Going Periodic: What Happens When a Tenancy’s Fixed Term Ends?

Landlord law expert Tessa Shepperson explains everything about periodic tenancies, rolling contracts, contract renewals, and what to do when your AST’s minimum term is about to expire!

When a landlord rents out a property to a tenant, there will usually be a tenancy agreement that specifies a period of time which the tenancy will last for.  

This period of time is the ‘term’ of the tenancy. Where the term is set out in the tenancy agreement, it is usual to refer to the agreement as ‘fixed term’, as it will be for a fixed period of time.  This will normally be for six months or a year.  Less commonly, it can be for other periods of time.

But what happens when this period of time ends?  Let’s go through the different scenarios. 

What Happens When a Contract’s Minimum Term Ends

This will depend on whether the tenants have moved out or not. Let’s look at both cases.

1. If the Tenants Have Moved out

If the tenants move out at the end of the fixed term, the tenancy ends.  It will no longer exist. This is under a rule quaintly known by lawyers as ‘effluxion of time’.  

 

So, if the tenants have moved out by that date, then that is the end of it.  The tenants no longer have any liability under the tenancy and the landlord no longer has any right to charge rent.

 

Landlords often get upset about this if the tenants have moved out without giving them any notice.  Sometimes they may even put in their tenancy agreement a clause requiring the tenant to give notice if they want to leave at the end of the fixed term and providing for them to pay ‘rent in lieu of notice’ if they don’t.

 

Sadly (for the landlords) these clauses will almost certainly be void under the Unfair Contract Terms regulations (now part of the Consumer Rights Act 2015).

 

The tenant only signed up for a specific period of time.  Any clause forcing him to stay longer or attempting to make him liable for continuing rent if he has moved out will be considered ‘unfair’ and unenforceable.

2. If the Tenants Remain in Occupation

The situation is different if the tenants remain living at the property.   Although, save where there is a contractual periodic tenancy set up (see below on this), the tenancy will still end at midnight on the last day of the fixed term.  

 

If the tenants remain in occupation, then in most cases, if no new fixed term tenancy or ‘renewal’ has been signed, then as soon as the fixed term tenancy has ended, a new ‘periodic’ tenancy will be created automatically in its place.  

 

Unless or until a new fixed term tenancy or ‘renewal’ document is signed, the tenancy will then continue on this periodic basis.

 

There is nothing wrong with this.  Some tenancies have run on for years on a periodic basis.  You don’t HAVE to give tenants a new fixed term or renewal.  

 

Fixed terms are often preferable as they give both landlord and tenant more security.  Plus, they give landlords an opportunity to increase the rent.  Sometimes, however, such as if either the landlord or the tenant are uncertain of their plans, it may be better to let the tenancy run on as a periodic, as this is more flexible.  

 

The landlord may also prefer not to be tied down to a long fixed term if they are unhappy about the behaviour of their tenant and are only willing to allow them to remain if they behave themselves on a month by month basis.

 

Whether you allow the tenancy to run on as a periodic or insist on a new fixed term really depends on what you want and what is best under the circumstances.   

 

Incidentally, letting agents are often keen for tenancies to be renewed as this will trigger their entitlement to a ‘renewal’ fee. Don’t let them over-persuade you.  If the circumstances of your tenancy are that the more flexible periodic tenancy is preferable, then they should accept this.  They do not have an absolute right to a renewal fee – however much they may want it!

How are Periodic Tenancies Created?

So if the tenants remain in the property and no renewal is signed, there will be a periodic tenancy. How are these created? There are basically three options:

  1. If the tenancy is an assured shorthold tenancy
  2. If the tenancy is a ‘common law’ unregulated tenancy
  3. If the tenancy agreement provides for a contractual periodic tenancy

Let’s take a look at these in turn.

1.  Statutory Period Tenancy

If the Tenancy Is an Assured Shorthold Tenancy, then when the minimum term expires, the tenancy will continue due to statute.

Of the three, this is the most common situation. The new tenancy will arise because section 5 of the Housing Act 1988 says it will.

