Ending a tenancy agreement: the rules and regulations

Landlord Advice

26 April 2019

Endings can be difficult. And as a landlord, you can be left wondering how to do best by you and your tenants when it comes to bringing a tenancy agreement to an end.

Thankfully, landlords have a lot of options they can take. But the right one for you will likely depend entirely on the type of tenancy agreement you and your tenants have agreed upon.

Read AXA’s guide to ending a tenancy agreement to learn about the rules and regulations that govern tenancy agreements and the steps landlords need to take to bring them to a close legally and lawfully.

How to end an assured shorthold tenancy in England and Wales

When an assured shorthold tenancy agreement comes to an end, landlords have a few routes they can take. If both parties are happy to continue the rental relationship, they can:

  • Agree on a new fixed term contract, which could involve rent being raised or tenants being charged a renewal fee
  • Continue living in the rental property and choose not to sign a new contract after the fixed term of the tenancy agreement ends – this changes the tenancy contract to a periodic agreement

However, if landlords want to bring the tenancy agreement to an end, specific procedures need to be followed to remain lawful and help prevent disputes.

The minimum length of assured shorthold tenancies is six months, meaning landlords can’t serve a notice to bring a tenancy to an end during this period, only after. But if a tenant is found to be in breach of the terms of the tenancy agreement, landlords are within their rights to regain possession of their rental property by:

  1. Serving a Section 21 Notice or a Section 8 Notice as outlined in the Housing Act 1988
  2. Applying to the county court for a Possession Order
  3. Applying to the county court for the court bailiff to evict the tenant if the above step isn’t followed by the tenant

Similarly, if a landlord is found to have breached the terms and conditions of a tenancy agreement, this also gives tenants grounds to bring it to an end earlier than agreed.

How to end a short-assured tenancy in Scotland

The rules around ending assured shorthold tenancies in Scotland are a little different. Known as short assured tenancies, these tenancy agreements last a fixed period and a minimum of six months.

Landlords aren’t required to give a reason if they want tenants to leave at the end of a short assured tenancy but they must give tenants a notice to quit and a Section 33 Notice (which lets tenants know that landlords want them to move out on the day the tenancy agreement expires).

Landlords can rightfully serve a Notice to Quit and a Section 33 Notice together if they:

  • Provide tenants with at least two months’ notice
  • Make it clear that landlords require possession of the property
  • Let tenants know that if they haven’t left the rental property after the notice has expired, they can serve them with a Section 11 Notice before pursuing routes to repossess the property
  • Give tenants information about where they can go for advice after serving notice

Before landlords take legal action against tenants to get their property back, they need to provide tenants with a written notice that they’re taking proceedings to court. This notice should be written on an AT6 form and detail the reasons why the landlord wants the property back, how they apply to the tenant, and how much notice the tenant has before the landlord contacts the court to evict them.

How do landlords serve a Section 21 Notice?

A Section 21 Notice is a way for landlords to inform tenants that they’re seeking repossession of their rental property and that failing to adhere to the established notice periods could result in proceedings ending up in court. 

When landlords serve a Section 21 Notice, tenants are given a minimum of two months’ notice to vacate the property. If they refuse to leave within the specified time period, landlords may be required to apply to the county court for a Possession Order or the court bailiff to help with the eviction process.

Before serving a notice to tenants, it’s good practice for landlords to ensure that all Housing Act requirements are met. This includes:

  • Ensuring tenants have an up-to-date copy of the property’s gas safety certificate
  • Ensuring tenants have a copy of a valid energy performance certificate
  • Ensuring tenants have the latest edition of the government’s ‘How to rent’ guide
  • Ensuring the damage deposit is protected by a government-approved deposit protection scheme within 30 days of receiving it

If landlords serve a Section 21 Notice and it’s found that any of the obligations listed above haven’t been met, the notice can be made invalid. That’s why it’s a great idea to remain up to speed with the A to Zs of being a landlord so that you can stay on top of the paperwork that keeps you legal and lawful.

How to end a Periodic tenancy

If a tenant decides to stay in the rental property after the end of the original fixed term – even if it’s just a few days longer – the tenancy agreement automatically becomes a statutory periodic assured shorthold tenancy.

To end a periodic tenancy, tenants are legally required to give their notice in writing. This will usually be one month (or a minimum of 28 days if the rent is paid weekly).

