A periodic tenancy or ‘rolling contract’ is a type of tenancy agreement with no fixed end date that is used in rental properties. It is an agreement that rolls over on a periodic basis, usually monthly or weekly, until either the tenant or landlord terminates the agreement. In this article, we will discuss everything you need to know about periodic tenancy including how they work and what you need to know as a tenant or landlord.
How Does a Periodic Tenancy Work?
An Assured Shorthold Tenancy (AST) becomes periodic when a fixed term ends, unless you agree to another fixed term.
If the landlord doesn’t renew the tenancy agreement or issue a formal notice to end the tenancy at the end of the fixed-term, the tenant is entitled to continue living in the property while paying rent. If the landlord continues to accept this rent; a periodic tenancy will arise.
A periodic tenancy works by rolling over on a periodic basis, usually monthly or weekly. The terms and conditions of the tenancy agreement remain the same, except for the period of the tenancy. The tenancy agreement will continue to renew until either the tenant or landlord terminates the agreement.
What are the Rules?
If following the expiry of a fixed term, a periodic tenancy will be subject to the same clauses in the original tenancy agreement.
The term of the periodic tenancy will be dependent on when you pay rent. For example, if you pay it every month, it will be a monthly periodic tenancy.
What is the Difference Between a Contractual and Statutory Periodic Tenancy?
The main difference between a contractual and statutory tenancy is how they are created.
A contractual tenancy is created by an agreement between the landlord and tenant, which specifies that the tenancy will continue on a periodic basis after the initial fixed-term has expired. The terms of the tenancy, including the rent amount and other conditions, are agreed upon in a written contract signed by both the landlord and tenant.
A statutory tenancy, on the other hand, is created automatically by operation of law when a fixed-term tenancy expires, and the tenant continues to occupy the property and pay rent. The terms of the tenancy, including the rent amount and other conditions, are the same as those in the original tenancy agreement, unless the landlord and tenant agree to change them.
Another difference between the two types of tenancies is how they can be terminated. A contractual periodic tenancy can be terminated by either the landlord or tenant with proper notice, as specified in the tenancy agreement.
Whilst, a statutory tenancy can be terminated by either the landlord or tenant with proper notice, but the amount of notice required may be different and may be specified by law.
Overall, the main difference between contractual and statutory periodic tenancies is that one is created by agreement between the landlord and tenant, while the other is created automatically by law. However, the terms and conditions of the tenancy can be very similar in both cases.
What Happens When a Tenancy Goes Periodic?
When a tenancy goes periodic, it means that the fixed-term tenancy has ended, and the tenancy has automatically converted to a periodic tenancy. This can happen when the tenant remains in the rental property after the fixed-term agreement expires and continues to pay rent on a periodic basis.
Here’s what typically happens when a tenancy goes periodic:
- Rent: The rent amount and payment frequency usually remain the same as they were during the fixed-term tenancy, unless the landlord and tenant agree to a change.
- Notice Period: The notice period required to terminate the tenancy may change. In some jurisdictions, the notice period required to end a periodic tenancy is longer than the notice period required to end a fixed-term tenancy.
- Security Deposit: If the landlord holds a security deposit, it may continue to be held during the periodic tenancy. However, the landlord may be required to re-protect the deposit if it was protected under a government-approved tenancy deposit scheme during the fixed-term tenancy.
- Tenancy Agreement: If the original tenancy agreement included terms that are no longer relevant during the periodic tenancy (such as an end date), these terms will no longer apply. However, all other terms and conditions of the original agreement continue to apply.
- Renewal: The tenancy will continue until either the landlord or tenant gives notice to end it, or until a new fixed-term agreement is signed.
When a tenancy goes periodic, the main change is that it continues on a rolling basis rather than a fixed end date. The rights and obligations of the landlord and tenant continue to be governed by the terms of the original agreement. However there are some adjustments to reflect the periodic nature of the tenancy.
Is a Periodic Tenancy Good?
This depends on the individual circumstances of the landlord and tenant. Here are some potential advantages and disadvantages:
Advantages:
- Flexibility – A periodic tenancy can provide tenants with more flexibility, as they are not committed to a fixed-term agreement.
- Easier to end – A periodic tenancy can be terminated by either the landlord or tenant with proper notice, which can be easier than terminating a fixed-term agreement.
- No need to renew – With a periodic tenancy, there is no need to renew the agreement when the fixed-term ends. The tenancy simply continues until notice is given to end it.
Disadvantages:
- Lack of security. A periodic tenancy can be less secure for tenants, as they may have less stability than with a fixed-term agreement.
- Rent increases. With a periodic tenancy, the landlord can increase the rent amount with proper notice. This may be more frequent than with a fixed-term agreement.
- Potential for eviction. In some jurisdictions, landlords may have an easier time evicting tenants with a periodic tenancy than with a fixed-term agreement.
It’s important for both parties to understand the terms and conditions of the tenancy and to communicate openly.
How Can a Tenant End a Periodic Tenancy?
Ending a periodic tenancy typically requires giving notice to your landlord or letting agent. The amount of notice required and how to serve notice will be outlined in the terms of your tenancy agreement.
These are the typical steps to serve notice on your tenancy
- Check the notice period. Review your tenancy agreement to determine the amount of notice required to end the tenancy. Notice is typically a set number of days or weeks before the intended end date.
- Prepare your notice. Create a written notice that includes the date you plan to vacate the property and any other required information. Be sure to keep a copy of the notice for your records.
- Deliver the notice. Deliver the notice to your landlord or letting agent, as specified in your tenancy agreement.
- Plan for your move. Begin planning to move out by the end of the notice period. This will include packing your belongings, hiring movers, and scheduling a final inspection with your landlord or letting agent.
- Complete your tenant obligations. Before you move out, be sure to complete any required tasks specified in your tenancy agreement. Such as cleaning the property or repairing any damage.
- Hand over the keys. On the last day of your tenancy, return the keys to the property to your landlord or property manager.
It’s important to follow the proper procedures when ending a tenancy. This will ensure you avoid any potential disputes or legal issues.
Be sure to review your tenancy agreement and communicate openly with your landlord or letting agent throughout the process.
Can a Landlord End a Periodic Tenancy?
Yes, but they must follow the proper legal procedures and give the tenant proper notice.
If the landlord wants to end the tenancy and the tenancy agreement has not been breached, notice period is usually two months. This is known as a Section 21 notice.
The notice must be given in writing and must specify the date on which the tenancy will end. The notice should be delivered to the tenant as specified in the tenancy agreement – in person, by post, by email.
Landlords must comply with all relevant laws and regulations when ending a tenancy. If you’re a landlord, seek legal advice to ensure that you’re following the proper procedures.
Need More Renting Advice?
Navigating the world of renting can be difficult, but we’re here to help. Check out more of our renting advice to help you from start to finish – all in one place. Alternatively, give our renting podcast a listen, Phil Spencer answers your frequently asked questions!
Last Updated: March 14th, 2023