The Housing Act 1988 is the act which set up and regulates assured and assured shorthold tenancies.  Section 5 says that if the tenant remains in occupation after the end of the fixed term, then a new ‘periodic’ tenancy will be automatically created.  This new periodic tenancy will:

  • Start immediately after the fixed term ends
  • Be deemed to be between the same people who were the landlord and tenant at the time the fixed term ends
  • Be in respect of the same premises
  • Be ‘periodic’ which means it will run from period to period – normally monthly or weekly (see more on this below)
  • Save for this, it will be under the same terms and conditions as the preceding fixed term tenancy

This sort of periodic tenancy is known as a ‘statutory’ periodic tenancy – because it was created by statute, i.e. section 5 of the Housing Act 1988.

In most cases, the period will be monthly or weekly, depending on how the rent is payable under the terms of the tenancy agreement.  However, if the last payment of rent was different – for example if the tenant paid all the rent up front by one payment for six months’ worth of rent – then the period of the tenancy will reflect this last payment (so in our example it will be a six month periodic tenancy).

Most tenancies today are assured shorthold tenancies, so in most situations where tenants stay on after the end of the fixed term, they will have a statutory periodic tenancy.

2.  ‘Common Law’ Unregulated Tenancy

Some tenancies fall outside the statutory code set up by the Housing Act 1988.  In the main these are:

  • Tenancies where the landlord is a resident landlord as he lives in the same building (see more on this below)
  • Tenancies where the tenant is a limited company, or
  • If the rent is either:
    • more than £100,000 pa, or
    • less than £750 pa (or £1,500 pa in Greater London)

You will find a full list in Schedule 1 of the Housing Act 1988.

So far as resident landlords are concerned, this will normally be where someone is renting out some sort of granny annex of ‘garden flat’.  It will not apply to situations where the landlord owns two or more properties in a purpose-built block of flats and rents one and lives in another – here the rented properties will be ASTs.  If the landlord is renting a room to a lodger, this will normally not be a tenancy at all (see more about this in my Lodger Landlord website).

So, what happens if a tenant stays on after the end of the fixed term in a common law tenancy?  Section 5 will not apply as this is not an AST.  Generally, however, the law will imply a periodic tenancy where the tenant pays and the landlord accepts rent.

Under section 54(2) of the Law of Property Act 1925 it is not necessary to have a formal written tenancy agreement deed if a tenant is living in a property and paying rent where there is a fixed term of 3 years or less.  A new tenancy will be created automatically.  

The only circumstances where it will not be created will be if the tenant fails to pay rent or the landlord refuses to accept it.  Generally, the landlord will be looking to recover possession of the property here, in which case note that they will still need to get a possession order through the courts (my Landlord Law Eviction guide has instructions on how to do this).  

Download a template of OpenRent's Free AST for assured shorthold tenancies in the UK.

3.  The Tenancy Agreement Provides for a Contractual Periodic Tenancy

The third kind of case that creates a periodic tenancy is ‘contractual periodic tenancy’.  These are not common and only exist if the tenancy agreement signed by the tenant specifically provides for them.

When this is done, the tenancy does not actually end at all, but continues (assuming the tenants don’t move out) on a periodic basis, as set out in the agreement.  Normally this will be for a monthly periodic tenancy.

One of the advantages of contractual periodic tenancies is that you can specify what the period of your periodic tenancy will be so this creates certainty.   

What Won’t Happen

It’s probably worth mentioning, to conclude this article, that where someone has been living in a property as a tenant, they will not turn into a ‘squatter’ if they remain in the property after the fixed term has ended.  

They will stay a tenant and will be entitled to remain in the property until evicted through the courts.  

Another worry landlords have is that if tenants stay in the property a long time, they will suddenly acquire extra rights, such the right to buy the property.  This won’t happen, either.

Landlords will almost always be entitled to evict tenants who remain living in the property after the fixed term has ended.  The only circumstances where this is not the case is where the tenant has a protected tenancy under the Rent Act 1977.  But no Rent Act protected tenancies have been (or can be) created since January 1989, so this is not going to happen with a more recent tenancy.

