months for a monthly tenancy) at any time.
When agents are involved they often prefer to formally renew fixed term tenancies, which usually involves a fee from both tenant and landlord.
From a landlord’s point of view leaving the tenancy to lapse into a periodic tenancy is less disruptive to the arrangement and will encourage tenants to stay on as long as possible.
Asking a tenant to sign a new agreement can sometime trigger a move. From the tenant’s point of view, a new agreement may be at a higher rent, whereas periodic tenancies often run for long periods without a rent increase.
End of Tenancy
Most tenancies end naturally by the tenant giving the landlord notice to quit – over 90% of them do that. On average, AST tenancies last between 12 and 18 months, though quite a lot last for many years. Long-term landlords prefer their tenants to stay on as this means they don’t have the trouble and expense of finding new tenants and they don’t have vacant (void) periods without a rental income.
Tenant’s Notice – Fixed Term Tenancy
At the end of the fixed term the tenancy ends and under statutory rules there is no stipulation that the tenant must give notice. The tenant can leave without giving notice, providing they leave before or on the last day of the tenancy. However, if the contract stipulates a formal notice period then the tenants should comply with this.
In any case it is common courtesy for tenants to inform the landlord that they wish to leave, giving the landlord time to market the property early and thereby avoid a long vacant (void) period. There is also the matter of a formal check-out procedure and a landlord’s reference: if the tenant is likely to be applying for another tenancy, it is very likely the new landlord will approach the old one for a reference.
Break Clauses – Fixed Term
Some longer fixed term tenancies have a break clause in the agreement. This may be a tenant’s break or both a tenant’s and landlord’s break. A landlord’s only break clause would be deemed unfair and unenforceable. (See Office of Fair Trading – Guidance on Unfair Terms in Tenancy Agreements) For example, a 12 month tenancy with a 6 month break will allow whichever party wants to end the tenancy early to do so, so long as the minimum 6 month AST term is over.
Break clauses are written in different ways and some are unconditional, others are conditional on the tenant or landlord meeting specific requirements. For example, the rent is paid up-to-date and the notice is served within a specific time frame. Tenants and landlords should read the agreement very carefully to ensure they meet all the conditions if they want to successfully exercise a break clause.
Ending a Tenancy Early
Sometimes tenants wish to end the tenancy early and on rare occasions so does the landlord. This can only be achieved by negotiation and agreement between the parties. A landlord or tenant may be willing to accept early surrender, or agree to do so with compensation – a cash settlement. Neither the landlord nor the tenant is under any legal obligation to do this and both can insist on enforcing the contract to the end of the term.
Tenant’s Notice – Periodic Tenancy
If a tenant stays on after the fixed term (even for one day) the tenancy automatically becomes a Statutory Periodic AST, unless the tenancy agreement states that it will become a Contractual Periodic Tenancy (CPT). In practice there’s not a lot of difference.
This means that the tenancy periods are based on Calendar months and run from the day after the fixed term ends. These will be weekly or monthly periods depending on what the agreement says and the rent payment periods imply.
For example, if a 6 month tenancy agreement is signed on the 1st of July, the fixed term ends on the 31st of December. If the rent is paid monthly the periodic terms will start on the 1st of January, 1st of February, 1st of March, and so on until the periodic tenancy is ended.
To end a periodic tenancy, tenants must by law give one clear tenancy period’s notice in writing. This is usually one month (rent paid monthly) or a minimum of 28 days when the rent is paid weekly. This notice period MUST end on the last day of a tenancy period, in other words giving one clear and full tenancy period’s notice.
In practice where rent is paid monthly this would mean that tenants are obliged to give up to 2 months’ notice depending on where they are in their tenancy term when they decide to give their landlord notice. In the case above for example, if the tenant decided to give notice on the 5th of March, the notice expiry date would be the last day in April – 28th or 29th of April depending on whether it’s a leap year or not.
Not all landlords stick to the statutory requirements on tenant’s notices and most will accept one month’s notice at any time, though tenants should be prepared to meet the full notice period. Rent will be payable up to and including the last day of the tenancy term regardless of whether the tenant leaves early or not.
