A periodic tenancy is a tenancy whose term is by reference to a specific period of time, for example, a week, month or a quarter of a year. The tenancy lasts for that period of time until it is eventually terminated. The tenant of a periodic tenancy will always have security of tenure (i.e. protection under the Landlord and Tenant Act 1954 (LTA 1954)) – no matter what.
The most common instance of when a periodic tenancy may arise is following the expiry of a ‘contracted-out lease’ (i.e. a lease of which the Tenant does not have security of tenure), the Tenant, despite the lease expiring, remains in the Property. If the Landlord continues to demand and accepts rent for a particular time period following the lease expiry, while it will always depend on the facts of the case, it could very well be argued by a Tenant that a periodic tenancy has arisen.
The acceptance of rent and no negotiations for a new lease to be put in place have both been factors that the courts have held to point to a periodic tenancy. This may not be the outcome either of the parties may intend to happen.
For example, a ‘contracted out’ lease expired on 31st December 2017. The Tenant is still at the Property and the Landlord still collects rent from the Tenant on the first day of every month. Neither the Landlord nor the Tenant have entered into negotiations to renew the expired lease. These events would point to a periodic tenancy and thus, the Tenant would enjoy security of tenure.
Periodic tenancies are usually not very favourable for Landlords as it could create difficulties when trying to terminate the tenancy and remove the Tenant. The strict procedure laid down in the LTA 1954 would need to be followed to terminate the periodic tenancy.
To Terminate the Periodic Tenancy
To terminate the periodic tenancy, the Landlord should either:
Serve a Section 25 notice that satisfies BOTH the statutory requirements of the LTA 1954 AND the requirements of a notice to quit to terminate the periodic tenancy
Serve a Section 25 notice that satisfies the statutory requirements of the LTA 1954 and SEPARATELY SERVE a notice to quit to terminate the periodic tenancy
If a Tenant under an expired ‘contracted out lease’ remains at the Property, a Landlord should protect its position by, at the very least, not accept any rent from the Tenant from the date of expiry of the lease (even if a new lease is being negotiated).
To avoid the risk of a periodic tenancy occurring in the first place, a prudent Landlord should (assuming the Landlord wants to regain possession of the Property or wants to ensure the Tenant does not have any rights under the LTA 1954) write to the Tenant to find out their intentions, specifically if they want to stay in the Property following expiry. If the Tenant does want to stay, the basis on which the Tenant is occupying should be regularised (even if it’s just for a day).
BHW has a commercial property department who regularly deal with the landlord and tenant matters. If you would like any advice on any of the matters mentioned above, contact Raj Hundal on 0116 402 7249 or firstname.lastname@example.org.