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When you set an AST there is an initial fixed period, but after the period expires the Landlord then has two choices - either issue another fixed term tenancy agreement or let the tenancy run on, which is called a periodic tenancy.I am often asked what is the best policy. This all depends on the Landlord's needs and the tenant in the property.
If you enter into another fixed term there is security for both the Landlord in knowing that the tenant is in the property for that fixed term and the tenant in that they can not be evicted unless they breach the terms of the tenancy. However during the fixed term the Landlord can not use Section 21 Notice (2 month notice), and in reality if a tenant is going to leave the property, they will leave regardless of whether there is a fixed period or not.
If you enter into a periodic tenancy the Landlord can use Section 21 Notice and give the tenant two month's notice of his intention to end the tenancy, however on the flip side the tenant can give one month's notice to vacate the property.
Rebecca Brough is a Solicitor at Fidler & Pepper who deals with Residential Landlords on a daily basis. Rebecca offers landlords requiring legal help a Free initial consultation.
Free property management software, Free tenancy agreements
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My tenant asked me for a 5 year tenancy agreement after the fixed period ended. I didn't want to be locked into this long tenancy agreement so I asked him to let it become a periodic tenancy. That way, he doesn't have to pay 25 quid a year for deposit protection.
In the end, I issued him with a 12 month AST, charged 30 quid administration and the periodic tenancy will start in Jan 2012. In the new AST there's a clause that says that the rent will rise by 5% each year. Obviously, this is negotiable each time. This was acceptable to both of us.
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