In conclusion

In the vast majority of cases where a tenant stays on after the end of the fixed term where no new agreement has been signed, he will continue to have a tenancy – a periodic tenancy.  Indeed, he will also have a tenancy agreement as the terms of the preceding tenancy agreement will continue to apply.

However, there is nothing to fear about periodic tenancies and there are times when allowing a tenancy to ‘run on’ as a periodic is a good idea.  Hopefully this article helped you understand the issues and how the rules work.


Tessa Shepperson

Tessa Shepperson Landlord Law Blog Author

Tessa is a specialist landlord & tenant lawyer.  More of her writings can be found on the Landlord Law Blog.  She also runs the popular Landlord Law online service.

38 Replies to “Going Periodic: What Happens When a Tenancy’s Fixed Term Ends?”

  1. I have on going contract and have given my tenants 28 days notice in October last yrs 28 days notice Feb this yr and 28 days notice April this yrs I’ve also served section 21 eviction order to be out by 31 may what do I do if their still there and where do I go from there

  2. You need to be sure that your section 21 is correctly drafted first and that you have complied with all the pre-requisites required by law. Otherwise, it will be unenforceable.

    If the tenant fails to move out, your only option is to bring a claim for possession through the courts. If you try to evict in any other way this is unlawful.

    You can read about my service here: http://landlordlawinfo.co.uk/eviction/

  3. i have got a assured six months shorthold tenany ware the time is up now they have now signed again for another 12 months on the form can any one back out before the 12 months is up

    1. I’m quite sure if you give 28 \ months notice to quit,that would be lawful.your tenancy would then end of you would move out.
      Notice,gives the landlord time to re_,let from the day you move out.

  4. I am a tenant of a housing association. What are my rights regarding buying my flat. I have lived for over 40 years. My wife and I are pensioners.

  5. Is the rent set in stone that it should be every 4 weeks or can the landlord refuse a monthly payment ?? I am struggling to pay every 4weeks as it can be a double payment that month ?

    1. Hi Penny,

      If your minimum term expires and your tenancy becomes periodic, then you will need to continue to pay over the same period as your last payment of the minimum term. I.e. if you paid monthly all the way through your assured shorthold tenancy, and then the tenancy becomes a statutory periodic tenancy, then you will need to continue to pay monthly now that it is a periodic tenancy.

      As Tessa writes:

      In most cases, the period will be monthly or weekly, depending on how the rent is payable under the terms of the tenancy agreement. However, if the last payment of rent was different – for example if the tenant paid all the rent up front by one payment for six months’ worth of rent – then the period of the tenancy will reflect this last payment (so in our example it will be a six month periodic tenancy).

      The answer will most likely be in your contract!

  6. I rent out my flat and my mortgage company have stipulated that I must have a short term tenancy agreement in place either for 6 months or a year with the tenant. I always require the tenant to sign a 6 months lease at the start of their new tenancy & then offer them a 12 months agreement once the 6 months have come to an end. This does cost me money but as it is a stipulation with my mortgage company that they will only allow me to rent out my property with this in place I have no alternative.

  7. Hi Tessa,

    My Tenant has left my property. The tenancy agreement states a deposit is payable but there is also a separate signed agreement stating that the tenant paid 2 months rent only in advanced and none of the rent paid during the tenancy was for a deposit as this was paid by the housing department. The tenant is now claiming she paid a deposit. What do you think?

    Regards

    Mike

  8. Thanks for your article which is very useful. My tenant is likely to stay a few more months until his visa ends, which might make it challenging to find new tenants in the winter. Could you clarify if I could “force” my tenant to move out if he can’t sign a new fixed term(a year) tenancy?

