There are a variety of different kinds of tenancies available; it can be difficult for both new tenants as well as landlords. The question is, what exactly is a regular tenant in Periodic Tenancy? A “regular tenant” generally refers to someone who has a standard rental agreement or lease with a landlord for residential property. This arrangement typically involves renting every month, with lease terms ranging from six months to a year or longer.
Periodic tenancies can provide excellent benefits such as increased flexibility, and reduced paperwork. But, they do have their drawbacks.
We’ve created this article on the dangers and rewards of regular tenancies to assist you in making an informed choice before creating the contract.
What is a Periodic Tenancy Agreement?
A periodic tenancy is a lease that is over a specific length of time, often month to month. The tenancy can be operated on a week-to-month or monthly basis, but this isn’t as popular.
In contrast to fixed-term tenancies, periodic tenancies operate as a rolling agreement that can be ended by either the tenant or landlord in writing.
Types of Tenancy Agreements
Tenancies come in a variety of kinds of shapes and sizes, based on the conditions and terms of the contract. But, these are the most commonly used kinds of tenancies that you are likely to encounter.
Assured Shorthold Tenancy
Tenancies with assured shorthold are the most popular and apply to the majority of private rental properties with an onset date of fifteen January 1989. Tenancies that are assured start with a predetermined time frame of either 6 or 12 months.
Non-Assured Shorthold Tenancy
If the rental property you own is a minimum of PS250 or greater than PS100,000.00 in annual rent, or utilized as a vacation home the property won’t qualify to be an assured lease. It doesn’t mean you need to put the deposit of the tenant into a protection plan or give a Section 21 notice to expel tenants.
Assured Tenancy
There is no reason to require an assurance of tenancy today except if you’re in a housing association. The type of tenancy that this is offered gives tenants stability for the longer term.
Excluded Tenancy
Also known as a license leases are offered to tenants who live with their landlords and use the communal spaces.
Regulated Tenancy
If a tenancy began before the 15th of January, 1989, it could be considered a regulated tenancy. This means that tenants are entitled to greater rights about eviction as well as ‘fair rent’.
Company Let
If you rent to businesses there are different rules for security of deposit and eviction notices.
Fixed Term Tenancy
Fixed-term tenancies last for a set duration, based on the information that is stated in the agreement for tenancy. It is usually twelve months.
Short-Term Fixed Tenancy
A short-term fixed-term tenancy runs for a minimum of 90 days.
Periodic Tenancy
A recurring tenancy is in a recurring manner with no set end date. E.g. Month by month.
What is a Statutory Periodic Tenancy?
A statutory tenancy periodic lease occurs if an assured shorthold tenancy is at the end of its predetermined term, and the tenant can remain in the house without renewing the agreement. If the tenant can make payments and is acknowledged by the landlord, the lease will be renewed on a rolling, periodic basis.
This change from fixed term assured shorthold tenancy and regular statutory tenancy is seamless.
What is a Contractual Periodic Tenancy?
A contract for a periodic tenancy is different because it’s stipulated in the tenancy agreement instead of the automatic transfer from a fixed-term tenancy to an assured periodic tenancy. It can be decided at the beginning of the tenancy or before when the fixed-term contract is due to expire.
You can also contract a periodic lease at the beginning by defining the first term to be one week or month.
How Does a Periodic Tenancy Work?
A fixed-term lease is for a predetermined duration the periodic tenancy runs continuously, from month to month, or from week to week. The lease doesn’t come to an end until either party provides the other party notice.
If you are renting a periodic tenancy the duration of the lease is determined by when the rent is due to the tenant. For example, in a month-long period of tenancy, the tenant is expected to pay rent every month.
The shorthold tenancies will become periodic following the fixed-term agreement is over and there’s no contract made with all tenants. An assured shorthold tenancy can automatically convert to a regular one as long as tenants don’t change and are content to keep the contract they have signed. Similar conditions will be in place and there’s no additional requirement for the tenant or landlord.
Ending a Periodic Tenancy
To end a tenancy that is periodic a variety of legal options occur;
- The landlord and tenant both accept to end the tenancy
- The landlord decides to remove the tenant
- The tenant gives the tenant a notice
- The landlord issues the tenant a notice
Periodic Tenancy Notice: Tenants
For a periodic tenancy to be terminated the tenant must provide the appropriate amount of notice based on the conditions of the agreement for tenancy. Also, they must ensure that it is ended on the appropriate date. If, for instance, the tenancy was a periodic one that began on January 1st, it would have to be terminated at the end of the month or on the 1st day of each month. After this date, the tenant won’t be held accountable to pay rent.
