I let my property on an Assured Shorthold Tenancy (AST) for six months. It expires this month but my tenants are happy to stay. Shorthold Tenancy renewell Do I need to issue them with a new contract?
You have two options here:
(1) Do nothing and the tenancy automatically becomes a Statutory Periodic Tenancy. This means a series of monthly tenancies (assuming rent paid monthly) with the original agreement still in force, i.e., all clauses and notice periods exactly the same as before.
(2) Sign up a completely new tenancy agreement.
With option one you have the advantage of not disturbing your tenant in any way, and not running the risk of triggering a move by asking to the tenant to commit to a further fixed term.
There’s no work involved for you, but you only have a month by month commitment – the tenant can leave at any time with just one month’s notice.
With option two you are asking your tenant to commit to a further fixed term, perhaps 6 or 12 months? It is also a good opportunity to increase the rent if this is appropriate, though you always run the risk of triggering a move with this.
It’s sometimes prudent to leave a good tenant in peace, hoping they will stay on as long as possible, and perhaps forgo any increase in rent you may have got.
If you use an agent to manage your property you may find they insist on a renewal, the main reason being they like to charge a renewal fee!
Bear in mind the deposit situation: if your deposit was not in a scheme on the original tenancy (taken before April 6th 2007) then it will need to go into a scheme on renewal.
This is not the case if the tenancy continues on as a statutory periodic one.
©LandlordZONE All Rights Reserved – never rely totally on these standard answers. Before taking action or not, always do your own research and/or seek professional advice with the full facts of the case and all documents to hand.