Where a tenant gives notice, the landlord will usually takes steps immediately to re-let the accommodation. If the tenant changes his or her mind and does not leave, this can put the landlord in a very difficult position if new tenants are waiting to go in.
Landlords should NEVER sign up new tenants to a letting agreement until they have vacant possession.
To discourage delay, the law allows a landlord to charge double rent to a tenant who has given notice (s18 Distress for Rent Act 1737) for the period during which the tenant is in occupation after the period ends – the legal term for this is “holding over”.
Once a tenant gives a landlord notice, either under a break clause or during a periodic tenancy, the notice is binding, even if it is defective, and cannot be withdrawn or rescinded, unless the landlord agrees to that.
Nine times out of ten it is the tenant who gives notice. However, there are circumstances which arise when a landlord needs to give the tenant notice. By far the most common of these instances is when the tenant is in breach their contract, and rent arrears is the most common reason. At other times landlords may wish to sell the property with vacant possession, or it’s their own home and they wish to return to live in it.
There are three stages involved if a landlord wishes to obtain possession either using the no-fault S21 process, which is preferred, or the breack of contract s8 process.:
1 – Serving a notice – this is a s21 Notice or a s8 Notice as specified in the Housing Act 1988
2 – Applying to the county court (the one nearest the property) for a Possession Order.
3 – Applying to the court again for the court bailiff to evict the tenant.
Tenants will often leave of their own accord at or before the expiry of the notice period – a minimum of 2 months’ notice with s21. If they refuse the landlord will need to go on to the next stage.
If the tenants are looking to be re-housed by a local authority they will be advised not to leave until they are evicted. This is because the law says local authorities have no obligation to re-house when tenants make themselves homeless, by leaving voluntarily.
If the tenant fails to leave after the landlord obtains a Possession Order, the landlord will need to use the services of the court bailiff to physically evict the tenant. The whole process, from start to finish including the two months’ notice period can take several months. All this depends on the workload of the local court.
Rent arrears is by far the most common reason for a landlord seeking and obtaining possession by evicting a tenant. Tenants have rights under the Housing Acts and the Protection from Eviction Act 1977, so landlords should use caution when in dispute as they may be accused of harassment – a criminal offence.
Even when tenants are in arrears, they still have security of tenure until the tenancy is ended legally and landlords are obliged to continue to carry out their obligations under the law, such as repairs and maintenance.
When a tenant is in arrears, landlords and agents should follow a strict protocol as set out in the Housing Acts and the Civil Procedure Rules. This will greatly assist in them getting recompense and a possession order should they need to go to court:
1 – Landlords / Agents should immediately contact the tenant when a rent payment is missed, impress upon them the seriousness of rent arrears and offer assistance – with Housing Benefit claims or re-scheduling of rent etc.
2 – This should be followed up with a formal Rent Arrears Letter and Rent Schedule (spreadsheet showing rent payments and missed payments), plus servicing section 8 notice and section 21 notices.
3 – A reminder letter and Rent Schedule should be sent weekly until the situation is resolved.
These documents can be downloaded here: www.landlordzone.co.uk/documents
Depending on the outcome of this, the landlord will have to decide whether to persue one or other of the routes to possession and debt recovery – s8 or s21. There are articles on this process and downloadable notices with guidance elsewhere on the LandlordZONE® website.
The serving of notices is a prerequisite to legal action. It may not be necessary to pursue this to court if the situation is resolved, but early service of these notices “starts the clock ticking” and saves time later – a Section 21 notice is a minimum of 2 months’ and a Section 8 notice is usually 14 days.
By serving both a s8 and a s21 this gives the option to chose later which route you take: it’s perfectly acceptable to serve the 2 notices, but you can only use one or the other route if you go for court action.
A section 21 notice is NOT a Notice to Quit – it is merely a “Notice Seeking Possession” which informs the tenant that the landlord is seeking possession, and may go to court if necessary. There are three types of Section 21 notice: (1) a Fixed Term s21(1)(b) and a Periodic s21(4)(a) notice, and for tenancies which commenced after 1st October 2015, the 6A notice covers both fixed term and periodic tenancies – make sure you serve the correct notice.
