Once a former tenant remains in occupation of a property after the expiration of a contracted out lease has expired, the situation on their status can become complicated. If the landlord fails to act in these circumstances, or takes rent from the tenant past the expiration date, then the continued occupation of the premises is likely to result in either a Tenancy at Will or a Periodic Tenancy.
The courts will look at the intentions of the parties, whether rent was paid, as well as whether the parties are negotiating new terms in the lease (and which terms these are) to determine which type of tenancy has been created. Here we discuss the implications of this scenario and what it means for the landlord and tenant. It is a complicated area of law, and it is therefore always advisable that you take specialist expert advice if you are in this situation so that your particular circumstances can be taken into account to resolve the situation in the best way possible.
Tenancy at Will
A Tenancy at Will can be created expressly or by the parties’ conduct that infers this as their intention. Tenancies at Will are created where the tenancy is based on terms that either party can terminate at any given time. This type of tenancy does not provide the tenant with any right to lease renewal under the Landlord and Tenant Act 1954.
The courts will look at various factors in determining whether a Tenancy at Will has been formed once the tenant remains in occupation after the expiry of a contracted out lease. The courts will examine the conduct of both the landlord and the tenant to determine whether there is an inferred Tenancy at Will now in place. Looking primarily at the conduct of the landlord; the court will examine whether this shows an intention to recover possession of the relevant property. If the landlord's conduct does suggest an intention to recover, then it is unlikely that a court would conclude that their intention was to create a new tenancy. Landlords, therefore, should be careful where a former tenant remains in possession after the lease has expired to show pro-active efforts to regain possession and not act complacent to their occupation.
The court will also look at the following aspects, and if these exist then the court can decide that a new tenancy has not been created (a periodic tenancy) and that this is a Tenancy at Will:
- Whether any rent accepted by the landlord was due to a mistake of fact.
- Whether any rent accepted by the landlord was due to a mistake by the landlord’s agent.
- Whether the demands for rent were generated and issued automatically.
- Whether the rent demands were computer generated.
- If there are any ongoing negotiations in relation to a new lease.
A Tenancy at Will can be terminated without notice. One party must give notice to the other party (for example a formal written notice of intention to terminate or the demand from the tenant for keys to be returned). A Tenancy at Will does not have a time period for termination, although the tenant has to be allowed a reasonable period of time to remove their possessions. Where a tenant fails to leave the premises, then the landlord can commence possession proceedings and re-enter the property to change the locks.
Periodic Tenancy
A Periodic Tenancy arises where there is a landlord and tenant relationship and can be created by either express agreement or by implication. Rent must be demanded and paid by reference to a particular period and without any ongoing negotiations relating to a new lease. The tenant, therefore, can have Security of Tenure under the Landlord and Tenant Act 1954. Where a periodic tenancy with statutory protection is formed, and then a new lease is entered into, this will be viewed as surrendering the protected tenancy and the contractual terms. The courts will generally determine that a Periodic Tenancy has been created where there is the acceptance of rent and no ongoing negotiations.
Ending a Periodic Tenancy is harder than ending a Tenancy at Will since the tenant is likely to have Security of Tenure under the Landlord and Tenant Act 1954. This means that the tenant has a legal right to remain at the property and so the landlord would have to serve a Section 25 Notice as well as Notice to Quit to terminate the Periodic Tenancy. A Periodic Tenancy gives rise to an automatic right of renewal, even if the tenant did not have these rights under the original lease, and it can be very difficult for the landlord to regain possession of the property.
Practical Guidance
Allowing either of these tenancies to arise has implications for both the landlord and the tenant. It is therefore much better to enter into discussions at least six months before the end of the tenancy to determine both parties’ intentions and whether negotiations over new terms are needed. If the tenant is uncertain as to whether or not they wish to remain after the expiry of the lease, the landlord should ensure they demand possession in writing some months before the expiry of the lease since this is likely to be taken into account by the court when determining whether or not a Periodic Tenancy has been created. It is possible to use lawyers to create a Tenancy at Will to prevent a Periodic Tenancy being implied where the situation regarding the tenant is not clear. It is also advisable where there is uncertainty to put a rent stop in place immediately after the expiry of the lease to prevent the creation of a Periodic Tenancy. This may seem like a difficult option for a landlord, but it does not prevent the landlord from recovering damages in lieu of rent retrospectively before the completion of the new lease.
Contact our Property Lawyers in London
Determining the effect of a tenant remaining in occupation of a property after the expiration of a contracted out lease can be very complicated and depends on the facts of each specific case. Our specialist property lawyers can advise and guide you on your individual circumstances and discuss the options that are available to you.
