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Many tenants, and even landlords, are unclear of the options when the Fixed Term of an Assured Shorthold Tenancy (AST) ends. Similarly there can be uncertainty on both sides about how Notice should be given to end a tenancy.

Letting Agents are not always the best advisors or information source, either for the tenant or landlord, as they have their own motivation (business profit).

This post is intended to provide a brief overview. It does not include all scenarios or tenancy types, but is sufficient for the most common situations encountered on a recurring basis on the forum. Please note these rules apply in England/Wales.

A) What happens at the end of the Fixed Term of an AST?
(If the tenant wishes to leave; if the tenant wishes to stay; or if the landlord wishes the tenant to leave.)

1) The tenant wishes to leave

The tenant can leave without giving any notice. Even if the contract (tenancy agreement) says notice is required, this is not so. However the tenant must pay rent up to the last day of the Fixed Term, and must leave on or before the last day of the Fixed Term. See 2b below if the tenant stays one extra day!

It is, of course, polite and helpful to give the landlord notice, and also facilitates the handing back of the keys, the arrangement of a check-out inspection, and therefore also the return of the deposit (security bond). Obtaining a good reference from the landlord is also more likely if advance warning of departure is given, as this helps the landlord make future plans.

2) The tenant wishes to stay

a) The tenancy can be renewed for a further Fixed Term. The length of the new Fixed Term, and the rent, can be the same as before, or new terms (rent, length etc) can be negotiated and agreed between tenant and landlord (or his agent). Once signed, the new tenancy becomes binding.

b) The tenancy can simply continue by automatically becoming a Statutory Periodic Tenancy (SPT), sometimes referred to as ‘monthly’ or ‘rolling’.

When the initial Fixed Term ends (usually after 6 or 12 months), letting agents often ask, or demand, that tenants sign a new Fixed Term contract for a further 6 or 12 months. They often charge the tenant a fee for this, and almost certainly charge the landlord a fee too. So agents are often keen to encourage this option. For both tenant and landlord it is well worth speaking to each other direct as a SPT may well suit both, AND save money.

Whatever the agent may say, and whatever the contract may say, a SPT is a perfectly legal alternative (Housing Act 1988 S5).

When a Fixed Term tenancy ends, a Statutory Periodic Tenancy automatically takes over on a (usually) month by month basis. This will happen on the day following the end of the Fixed Term, provided the tenant does not leave. It can continue for ever, or until one side gives the other Notice (see below). No action is required (other than continuing to pay the rent), no new contract or tenancy agreement need be signed, and no fee need or should be charged. So even if both landlord and agent ask for a new Fixed Term to be signed, by simply not signing, and remaining in the property, the tenant will create a SPT.

The terms of the SPT, including the rent, remain exactly as before, except for the way it ends (see below).

When deciding whether to sign a new Fixed Term tenancy, or move to a Statutory Periodic Tenancy, it is worth considering:

i) A FT gives security to both sides – the LL is guaranteed rental income, and the tenant is guaranteed a home - for the full length of the new FT (but see ‘break clause’ below)

ii) A SPT gives flexibility – the tenant can leave at any time; the LL can gain possession at any time. (both subject to Notice as below)

iii) A FT may require payment of a fee for drawing up the new contract – a SPT should not.

It is worth pointing out that a new FT agreement may be at a new (perhaps higher) rent. This may influence a tenant's decision. For full details of how and when rent can be changed, see this post.

Finally, it is worth warning that where a landlord, and/or his agent, really want a new Fixed Term, there is always the possibility they they might issue a S21 Notice (1st step to eviction) if the tenant refuses to sign and moves to a SPT. As stated above, once on a SPT there is far less security.

3) The Landlord wishes the tenant to leave

The landlord (or his agent) must give the tenant a S21 Notice (see below). This must give the tenant at least 2 months notice, with the 2 month period ending on, or after, the final day of the Fixed Term. Some landlords automatically serve a S21 Notice on all tenants at the start of, or early in, the tenancy. This does not necessarily mean they will want the tenant to leave at the end of the FT, but it ensures they have that option when the time comes.