Notices should be served in accordance with the method/s of service specified in the tenancy agreement: usually (1) in person or (2) by post. It is very important to get proof of service of these notices. See our Notes on Serving a Valid s21 Notice in the LandlordZONE® Documents section.
A fixed term s21(1)(b) or 6A notice can be served during the fixed term up until and including the last day of the term, but not until 4 months of the term have elapsed. S21 notices are valid for 6 months from the date of service.
It is very important that all the Housing Act pre-requisites must be complied with BEFORE serving the notice; otherwise the notice will be invalid.
- A Gas Safety Certificate (when gas is used in the property) must be given to the tenant when the tenancy starts. This must be renewed every 12 moths.
- An EPC (Energy Performance Certificate) for the property must be given to the tenant – these are valid for 10 years.
- The government’s current edition of the “How to Rent Guide” must be given to the tenants.
- The damage deposit (if one is taken) must be protected by a government approved scheme within 30 days of receipt.
Landlords failing to protect the deposit within 30 days will be subject to a fine, and this and failing points 1 to 3 will invalidate any section 21 notice that is subsequently served. Landlords could find themselves stuck with delinquent tenants.
These notices may be served by electronic means if the tenancy agreement allows for this, but whichever means of service is used, proof of service is very important.
Ending the Tenancy using Section 8
There must be a clause in the tenancy agreement that allows for termination within the fixed term, known as the forfeiture clause; then a Section 8 Notice can be served at any time during the tenancy.
Where no such clause exists in the tenancy agreement and when the tenancy is periodic, a notice to quit should be served in conjunction with a Section 8 Notice – the notice to quit has the effect of terminating a periodic tenancy.
The Section 8 Notice must specify the grounds (Housing Act 1988 as amended 1996 schedule 2) on which the landlord relies and they should be worded in the notice exactly as they appear in the Act.
Section 8 can seek possession and can also include a money claim for rent arrears. The only grounds on which the landlord can rely are those set out in Schedule 2 of the Act.
It is important to specify only mandatory grounds where possible when seeking possession to avoid the possibility of a counterclaim.
No date is given in the Section 8 Notice by which the tenant must leave – it is not in itself a notice to quit, but a notice giving a period before which possession proceedings cannot start.
This notice period is different depending on the grounds relied on and the ranges between immediate notice and two months notice. Once this notice period has expired, possession proceedings can be started.
Ending the Tenancy using Section 21
The Section 21 Notice can be served at any time. The date after which possession is required should be specified in the notice, and all notice types must give at least two months’ notice from the date the notice is served on the tenant to its expiry.
Main Advantages of using a Section 21 Notice over Section 8
Section 21 gives the landlord a “no-reason, no-fault” right to possession, and providing the procedures and documentation are correct the landlord is guaranteed to get a possession order. With section 8 the outcome is much less certain and there is always the possibility of a defence or counter-claim by the defendant (tenant). If a tenant secures legal aid this can be a protracted and expensive legal process for the landlord.
Advantages of using section 21:
1 – The landlord does not need to give any reason as to why s/he wishes to terminate the tenancy, does not have to proove any breach of contract or offer up evidence of this.
2 – There is no possibility of a concocted defence or an expensive counter-claim.
2 – Providing a written tenancy agreement exists, the Accelerated Possession Procedure can be used which means the claim is a paper procedure and no court hearing is required.
4 – Providing there are no technical defects (valid agreement, notices, serving etc) in the submission the judge must make an order for possession.
Possession Proceedings – Section 21
There are two main routes to possession using s21: Accelerated Possession Proceedings and Standard (or normal) Possession Proceedings.
Accelerated Possession Proceedings
This is a document only procedure which can be used only where there is a valid written tenancy agreement in place and where a valid s21 notice has been served. Providing all other documentation is in order, such as those above and concerning Tenancy Deposit Protection, and no other complications, Accelerated Possession (AP) using court form N5b may be the best, and a slightly quicker route to a possession order than the Standard route. However, a judge always has the discretion to order a hearing if they think it necessary, for example where the tenant puts up a defence.
