Waterlooville Landlords: To Renew Or Not To Renew?
When you get a new tenant the most common tenancy term is a 12 month with a 6 month break clause. This means the tenants are guaranteed a fixed term in the property where they are legally obligated to pay the rent, notice can't be served to break the agreement during the fixed term and the rent can't be increased.
Before the initial term expires the Letting Agent will contact the Landlord to discuss the option to renew the contract or leave the Tenancy to continue on what is called a contractual periodic, often referred to as a month by month rolling contract.
NB. Before allowing a tenancy to continue on a contractual periodic make sure the existing tenancy agreement allows for this otherwise the tenancy by default with be a statutory periodic and this means the Landlord becomes responsible to pay the council tax on the property.
A month by month rolling contract (contractual or statutory) periodic allows the tenants to give 1 months' notice to the Landlord/Letting Agent to break the contract and the Landlord/Letting Agent need to give 2 months' notice to the tenants.
Like everything there are pro's and con's and your Letting Agents should guide you to the best decision for your situation rather than just thinking of the fee they can obtain for the renewal.
Pro's of renewing:
Security of tenure especially over those winter months when properties are harder to rent
Updated tenancy agreement with all the new legislation
Can review the rent annually
Con's on renewing:
If tenants fall into rent arrears a Section 8 using grounds 8, 10 & 11 needs to be used instead of a section 21 which doesn't require a reason for the notice
If for any reason you suspect you will need the property to live in or sell in the very distant future do not renew and provide the tenants with a new fixed term agreement
With the tenant fee ban now in force it will be interesting to see if more Letting Agents let tenancies roll periodically because they deem it too much work for the renewal fee. Time will tell!