It should be noted that a S21 is invalid if:

a) It is served before, or at the same time as, the tenancy starts
b) It is served before any deposit paid by the tenant has been registered (and the ‘prescribed information’ given to the tenant)
c) It does not have correct dates/notice period

A S21 Notice is not a ‘notice to quit’, nor is it an instruction that the tenant must leave at the end of the two months. It simply tells the tenant that the LL may wish the tenant to leave, and may (may) seek possession of the property. If the LL wishes to do this, he must then obtain a court possession order. However, assuming the FT has ended, and the S21 was served properly (see above), the court will automatically grant the LL possession of the property – no reason for possession is needed.

REFERENCES
Housing Act 1988
(Statutory Periodic Tenancy: section 5 )
(notice to gain possession: Section 21 )

Example S21 (1), & (4) Notices (to end Fixed Term AST, and Periodic AST respectively)

Rent increases (how and when can rent be changed)

B) How can a tenancy be ended?

1) Mutual negotiation and agreement.

A LL and tenant can agree an ‘Early Surrender’ of the tenancy at any time, and on any terms they wish. It is sensible to agree this, and any conditions, in writing. Whether compensation for this is required to be paid by one side to the other depends who wishes to end the tenancy, and what the LL and tenant agree.

However, outside of a mutual agreement, the law specifies how/when a tenancy can be ended as follows:

2) During the Fixed Term

Neither a Landlord nor a tenant can normally end a Fixed Term tenancy early. The exceptions are:

a) if there is a 'break clause' in the contract (often after 6 months in a 12 month tenancy). The terms vary so read the contract carefully.

b) where the tenant breaks the contract in specific ways: the most common is rent arrears, but there are others. Where this happens, the landlord must serve a S8 Notice on the tenant, and then go to court to obtain a Possession Order.

3) At the end of the Fixed Term

As explained above (A1), a tenant can leave without giving notice (though it is sensible to discuss plans with the LL); A Landlord however must serve a S21 Notice on a tenant at least 2 calender months in advance.

4) After the end of the Fixed Term (ie during a subsequent Statutory Periodic Tenancy [or during a Contractual Periodic Tenancy])

* The tenant can end the SPT by giving the landlord one full Tenancy Period’s notice at any time. This must be in writing and sent to the address "for the serving of notices" on the landlord.
* The landlord must give the tenant two full Tenancy Period’s notice via a valid S21 Notice (see A3 above for invalid S21).

It is important to note that the notice given by either must end with a Tenancy Period. This Notice can end either on the last day of a Tenancy Period, or on the 1st day of the next Tenancy Period. (see Crate v Miller 1947).

If rent is paid monthly, then the Tenancy Periods run monthly starting the day after the FT ended (if rent is paid weekly, or quarterly, the Periods differ).

Example:

Say a 6 month Fixed Term tenancy starts on 24th June. It therefore ends on 23rd December. If a SPT then continues, the Tenancy Periods run monthly from 24th to 23rd of each month. Any Notice must therefore end on the 23rd (or 24th) of the month.

Say the tenant later serves notice on 22nd March, then the notice expires on 23rd April (covering the full Tenancy Period 24th March to 23rd April). However if the tenant gave notice two days later, on 25th March, then the notice would expire on 23rd May - a month later (Tenancy Period 24th April to 23rd May).

Note that the day rent is paid (which may or may not be aligned with the start of each Tenancy Period) is irrelevant.

If a landlord wishes to give notice to his tenant, he must give two full Tenancy Periods Notice (via a valid S21 Notice). The same rules on dates apply as in the example above, but with the extra month. See section A3 above for some examples of why a S21 may not be valid.

5) Where the tenant breaches the contract – eg rent arrears

During both a Fixed Term tenancy, and a SPT, a S8 Notice can be used by a landlord. He must still then go to court. There are 17 specific circumstances a S8 can be issued – the most common is where the tenant has rent arrears (Ground 8), and for this a landlord can go straight to court without the notice periods described earlier. However for a mandatory possession order, the arrears must equal two months rent both at the time the S8 Notice is served by the Landlord, and when the case comes to court. The list of S8 Grounds is here .