The notice period needs to end on the last day of a tenancy period to give a clear and full tenancy period’s notice.

What notice do tenants have to give to end a tenancy agreement?

At the end of a fixed term, the tenancy ends and there’s no stipulation that the tenant must give notice. The tenant can leave without giving notice, providing they leave on the last day of the tenancy. However, if a contract has a formal notice period, then this needs to be followed by tenants.

It’s common courtesy for tenants to let landlords know that they want to leave – usually by providing landlords with an end of tenancy letter or verbal notice – as it gives landlords adequate time to market their rental property early and avoid periods of vacancy.

Plus, if a tenant is moving on to another tenancy, it’s likely they’ll ask you for a landlord reference, so having a formal check-out procedure in place could be beneficial for all parties involved.

Can break clauses be used to end a tenancy agreement?

Some long-term tenancy agreements will contain break clauses that will have been agreed by landlords and tenants at the offset of a tenancy. Break clauses can allow either landlords or tenants to bring a tenancy agreement to an end earlier than the tenancy agreement states.

Break clauses are likely to come into effect when a specific action has taken place before a tenancy agreement could be ended by other means.

For example, a landlord may include a break clause that states they can terminate a tenancy after the initial six-month period if a tenant has fallen into rent arrears and all necessary steps to help them financially have been taken, or, if illegal activity is being carried out at the rental premises.

Can a tenancy agreement be ended early?

There may be occasions where landlords or tenants want to bring a tenancy agreement to an end earlier than originally anticipated. For example, if a landlord wants to move back to or sell their rental property.

For a tenancy to be ended early, landlords and tenants need to negotiate whether it’s feasible and new terms and conditions must be agreed upon. This could result in tenants or landlords having to pay an early termination fee as part of the conditions of surrendering the tenancy agreement early.

Keep in mind that neither landlords or tenants are legally obligated to end a tenancy agreement early and can enforce the contract to the end of the term.

What happens if a tenant leaves a tenancy agreement without giving notice?

If tenants leave without giving notice or without getting a landlord’s permission to leave, the tenancy agreement won’t have legally ended, and the tenant will continue to be held responsible for the relevant rent and bill payments until the tenancy is ended via the correct procedures.

If this happens, landlords are obligated to attain court orders to make tenants pay the withstanding rent they owe. Tenants can also be ordered to cover the associated court costs too. Other potential repercussions for tenants leaving without giving notice include:

  • Not getting a tenancy deposit back
  • Not getting a reference from your landlord for your next rental property
  • Building up rent arrears if a landlord continues to charge you until formal notice procedures are followed

What tasks do landlords need to complete when a tenancy agreement ends, and tenants move out?

It’s a good idea for landlords to carry out a property inspection with their tenants on the day they’re moving out. This’ll ensure that it has been left in the condition it was in when the tenancy began.

If you’ve kept an inventory list detailing the condition of the rooms and furniture, offer to walk through the property with tenants to make sure that all goods and rooms are up to the standards they were when the property was let initially.

How do landlords return a tenant’s deposit at the end of a tenancy agreement?

When it comes to deposits, landlords are legally required to place them in deposit protection schemes within 30 days of receiving them. Once a tenant leaves a property, landlords have ten days to return deposits to tenants.

If any goods, fixtures or fittings have been damaged by tenants, landlords may be entitled to pay for the necessary repairs using the security deposit. However, landlords must get in touch with tenants within this ten-day period to reach an agreement about how much money will be used to cover repairs and what will be returned to tenants.

If no consensus is reached, the money will remain in the tenancy deposit protection scheme until both parties reach an agreement.

Looking for more landlord tips that could save you time when a tenancy agreement ends? Read AXA’s top ten time-saving tips here.

 

All things come to an end. And regardless if this is the sun setting on a perfect landlord-tenant relationship or one that has been a little more testing, landlords are required to follow tried-and-tested procedures to end tenancy agreements in a way that is legal and does best by both parties.

Crystal clear communication is key to any effective relationship. Tenancy agreements can help landlords upfront about their own and tenants’ rights and responsibilities from the offset, which can prevent disputes when a tenancy draws to an end. For more handy hints to lessen the stress of your landlord life, take a look at our complete guide to being a landlord.

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