Ending a fixed term tenancy, with or without notice?
This guide applies to England, Wales and Northern Ireland only
Tenancy agreements are written to protect both landlords and tenants, making clear the roles and responsibilities for those named in the contract, in relation to the property. The tenancy dates in a contract are all important – they make sure that the tenant clearly knows how long they can make that property their home, and that the landlord knows that their property is being let for a set amount of time, in return for being paid rent.
When a tenancy is nearing the end, the tenant and landlord must consider their options. Will the tenancy end naturally when the contract says it will, or should the landlord and tenant agree to let the contract roll on, usually from month to month, or renew the contract for another set period?
What is the law?
The law is clear – a tenant wishing to leave on, or before the end date in the contract does not have to give the landlord any notice to end the tenancy. The fixed term is what the tenant signed up for and the landlord cannot change this rule or expect rent past the end date, if the tenant has moved out and their rent is fully paid.
There is some misunderstanding over whether a tenancy agreement can add a clause into a contract which expressly tells the tenant to give, often two months’ notice to the landlord, even if the tenant intends to leave when the contract ends. This suggests that the contract can override the law; however, while these clauses do exist and tenants will comply with them because they are unaware of their rights, the fact is that these are unfair and can be successfully challenged.
The rules on unfair terms, sometimes imposed by a ‘trader’ business on a consumer, are defined in the Consumer Rights Act 2015 (the Act). A notice clause is seen as putting an unnecessary responsibility on the tenant which creates a ‘significant imbalance’ under the Act. More information can be seen here in paragraph 62.
Is there any exception to this rule?
The only exception may be where a landlord chooses to individually negotiate a different notice period with the tenant and, if it is reasonable, it may be considered fair. It would depend on the circumstances of the case as to how ‘reasonable’ a clause is.
As you can appreciate, a landlord or agent would need to demonstrate that the clause was specifically agreed with a tenant, clearly explained and reasonable, so it does not put an unfair responsibility on the tenant. If you do include any negotiated clauses, these should be signed separately by the tenant, so it stands out from a standard term.
When does a fixed term tenancy actually end?
The cut off time for the tenant to leave without giving notice is midnight on the final day. If the tenant stays beyond this time, they should be aware that they have entered a periodic tenancy, which will require giving notice and paying rent to the end of that notice.
What is good practice for both landlord and tenant?
Uncertainty over whether a tenant would like to leave or extend a tenancy can be frustrating for landlords and agents who need to know when their tenants are leaving, so they can re-market the property and make appropriate arrangements for check-out inspections and any remedial work needed. This is to try and avoid the property being left empty for longer than necessary.
This puts the responsibility on the landlord, or his managing agent, to find out what the tenant intends to do when the tenancy ends. This is yet another reason why it is good practice for everyone to establish and maintain a good relationship throughout the tenancy.
Use the following best practice guidance to make sure everyone is kept informed:
- When the fixed end date is not too far away, it is a good idea for a landlord, or agent, to ask the tenant what their intentions are for the end date and give them a reasonable date for a reply
- A month or two before the contract is due to end is a good time to contact the tenants and to let them know why it is important for the landlord to know their intentions; that remarketing the property takes time and it will minimise the chance of the property being left empty for a longer period than necessary without rent being paid. This should encourage clarity and understanding on both sides
- Landlords should talk to their tenants about what they would be happy with, for example if they are willing to offer the tenant another tenancy should they want to continue living in the property. This could be a rolling periodic tenancy or a new contract
- Tenants should understand that if they are moving out on the last day of the contract, that they must be out by midnight to avoid the periodic rules coming into play and having to give notice and pay more rent
Although the law is clear that a tenant doesn’t have to give the landlord any notice to end the tenancy (with that one exception), as we’ve seen here, communication is key. To avoid any misunderstandings with tenants and reduce the risk of unnecessary void periods, landlords and agents should check in with the tenants before the end of a fixed term tenancy.
Find out more in our dispute case study – rent in lieu of notice.