Question: AST and Memorandum of Agreement

zas31

(It would be fair to start a new thread)

The following link mentions that "[FONT=Verdana, Arial, Helvetica, sans-serif]Memorandum of Agreement may be entered into by both parties, on statutory periodic tenancy."[/FONT]

http://www.futurelet.com/forlandlords.php

Another source that references s5(5) says the 6-month rule won't apply to the extension.

http://www.landlordzone.co.uk/forums/showthread.php?27444-Memorandum-of-agreement

My LA wants me to sign a Memorandum for a new fixed-term tenancy with the 6-month break. Is this still in line with the 1988 Act?

N79

I'm sorry but I have no idea what you are talking about. Perhaps you could rewind and add a little more background to your question?

DVardysShadow

N79 wrote: »

I'm sorry but I have no idea what you are talking about. Perhaps you could rewind and add a little more background to your question?

Previous thread https://forums.moneysavingexpert.com/discussion/4021925

DVardysShadow

zas31 wrote: »

(It would be fair to start a new thread)

The following link mentions that "[FONT=Verdana, Arial, Helvetica, sans-serif]Memorandum of Agreement may be entered into by both parties, on statutory periodic tenancy."[/FONT]

http://www.futurelet.com/forlandlords.php

Another source that references s5(5) says the 6-month rule won't apply to the extension.

http://www.landlordzone.co.uk/forums/showthread.php?27444-Memorandum-of-agreement

My LA wants me to sign a Memorandum for a new fixed-term tenancy with the 6-month break. Is this still in line with the 1988 Act?

The first is a letting agent's site, so don't expect it to be free of bias

Both Tenant and Landlord are committed to a specific period of time, as stated in the Tenancy Agreement. If it is a six-month tenancy then either the Tenant or the Landlord can give a notice no earlier than the four-month stage, unless agreed by the Tenant and the Landlord. If it is a twelve month contract then two months notice can be given at any time after the initial four months by the Tenant, and two clear rental months notice by the Landlord, unless the Tenancy is for an agreed fixed period. Two months prior to the end of the Tenancy Agreement a Notice for Possession is issued, which states possession of the property is required.

This agent is operating along the lines that they do not seem to concede to a Statutory Periodic Tenancy arising except for this

[FONT=Verdana, Arial, Helvetica, sans-serif]If, once the original term has ended, a continuation is required by the Landlord and the Tenant, then further agreements are drawn up - to commence when the previous tenancy ends. Alternatively, a Memorandum of Agreement may be entered into by both parties, on statutory periodic tenancy. [/FONT]

where they seem to be staking a claim to a fee for the tenancy going Statutory Periodic.

When you look at the second link, the MoA is a quite legitimate means of extending a tenancy based on the original AST contract - and is quite a normal way of extending any general service contract. BUT it is completely superfluous, because the relevant Act of Parliament [forget which off the top of my head] already defines rights when a tenancy extends beyond the fixed term - the so called Statutory Periodic Tenancy.

A Statutory Periodic Tenancy arises by default if the tenant remains in the property a day beyond the original fixed term. In such a case, all of the terms of the previous AST remain in place, save that notice is 1 full month from the tenant and 2 full months from the Landlord, either to terminated at the end of a rental period.

In fact the linked MoA is identical to a Statutory Periodic Tenancy, save that [1] a rent increase is incorporated [this could be done with a Statutory Periodic Tenancy by means of a Section 13[?] notice - and probably by serving notices correctly, right from the outset of the Statutory Periodic Tenancy and [2] due to poor drafting [?] it appears that provided 1 or 2 full month's notice as appropriate] is given, the notice can expire anywhere in a rental period.

If the MoA is used, this makes a Contractual Periodic Tenancy instead of a Statutory Periodic. About the only advantage in it is that the Agent gets to claim a fat fee for doing nothing.

Personally, I would not sign the MoA but go Statutory Periodic and if a rent rise was negotiated, I would address it by exchange of correspondence ["You write to advise of the new rent we have agreed and I will write back to confirm"

zas31

DVardysShadow wrote: »

BUT it is completely superfluous, because the relevant Act of Parliament [forget which off the top of my head] already defines rights when a tenancy extends beyond the fixed term - the so called Statutory Periodic Tenancy.

Thank you, that's very helpful. Can the Tenant refuse signing the MoA and opt for Statutory Periodic Tenancy, and is there much point of prefering one to the other?

DVardysShadow

You can refuse to sign a MoA and at the appropriate point, you will go Statutory Periodic. There is no advantage for the LL or the Tenant of a MoA over going SP. The only party to benefit is the Agent if he extorts a fat fee.

You might get a S21 Notice to Quit as a reward

jjlandlord

In OP's case the "Memorandum of Agreement" is just a new tenancy agreement, imo.

On the site linked to above it seems to me that it is meant as a useless document that the agent intends to draw when a statutory periodic tenancy is created... Cynically, I'd say so as to be able to extract fees.

In any case, the tenant is always free to refuse to agree to any new contract.
But he should remember that there is no security of tenure in a statutory periodic tenancy.

zas31

DVardysShadow wrote: »

The only party to benefit is the Agent if he extorts a fat fee.

£90. Not the end of the world.

zas31

jjlandlord wrote: »

But he[=tenant] should remember that there is no security of tenure in a statutory periodic tenancy.

Would the new contract/tenancy under MoA give the Tenant more security? Thought LL can always ask the Tenant to leave with a 2-month notice.

zas31

DVardysShadow wrote: »

Personally, I would not sign the MoA but go Statutory Periodic and if a rent rise was negotiated, I would address it by exchange of correspondence

Thank you. How would an overseas LL be able to evaluate the rental potential that the property can achieve. Seriously, would it not be a number that LA pulls out of thin air? If so I will need to tell them to put their money where their mouth is: the market is turning from being the LL market to a tenant's market according to KnightFrank report.

DVardysShadow

zas31 wrote: »

£90. Not the end of the world.

Over 6 months, that is £15/month towards increased rent

zas31 wrote: »

Would the new contract/tenancy under MoA give the Tenant more security? Thought LL can always ask the Tenant to leave with a 2-month notice.

/goes back to edit earlier post/

It all depends what the MoA says. But it won't be 'worse' than an SPT - you get that by default.