Statutory Periodic Tenancy Notice
If it’s a legal regular tenancy, tenants have to offer at minimum a month’s notice in the case of a monthly contract or a minimum of 4 weeks of notice if they are signing a weekly contract. The notice should expire at the beginning or end of the end of the duration.
Periodic Tenancy Notice Period: Landlords
Tenants must be given the written “notice to leave” which should expire with the date of their rental term. offer the minimum period of notice and provide legal details.
How Much Notice to Give Landlord?
For the statutory periodic tenancy, it’s feasible to issue landlords with the notice required under Section 21 provided that the landlord gives tenants at least two months’ notice and the date of the last day is upon the day of the ending of the lease(ending tenancy early) for the duration that the lease is in force.Â
If the tenant doesn’t leave on the date specified and the landlord is not able to move out, they can obtain a court ruling to take possession. The changes in the law governing Section 21 notices are now requiring landlords to explain their reason, along with any relevant proof.
Benefits of a Periodic Tenancy for Landlords
A periodic tenancy can bring numerous benefits both for the landlord and tenant.Â
If a tenant wants to leave before the end of their contract uk, it’s essential to determine whether a tenancy break clause in the tenancy agreement is included. This clause offers a legal provision for early termination, granting flexibility to both the tenant and the landlord. To avoid potential disputes, the tenancy agreement should clearly articulate the terms of the break clause.
This includes;
- Flexibility increased. If you have to retrieve the possessions of your home, periodic tenancies speed up the process because it doesn’t require waiting for the expiration of a set period.
- Tenants are attracted by attractiveness. Some tenants find it advantageous to have this flexibility. If your tenant is moving often for work or is frequently required to move frequently, a recurring rental is appealing.
- The letting agencies have reduced their fees. Periodic tenancies can eliminate the necessity for renewals, as well as the administration fees that go with these.
- If it is necessary to make a change to the amount of rent the process is much easier with periodic rent agreements. Changes to rent payment schedules are made quicker when working on a month-to-month basis.
- If you’re experiencing issues with one particular tenant and you are having issues with them, a rental agreement may work in your favor since you’re more likely to expel problematic tenants in the last instance, even a break clause tenancy might be the reason.
Risks of Periodic Tenancies for Landlords
These advantages come with dangers. If you’re considering signing a recurring tenancy Be aware of possible dangers like
- Naturally, periodic leases tend to draw in tenants who are looking for short, less sluggish leases. If you’re looking for stability You might want to reconsider.
- In the same way, tenants with shorter terms are more expensive for marketing as well as screening potential tenants before they are replaced.
- In the case of a one-month or less notice, it is not possible to have an extended turnaround time if the tenant chooses to quit suddenly. It is essential to ensure that you have an end-of-tenancy clean and maintenance procedures perfected to ensure that you don’t lose the tenant.
- If your tenant is evicted within a “notice to leave period, you could be responsible for the payment of the council tax on the house. To prevent this from happening ensure that you have the requisite contractual periodic tenancy agreement that outlines that the tenant is responsible for paying council tax.
Read Also: Real Estate Investing Secrets: Where Smart Money is Headed in 2023
Conclusion: Periodic Tenancies: Good Idea?
Periodic tenancies can be an excellent idea since they provide greater flexibility to tenants and landlords as well as reduce the number of administrative tasks required throughout a tenure.
For your protection, however, to safeguard the investment you have made, we advise;
- Always draw up a contract or periodic tenancy contract. It ensures that you’ve got all the negotiated terms written down and you won’t have to pay taxes when your tenant is evicted suddenly.
- Doing your best to get your property’s marketing to draw new tenants in and prevent long periods of empty.
- Make sure that you have the procedures in place for rapid turnaround time to prevent any loss. This is a must.
- Maintenance and cleaning
- Management of inventory and reports
- Rent checks
- Smoke and CO checks and the installation
- Check-in, check-out and departure
- An accurate and simple in-depth inventory record is essential when facing a tense situation with potentially shorter leases. A simple process put in place can help safeguard yourself from any damage or loss as well as help you recover costs without having to go through long disputes.
