Statutory or Contractual Periodic Tenancy?

[Hobgoblin10]

Hi all,

 

Hopefully someone will be able to help with our situation - I seem to be getting so much conflicting advice! Sorry this may turn out to be a long one...

 

I currently live with my husband in a rented house. Our fixed term AST came to an end on 1st August, and as happens every year, the lettings agent pushed for us to renew the tenancy. As we are in the process of buying a house, we requested to move on to a periodic tenancy so we are not tied to a fixed term. After a bit of to-ing and fro-ing the LL agreed to this. All well and good, we thought - however, the agent still demanded a 'renewal' fee for us to move to a periodic tenancy under the same terms as our AST. This we reluctantly paid, which I now realise may have been a mistake.

 

When we have rented before, after the fixed term came to an end, the contract automatically became Statutory Periodic, with us needing to give one rental period notice to leave. We assumed this would be the case with our current tenancy but, now that we are nearing exchange on the house we are buying, the letting agent now says we have to give 2 months notice, as per the terms of our AST. I gather from what I have read that if challenged they will argue that by agreeing to the 'renewal' of our tenancy, and paying the fee, that we have now entered into a Contractual Periodic Tenancy. We were hoping to exchange and complete on our house purchase in September, but if we are held to this 2 month notice period then the earliest we can leave this house is 1st November, meaning a very long crossover period which we would find very difficult to finance.

 

So my question is, have we actually entered into a Contractual Periodic Tenancy? We have not signed anything to say we agreed to the terms the agent set out, nor have we had a new contract. It is just the fact that we paid the agent's fee that is niggling at me, otherwise I believe we have a strong argument for saying we now have a Statutory Periodic Tenancy, in which case we are able to give one month's notice, not two.

 

If in fact we are in a contractual agreement, this is the clause in the original AST to which the agent are trying to hold us:

 

'Tenant's Break Clause:

The Landlord agrees that the Tenant has the right to terminate the Tenancy after the first Twelve Months by giving the Landlord not less than Two Months notice in writing to be sent by first class post or hand delivery to the address specified in the clause 1.1 of this Agreement, to end the Agreement. To avoid any doubt between the parties it is agreed that the notice period cannot commence any earlier than the rent due date of month Ten and cannot expire any earlier than the last day of month Twelve. Such notice must expire at the end of a relevant period, being the day before the Rent normally falls due.

Upon expiry of this notice this Agreement shall cease except that either the Tenant or the Landlord can pursue their legal remedies against the other for any breach of any rights and obligations under the Agreement apart from the right to a fixed term contract which is subject to this break clause.'

 

Can this clause still apply now the fixed term has ended, given that we have not signed a new agreement?

I have been referred to Section 5 of the Housing Act 1988, in particular clause 3e - but I'm not sure it applies in our situation:

 

3. The periodic tenancy referred to in subsection (2) above is one—

(e)under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy.

 

Or, do we now not have a legal leg to stand on after paying the agent's fee? Do we just need to suck it up and either delay completion on the house or pay the agent's Early Release Fee of £558 (no I didn't miss a decimal point!) for them to remarket the property early?

 

Any advice on the above would be very gratefully received from someone with a bit of legal know-how, or has come across this situation before. Sorry for the essay - well done if you're still reading!

 

Many thanks in advance.

[kirkbyinfurnesslad]

How much was the fee you paid to the agent?

[Hobgoblin10]

£89+VAT, I think - my husband paid it and not sure what he did with the receipt.

[kirkbyinfurnesslad]

All for printing of some paper

[mariner51]

As you have not agreed / signed a new contract after end of AST fixed term, a Judge may well conclude you have have a Stat Periodic Tenancy, hence the termination Notice reqd is set out in Statute, not Contract ie must be served by end of 1 T period to expire at end of next relevant T period.

LL prob would not have received any consideration (LA renewal fee) for agreeing a new Contract.

[Steve__M]

In the original contract, how was the fixed term described? Some contracts roll into a "contractual periodic tenancy" using wording like this: "should the tenancy not be determined at the end of such period by either party giving to the other not less than two months notice in writing it shall continue thereafter from month to month until it shall be determined by either party giving to the other not less than two months notice in writing". It is argued that the 2-month requirement for the tenant would then continue (though I don't see why tenant would have to pay a fee).

[Hobgoblin10]

Thanks for the replies.

 

I've just had a flick through the tenancy agreement again.

The break clause I quoted in my original post makes no reference to what happens after the fixed term ends.

In fact, the only reference I can find is in the Definitions section, where it states:

 

2.9 'Term' or 'Tenancy' includes any extension or continuation of the contractual Tenancy or any statutory periodic tenancy arising after the expiry of the original Term.

 

I guess as the agreement doesn't clearly stipulate what happens when the fixed period ends then the agent/LL don't have a leg to stand on trying to enforce this 2 month notice period.

 

Either way, I'm handing in one month's notice tomorrow and will await their protest! We're definitely completing on our house purchase during September, so will be out of here by 1st October. If they want to pursue us for October's rent they'll have to try and take it out of our deposit!

 

Any other reassurance that we're doing the right thing would be greatly appreciated. I have read plenty of threads online about similar situations but, annoyingly, they're never updated with the outcome. I hereby promise to update this thread when this is resolved!

[raydetinu]

If it is a SPT, which by definition is on a month by month basis, you therefore only need to give one clear months notice from a payment period.

[Steve__M]

From what you say, I suggest you stick to your guns.