A period tenancy is the default agreement if a tenant remains under tenancy after an agreed tenancy expires. One a tenancy reaches the end of its terms; two things will usually happen. Either the tenant vacates the property, or the landlord and tenant will form a new tenancy agreement. If after the tenancy has ended the tenant remains in the property, which they pay rent for, and the landlords accepts the rent from the tenant, then a new agreement is formed, a periodic tenancy. If the landlord and tenant both carry on with the tenancy without putting a tenancy in place the new tenancy will be a periodic tenancy, The Housing Act (1998). There are two different types of perdioc tenancy. Either staturory periodic tenancy or contractural periodic tenancy. The length of the new formed agreement is based on what the original tenancy terms were. If the original tenancy ran month to month, in that the tenant paid rent monthly, then the new period agreement will run monthly. If the tenant paid rent weekly, the periodic tenancy agreement will run weekly.
Statutory periodic tenancy.
If the landlord and tenant agree that once the initial tenancy ends, a period tenancy will begin and the terms of this are agreed in writing then the periodic tenancy will be contractual. If it isn’t agreed how the tenancy will continue after the end of the fixed term agreement
then the periodic tenancy which is formed is a statutory periodic tenancy, section 5 of The Housing Act (1988), states a new lease will be created as a statutory periodic tenancy. The new tenancy runs periodically dependant on the rental period in the fixed term contract. If a tenant pays a lump period to start with for example 3 months in one go, then after that continues to pay rent monthly, the periodic tenancy will run monthly. This new period tenancy is separate from the fixed term agreement. Some of the terms may be shared but for taxes, legal purposes, deposits, and administration it is and should be treated as a separate contract to the previous fixed term agreement.
To determine if the tenancy will continue as contractual or statutory the tenant or landlord should first check the fixed agreement they held. They should check to determine if there is a clause relating to a periodic tenancy. If it is detailed in the fixed term agreement, then it will state how the periodic tenancy will precede. What it states in the fixed term agreement usually applies. It may state in the clause that the tenancy will continue as a contractual periodic tenancy, in this case the tenancy is usually contractual. If it is not detailed, then it will likely be a statutory periodic tenancy.
What are the differences between the two types of tenancy’s?
The terms of the tenant deposit will not differ if the deposit is protected by a deposit scheme. If the deposit is not protected by a scheme then their may be different terms between the two tenancy’s, but this will be detailed in the terms.
At the beginning of new tenancy’s landlords may be required to provide the tenants with documentation. As the periodic lease is treated as a new tenancy the landlord should ensure that all documentation that should be re-issued is up to date. With a statutory tenancy, landlords should ensure that the tenants are informed of any new documentation. If the tenancy is contractual the tenant and landlord should follow what they have both agreed upon.
In line with the energy efficiency requirement, landlords can’t lease properties which have an energy rating of F or G unless that have an exemption, or the property does not require a CPE. Each time a landlord leases a property they must provide these ratings.
Increase in rents
For a fixed term lease a landlord can create a rental control clause. Under this clause, the landlord and tenant agree that if it is fair the landlord may implement an increase in rent. If there is no clause in place, a landlord should use a section 13 form if they want to increase rent. To do this the tenant must have been in the property for a minimum of 12 months. As the periodic tenancy is separate from the fixed term then the rental control clause can’t be past over to a statutory periodic tenancy, and a section 13 form will be needed. However, in contractual periodic agreements, such clause might be included.