At Lewis Nedas, our team of Property Litigation Solicitors have broad experience in both commercial and residential property litigation. We have successfully advised clients with highly complex and multi-faceted cases. To speak with one of our Property Lawyers today, please contact us on 020 3811 4646 or complete our online enquiry form.
The courts will look at the intentions of the parties, whether rent was paid, as well as whether the parties are negotiating new terms in the lease (and which terms these are) to determine which type of tenancy has been created. Here we discuss the implications of this scenario and what it means for the landlord and tenant. It is a complicated area of law, and it is therefore always advisable that you take specialist expert advice if you are in this situation so that your particular circumstances can be taken into account to resolve the situation in the best way possible.
Tenancy at Will
A Tenancy at Will can be created expressly or by the parties’ conduct that infers this as their intention. Tenancies at Will are created where the tenancy is based on terms that either party can terminate at any given time. This type of tenancy does not provide the tenant with any right to lease renewal under the Landlord and Tenant Act 1954.
The courts will look at various factors in determining whether a Tenancy at Will has been formed once the tenant remains in occupation after the expiry of a contracted out lease. The courts will examine the conduct of both the landlord and the tenant to determine whether there is an inferred Tenancy at Will now in place. Looking primarily at the conduct of the landlord; the court will examine whether this shows an intention to recover possession of the relevant property. If the landlord's conduct does suggest an intention to recover, then it is unlikely that a court would conclude that their intention was to create a new tenancy. Landlords, therefore, should be careful where a former tenant remains in possession after the lease has expired to show pro-active efforts to regain possession and not act complacent to their occupation.
The court will also look at the following aspects, and if these exist then the court can decide that a new tenancy has not been created (a periodic tenancy) and that this is a Tenancy at Will:
- Whether any rent accepted by the landlord was due to a mistake of fact.
- Whether any rent accepted by the landlord was due to a mistake by the landlord’s agent.
- Whether the demands for rent were generated and issued automatically.
- Whether the rent demands were computer generated.
- If there are any ongoing negotiations in relation to a new lease.
A Tenancy at Will can be terminated without notice. One party must give notice to the other party (for example a formal written notice of intention to terminate or the demand from the tenant for keys to be returned). A Tenancy at Will does not have a time period for termination, although the tenant has to be allowed a reasonable period of time to remove their possessions. Where a tenant fails to leave the premises, then the landlord can commence possession proceedings and re-enter the property to change the locks.
Periodic Tenancy
A Periodic Tenancy arises where there is a landlord and tenant relationship and can be created by either express agreement or by implication. Rent must be demanded and paid by reference to a particular period and without any ongoing negotiations relating to a new lease. The tenant, therefore, can have Security of Tenure under the Landlord and Tenant Act 1954. Where a periodic tenancy with statutory protection is formed, and then a new lease is entered into, this will be viewed as surrendering the protected tenancy and the contractual terms. The courts will generally determine that a Periodic Tenancy has been created where there is the acceptance of rent and no ongoing negotiations.
Ending a Periodic Tenancy is harder than ending a Tenancy at Will since the tenant is likely to have Security of Tenure under the Landlord and Tenant Act 1954. This means that the tenant has a legal right to remain at the property and so the landlord would have to serve a Section 25 Notice as well as Notice to Quit to terminate the Periodic Tenancy. A Periodic Tenancy gives rise to an automatic right of renewal, even if the tenant did not have these rights under the original lease, and it can be very difficult for the landlord to regain possession of the property.
Practical Guidance
Allowing either of these tenancies to arise has implications for both the landlord and the tenant. It is therefore much better to enter into discussions at least six months before the end of the tenancy to determine both parties’ intentions and whether negotiations over new terms are needed. If the tenant is uncertain as to whether or not they wish to remain after the expiry of the lease, the landlord should ensure they demand possession in writing some months before the expiry of the lease since this is likely to be taken into account by the court when determining whether or not a Periodic Tenancy has been created. It is possible to use lawyers to create a Tenancy at Will to prevent a Periodic Tenancy being implied where the situation regarding the tenant is not clear. It is also advisable where there is uncertainty to put a rent stop in place immediately after the expiry of the lease to prevent the creation of a Periodic Tenancy. This may seem like a difficult option for a landlord, but it does not prevent the landlord from recovering damages in lieu of rent retrospectively before the completion of the new lease.
Contact our Property Lawyers in London
Determining the effect of a tenant remaining in occupation of a property after the expiration of a contracted out lease can be very complicated and depends on the facts of each specific case. Our specialist property lawyers can advise and guide you on your individual circumstances and discuss the options that are available to you.
At Lewis Nedas, our team of Property Litigation Solicitors have broad experience in both commercial and residential property litigation. We have successfully advised clients with highly complex and multi-faceted cases. To speak with one of our Property Lawyers today, please contact us on 020 3811 4646 or complete our online enquiry formonline enquiry form.