6) Where a landlord breaches the contract

In a few very rare and extreme cases, a tenant may be able to claim repudiatory breach of contract, return the keys, and end the tenancy. In the 1992 case 'Hussein & Others v Mehlman' , the judge ruled that rent was not payable from the time the keys were returned.

It should be noted that in that case the LL had deliberately ignored a multitude of very severe repairing issues, which had been referred to both Envronmental Health and a surveyor, over an extended period of time.

To qualify, the breach must be of a fundamental term of the contract, and of a sufficiently fundamental character, to amount to repudiation.

Because of the uncertainty of the law in this area, and the fact that this was only a County Court ruling, tenants are strongly advised to seek very specialised legal advice before relying on this to end their tenancy.


C) Some general law

Address for the serving of Notice
When serving notice, both landlord and tenant should do so in writing, not text, email etc. By all means use these informal ways to give a friendly ‘heads-up’ of your intention, and to discuss things, but it is the follow-up written (LETTER) Notice that matters. Note that the Notice period starts on the date the letter is received (served) NOT the date it is sent.

1) the landlord should serve notice on the tenant at the address of the property which is rented.

2) the tenant should serve notice on the landlord at the address provided "for the serving of notices" - usually this is on the tenancy agreement, but sometimes provided separately.

You are advised not to use Recorded Delivery as the recipient might refuse to accept/sign for the letter, or might be away, in which case it has not been served. Instead you should go to the Post Office and get 'Proof of Posting'. To be 100% safe, send two copies from different Post Offices. Notice is legally considered 'served' 2 working days after posting 1st class, or on the date it is hand-delivered (get a receipt or have a witness for proof).

S21 Notices.
As stated above, A S21 Notice is not a ‘notice to quit’, nor is it an instruction that the tenant must leave at the end of notice period. It simply tells the tenant that the LL wishes the tenant to leave, and may (may) seek possession of the property. If the LL wishes to do this, he must then obtain a court possession order.

Statutory Periodic Tenancies were created by the Housing Act 1988 Section 5(3)(e). Section 21 (4)a, specifies 2 months notice, ending with a tenancy period, by the LL on the tenant. Unfortunately the Act does not specify how much notice a tenant must give a landlord. Recognising this, a Court of Appeal decision (see Laine v Cadwallader below), ruled that one month Notice, ending with a tenancy period, was requiredby a tenant (whatever the contract may say), based on common law.

Note that all the above applies where rent is paid monthly. If it is paid weekly, or quarterly, different Tenancy Periods apply.

Tenant gives notice but fails to leave
Occassionally a tenant gives valid notice to end the tenancy, but then either changes their mind, or stays a few extra days. This can happen where, for example, the tenant is buying a property, or moving to a new rental, and his purchase or new tenancy is delayed/cancelled. The landlord is likely to be greatly inconvenienced, as is any new tenant he has agreed to let to who is now waiting to move in.

In these circumstances, the landlord can
a) seek an immediate possession order from a court and
b) charge the tenant double rent (see Distress for Rent Act 1737 S18)

REFERENCES

Example S8 Notice (seeking possession for rent arrears etc)
Housing Act 1988 Schedule 2 (S8 Notices: 17 Grounds under which a LL can issue a S8)
Example S21 (1)(b), & (4)(a) Notices (to end Fixed Term AST, and Statutory Periodic AST respectively)
Laine and Mitchellv Cadwallader & Cadwallader (2001) (Court of Appeal - tenant's notice period in a Statutory Periodic Tenancy)
Crate -v- Miller [1947] 1 KB 946 (Notice can end last or 1st day of Tenancy Period)
Shelter England (Tenants' rights) Shelter Scotland
Rent rises (how/when can rent be increased)
Repossession (What happens if a landlord's mortgage lender repossesses the property?)
Double rent - explanation (Tenant fails to leave after giving notice) Distress For Rent Act 1747 S18
Hussein & Others v Mehlman [1992] Breach of contract by landlord

For landlords:
Create a Notice Wizzard [ S21(1)b; S21(4)a; S8 ]
Landlord Law (Property solicitor’s website for landlords)
New Landlords (information for new or prospective landlords)

Please note neither the advice nor links above are exhaustive. If in any doubt, you are advised to research further. The above applies in Eng/Wales only - different rules apply in Scotland.