Residential property management Tips - Changes to Fixed term tenancy rules
Since 2010 there has been an important change to the way fixed term tenancies work.
It is very important to understand this, to prevent expensive losses and significant inconvenience.
Once you know the rules, and how to apply them, you can eliminate these risks.
You must confirm what is happening at the end of a fixed term tenancy at least 21 days before it is due to end. It is the same whether the tenancy is being extended, or whether the tenants are moving out. This process should always be completed in writing.
If you forget, are on holiday, or dealing with other things, and there is no confirmation then the tenancy will automatically become a periodic tenancy at the end of the term.
We have robust systems in place to make sure this doesn’t happen. We start contacting tenants about 2 months before the end of the fixed term. We write to the tenant and ask them to respond in writing with their intent.
We advise the tenant that if an extension is not confirmed by 21 days before the end of the fixed term, then we will assume the tenancy will end. We follow up repeatedly as needed.
We then get signed agreement for any extension or we send written notice that the tenancy will end on the final date, with instructions for final payments and cleaning.
If the process is not followed correctly two things can happen. Firstly the tenant can just leave at the end of the tenancy without further notice. Or if they decide to stay with your agreement, they can then leave at any time with 21 days notice. This could be expensive for you as it forces a quick re-let at any time of the year.
If you want them to leave you have to give them 42 or even 90 days notice to vacate. This could be very inconvenient if you had other plans for the property.
See you next time.