    1. Hi John, if the fixed term has ended then the only way you can ask him to leave is by serving a section 21 notice, however that has to be a minimum of two months so might not benefit you too much and if he doesn’t leave after two months and decided to stay another month then you would have to spend two months going through a court process. I work for a letting agent and most months of the year we are letting properties easy so providing the flat is in good order and the price is right, you will relet your flat. Good luck

  9. I will have rented my flat for 4 years in November. My Tenancy has been on going. I have Not had to sign anything. I have had a rent rise which I can just manage. I am a 60 year old Lady with No Private Pension and Now told I will not get my state Pension until 66 I have No savings I am worried about the future?

  10. My tenant is currently on a periodic agreement and is not paying rent on time as well as making excuses when I tell him I need to visit the property. I need to increase the rent can I do this?

  11. Hi Tessa

    In my AST it states the following:
    “The Term shall be from x date to x date and then monthly periodic….
    The “Term” is to include any periodic tenancy following the fixed term.”

    The agent asked if I would like to renew the contract, but I have requested to continue to monthly periodic as stated in the contract. The agent said it is just a standard thing they put in all the contracts and the landlord has to approve for that to go forward. Is this correct? Do they have a right to decline this?

    Thank you

  12. I have to say that in the vast majority of cases I’ve found the periodic tenancy arrangement, following a six month AST, to be extremely useful. No tenant has ever asked me for another fixed term tenancy and the periodic tenancy means no extra paperwork for me, while the conditions remain the same as before so everybody knows what to do. I have one tenant with a periodic tenancy now lasting more than 10 years. He’s happy with the arrangement and so am I.

  13. I have a tenant who has now left. He was on a fixed six month AST followed by 11 months periodic. Should I have provided the prescribed information again once the periodic tenancy started. I protected his deposit late (28 days after the deadline) and now he is claiming his compensation. Does he have the right to claim it twice, once or the AST and once for the periodic?

  14. We have been tenants since May 2006 and the rent is up to date. Our landlord sent us a section 21 notice and wants possession on the 14th August. We had to contact him as my wife has been undergoing tests for a serious liver complaint and he has not been too accommodating. He will not take action for possession as we have agreed to move by the end of August.
    The landlord has declined to inform us why he wants us out and taken an aggressive stand even though we have a long term and harmonious relationship with his office.
    Should we have been given the right to acquire the property.

  15. Hi

    I am a landlord and I got a letting agent to only collect rent from tenants for a 12 months term. This has come to an end and the tenant wants to stay in the property and are happy to deal directly with me. The letting agents informs me there is a charge of £1400 if the tenants continue to occupy the property. I have paid them £120 for a year and do not want to continue with them. What is the right way not paying for this?

  16. I would be careful about the notice period on fixed term contracts being an unfair clause. I thought the same but was ruled against. I basically argued the same as above. Here is a snippet of the judgement. I guess they can add any special clauses they want.

    The Tenant asserts that she did not have to give notice if the tenancy was going to end
    on the Fixed Term end date.
    10. The Office of Trading Guidance does indeed stipulate that a Tenant is not obliged to
    give notice to terminate the tenancy at the end of the Fixed Term; however this
    Guidance only applies to standard clauses in a contract. Special Clauses fall outside the
    Guidance and it may have been prudent of the Landlord/Agent to explain this to the
    Tenant when enquiring of her intentions in various letters.
    11. However I am satisfied by the Special Clause 8.1 in the Tenancy Agreement, signed
    and agreed to by the Tenant, that the Tenant was obliged to provide the requisite notice
    and she therefore is liable

  17. I am currently in a 12 month AST with 6 month break clause followed by 2 months notice by either party which is about to expire. When the agreement reverts to periodical will the 2 months notice still apply or will it be 1 month

  18. Hi..
    I have rented a room in my house to a student on a periodic tenancy month to month basis.
    She signed the first month and paid first month . The 2nd month was week late , no agreement was signed for the second month. The third month was due 27th Oct but now paid yet and again no monthly contract signed for this month.
    She has not been a good tenant, I would come home to face groups of students in my house drinking alcohol late in the night and she has guys staying over nigh In my house . I basically want her out .
    Can I end this tenancy? As she has not signed the contract this month or also not paid yet? Does she need to sign each month as it is a month to month periodic contract?