However, one major disadvantage with AP is that no money claim can be attached. If there are rent arrears a separate debt claim through the county court will be necessary at a later date.
If any of the above criteria are absent then Standard Possession Proceedings will have to be required, a hearing will take place, and a money claim can be attached to this.
The Possession Order
The court Possession Order will specify a date by which the tenant must leave the property. This is usually 14 days after the date of the order. But, where a tenant can prove “exceptional hardship” the judge can extend the possession date by up to a maximum of 6 weeks after the date of the order.
Standard Possession Proceedings
Once an application for Standard Possession Proceedings (court form N5) has been made, the court will list the claim for a hearing. In most cases (but this depends on the work load of the local court) the hearing will be listed for a date 6 to 10 weeks hence.
The Standard Route, because of the need for a hearing, tends to take longer, and can be more expensive, but gives the advantage of the option of adding a money claim.
Warrant for Possession
If the tenant does not leave on or before the Possession Order date, then the landlord must enforce the order by applying for a Warrant for Land – a Warrant for Possession.
The Warrant for Possession will be enforced by a County Court Bailiff.
Applying for the bailiff to attending involves another court fee and it can take several weeks before the bailiff can attend, depending on the workload of the local court.
Unfortunately for landlords a tenant can apply to the court to suspend the execution of the Warrant for Possession, further delaying the process. If an application is made, it be listed for another hearing, regardless of whether the court has the jurisdiction to suspend the execution of the Warrant or not.
At this hearing the judge will not have the discretion to suspend the execution of the Warrant if it was obtained under s21 or the mandatory grounds of section 8, but for those obtained under discretionary grounds for possession under a Section 8 Notice, a judge will have discretion to suspend the execution of the Warrant for Possession.
Protection from Eviction
The Protection from Eviction Act 1977 protects Residential Occupiers. It is a criminal offence if any person “unlawfully deprives the residential occupier of his occupation of the premises or any part thereof, or attempts to do so”, or withdraws services. In other words in England a landlord must not harass or evict a tenant from a property without gaining consent through the courts.
Tenants and licensees who occupy premises as a residence fall within this definition whilst they remain in occupation and can only be evicted by a Court Order; however there are exceptions including if the tenant shares a property and/or amenities with the landlord or their family, or if the tenant/s have a Bare License, a Contractual License or is a lodger.
In these cases (licencees) the period of required Notice to Quit may be shorter than Housing Act notices, and may only need to be “reasonable”. For example a lodger having been resident for 6 months paying rent weekly or monthly may reasonably expect 28 days or one month’s notice, though it has been held that a lodger in residence for may years was entitled to a longer notice.
Where accommodation is tied to employment the right to occupy may end at the same time as the job terminates, although this will normally be stated in the employment contract.
Only a Court bailiff has authority to physically evict tenants.
A landlord may be found guilty of a criminal offence for unlawful eviction, harassment, or even assault, for which other penalties exist, if they ignore the rules and take the law into their own hands.
Useful Links and Documents:
LandlordZONE® Document Downloads: www.landlordzone.co.uk/documents
Court Service Forms and Documents: www.justice.gov.uk/courts/procedure-rules/civil/forms
Housing Act 1988: www.legislation.gov.uk/ukpga/1988/50/contents
Schedule 2 – Grounds for Possession: www.legislation.gov.uk/ukpga/1988/50/schedule/2
Housing Act 1996: www.legislation.gov.uk/ukpga/1996/52/contents
Protection from Eviction Act 1977: www.legislation.gov.uk/ukpga/1977/43
Distress for Rent Act 1737: www.legislation.gov.uk/apgb/Geo2/11/19/contents
Possession Claims Online: https://www.possessionclaim.gov.uk/pcol/
Money Claims Online: https://www.moneyclaim.gov.uk/web/mcol/welcome
OFT – Guidance on Unfair Terms in Tenancy Agreements:
By Tom Entwistle, LandlordZONE®
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