Assured Shorthold Tenancy vs Fixed Term

Jami74

We have been contacted by the letting agents saying that our landlord wants us to change to a fixed term contract. Apparently this will be beneficial to both us (the tenants) and the landlord. We have lived here for 16 years and I am wondering why the landlord wants to change it now. I am awaiting for a copy of the agreement to be sent which I will read carefully, is there anything in particular that I should be looking out for?

canaldumidi

I'm assuming you currently have a periodic AST (monthly rolling? weekly? quarterly?), and the LL wants you to sign a new fixed term AST (for 6 months? a year? 2 years?).

Perhaps if you give more details of your current AST, and the proposed new AST, we can help more.

But you cannot be forced to sign a fixed term contract against your will. It gives you potentially more security (for the Term of the fix), but may introduce clauses you don't like in the contract, so read it carfully.

Now read post 1 here:

https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants/p1

and

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

diystarter7

When does your fixed-term come to end?
Re AST, LL does not have to renew once that comes to an end and nor are you under any obligation to stay once both sides have followed the notice period processes.

theartfullodger

Suspect landlord or agent realise there's a problem with the paperwork which means they can't evict you (if you keep paying the rent).

I doubt it is long-term of any benefit to tenants.

Artful:. Landlord since 2000

Jami74

canaldumidi said:

I'm assuming you currently have a periodic AST (monthly rolling? weekly? quarterly?), and the LL wants you to sign a new fixed term AST (for 6 months? a year? 2 years?).

Perhaps if you give more details of your current AST, and the proposed new AST, we can help more.

But you cannot be forced to sign a fixed term contract against your will. It gives you potentially more security (for the Term of the fix), but may introduce clauses you don't like in the contract, so read it carefully.

Thank-you very much for replying. The tenancy (started in 2006) was initially 6 month AST and then moved on to a monthly rolling contract. We need to give one months notice and they need to give us two months notice. 

We haven't seen the new contract yet. The letting agent literally emailed to say they wanted to let us know that the landlord wants us on a fixed term tenancy (doesn't specify how long for) "The reason for this is because tenancy agreements changed over time and clauses need updating for both the tenant and the landlord so this is an exercise that is beneficial for you both." And of course a rent increase of £100 a month from when the new agreement starts. It says that they'll email the new contract shortly and to follow the online instructions. 

I am very nervous. While the house might be old with (in my opinion only) inadequate heating and insulation, it is the home that I have raised my children in. I've got a feeling that when we do finally move out the landlord will put central heating in and at the least a new kitchen before reletting for more money. 

Jami74

theartfullodger said:

Suspect landlord or agent realise there's a problem with the paperwork which means they can't evict you (if you keep paying the rent).

I doubt it is long-term of any benefit to tenants.

Thanks for your honesty. We have never missed a rent payment in 16 years. We try to be as low maintenance as possible because we don't want to be evicted. Do you think the landlord has reason to think we might start? I'm really wondering why after this long the landlord would want more security. Our current contract states the landlord needs to give us 2 months notice to leave.

MaryNB

Jami74 said:

theartfullodger said:

Suspect landlord or agent realise there's a problem with the paperwork which means they can't evict you (if you keep paying the rent).

I doubt it is long-term of any benefit to tenants.

Thanks for your honesty. We have never missed a rent payment in 16 years. We try to be as low maintenance as possible because we don't want to be evicted. Do you think the landlord has reason to think we might start? I'm really wondering why after this long the landlord would want more security. Our current contract states the landlord needs to give us 2 months notice to leave.

The law says they have to issue an S21 (2 month notice period) to start the process of ending the tenancy but it doesn't mean you have to leave after 2 months. It just means at the end of the 2 months the landlord can then apply for the court for an eviction order which will take several more months, during which time your right to live at the property remains intact. Only you or a court order can end the tenancy.

TripleH

In our last rental property the letting agent 'forgot' to fill in the number of months the fixed period was for so the contract I received and signed said we has a 1 month fixed period.

3 months in they began trying to browse beat me into signing a new contract giving different reasons each time as to why we needed to sign. The landlord was unaware of any of this.

By then we were looking to buy so had no intention of signing a new contract especially not to fix the letting agent's mistake /extra fee generating exercise.

This sounds as much a way to get more fees out of the landlord as anything. If you have doubts ask the landlord direct?

canaldumidi

As suggested by TripleH, this might simply be a way for the agent to charge the landlord a fee for a new contract. Or the LL might genuinely prefer you on a fixed term. Who knows?

The reason given ("tenancy agreements changed over time and clauses need updating") is rubbish. Yes, tenancy law changes (eg LL now has to provide an electrical report every 5 years, and might want to add a clause allowing access for this) but it's unneccessary as... it's statute law which over-rides anything in a contract anyway.

Artful suggested they might have failed to comply with some requirement originally (deposit not protected, no gas report at the start, meaning any S21 would fail and you could not be evicted). By signing a new tenancy agreement and serving the proper paperwork with it, the LL/agent might be hoping to correct this. They'd be wrong. The tenancy still started in 2006 so any failure at that time would still be a failure allowing you to challange a S21 Notice.

If your current contract requires 2 months notice by the LL, this could not be shortened. As Mary says a S21 requires 2 months, followed by a (currently long) wait for a court date. Possibly the LL/agent wants to increase your own notice period from 1 to 2 months, which they could do. If you plan to leave that might be a problem, but then again if you plan to leave you won't want to commit to a fixed term anyway!

I should wait and see what the new contract says and then

* if in doubt, quote relevant clauses here for advice

* if it offers you long term security and (you want long term security) eg 12 or 24 months, then agree

* if you might want to leave, don't agree

* if you don't like the contract due to clauses or length of fixed term, then politely thank the LL/agent for the draft contract but "having considered it carefully I am happy to maintain my current periodic tenancy".

Re the rent increase, you will need to consider this

* if you agree the rent is low (compared to similar properties locally you could couldpotentially move to), then perhaps offer a compromise eg suggest an increase of £50 (25, whatever) instead of £100 and see what they say

* if you DO agree an increase, you still don't need to sign the fixed term contract - you can remain on your periodic tenancy but simply agree a new rent

* Bear in mind if you don't sign a FT contract, the LL/agent can serve you either

a) a S21 Notice to start eviction process (see above). However, this costs the LL money (void between tenants, risk of unreliable tenant, agency fees etc) and is usually not wise where there is a reliable, rent-paying tenant. However agents benefit and might be influencing the LL. The agent makes money finding a new tenant!

b) a S13 Notice to raise the rent. See link below:

Post 5: Rent increases: when & how can rent be increased?

fwor

Flooreokesa said:

Hi guys! Thank you!!

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Jami74

MaryNB said:

The law says they have to issue an S21 (2 month notice period) to start the process of ending the tenancy but it doesn't mean you have to leave after 2 months. It just means at the end of the 2 months the landlord can then apply for the court for an eviction order which will take several more months, during which time your right to live at the property remains intact. Only you or a court order can end the tenancy.

Thanks, but wouldn't it be harder to find a new property to rent if you'd caused such problems for your previous landlord? Unfortunately not yet in a position to buy so if we had to move it would likely be to another rented property.