    JG

    1. Hi John, it really depends on exactly what kind of contract you originally signed! If she’s a lodger (i.e. if you also live in the property as your home) then the process would be different to if you signed an Assured Shorthold Tenancy (AST), or another kind of short-term agreement. Lodgers can generally be asked to leave with ‘reasonable notice’ and will not have the same right to stay as tenants who signed an AST.

  19. Hi,
    I have a tennant who says he is a student and he has a six month fixed term agreement to rent a room in the property and use the shared facilities.
    For the past few months he has paid his rent very late, usually 13 days late.
    He is very condescending about the property and often has a partner staying with him for days at a time.
    The other tenants always pay on time and do not cause any trouble.
    Can I end his contract if I give him 2 months notice?
    He made out he wanted to leave, but now is asking to stay.

    1. Hi Raymond. In an AST, you can’t serve a section 21 notice within the first 4 months (with the earliest they could be made to leave being 6 months in. If the fixed term has expired, then yes you’re usually free to serve a notice to quit.

  20. I have an ast with a six month notice as it was for a fixed trrm of 15 years it ended 4 years ago do all the same terms apply including the six months notice now that it is a periodic tenancy?

    1. Hi Ben – yes the notice period usually applies only after the fixed term has expired. So if the notice period says 6 months, then the landord/tenant will have to give 6 months’ notice if they wanted to leave/reclaim the property.

  21. Hi, I am planning on moving but haven’t signed anything since the minimum 6 month contract nearly 3 years ago, do I have to give notice to my Landlord if I am moving. I will obviously tell him I have moved but do I legally have to give him a notice period.
    Thanks

  22. My 1 year fixed term AST ended a week ago. The agency contacted me a day after the contract ended saying the landlord is offering a new fixed contract of 1 year with a 25£ raise of the rent. He also said that although the renewal date has passed, we could get it done ASAP as it was only up few days ago. We obviously would like to be on a periodic tenancy for at least this month. Can they make the new contract start from a past date? Without even giving a notice of the rent raise? How do I know if I’m in a periodic tenancy at the moment?

  23. Landlord/agency want to renew our AST ended few days ago, to a new fixed term AST of 1 year with 2 months break clause. Does this mean we can leave whenever we want as long as we give a 2 months notice? I read somewhere that many AST have an initial 6 months where you can’t move out, even with a 2 months break clause. We don’t have the new contract as we didn’t give an answer yet, but the agency wants us to pay the renewal fee before we can have the contract.
    We might agree to having a 2 months notice, if there are no other bounding clauses, but we want to read the contract first before we pay the fee. What do you suggest us to do? We’ve already discussed a lot with the agent to get some flexibility on the notice period, as they didn’t even want to give us any kind of break clause at first.

  24. My partner and I were told on the 22 of November a month before the end of our fixed term contract (22nd of December) that we would not be given a new fixed term contract and instead would go onto a periodic contract. We found a property withinn a few days but were told that as we had not given a month’s notice before the end of our tenancy (which we were not able to because of the short notice we were given) that we would have to pay rent until the 21st of January (at a higher price than our fixed contract too). Do we have grounds to leave by the end of our tenancy and refuse to pay for the two months extra rent on a rolling contract we did not agree to?

  25. What a problem ? tenant has 6 month AST then is moved onto rolling contract by letting agents , 2 years later gives 1month notice to leave paying rent as required (ok so far) , informs council he left the property before the end of the notice period and now as landlord i have been charged for those days of council tax AFTER THE TENANT LEFT even though tenant still had a key and access to the property. The council just say pay up unless the original AST had a continuation clause written in !!

  26. Hi

    My tenant is now on a periodic contract, her rent is due on the 1st of the month, she gave me a month’s notice on 8th December. Does her tenancy end on 8th January or the end of January. I’ve been told the end of January.
    Can someone please clarify this the open rent agreement states – sec. 11.2 the tenant giving written notice of at least one month and expiring on the last day of a period of the tenancy. What does this mean?
    Need advice please

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