Balancing The Pros And Cons On Fixed Terms

It’s a tricky balancing act, but try to work these fixed terms to your advantage if you can (it isn’t always easy though, some landlords/agents have very resolute policies on these matters). Students for example might do well to try negotiating a nine-month lease for their academic year. Many agents will refuse longer initial fixed terms than six months, simply because insisting on a shorter lease gives them the opportunity to offer either a whole new lease or some other dandy thing that agents call a lease extension fee – and again charge you for the privilege of staying on a while longer. Nice work if you can get it.

Final Clarification

Because this is the most likely option you’ll get as a modern tenant, let’s run through it again.

• This fixed term is the legal length of time that ties you and your landlord/agent together into a binding contract.
• You agree to pay rent for the whole of that time and keep the lease terms, in return for which you get some security of tenure.
• The longer the fixed term, the longer your security and the length of time that you’re legally responsible for the rent.
• The shorter the fixed term the shorter your rent obligations and your greatest level of security.
• If you want to leave before your fixed term expires, unless your landlord agrees to end your tenancy (and a surprising number of independent landlords will if, say, work demands a relocation that’s beyond your control), you will remain liable for the rent for the remainder of that agreed fixed term – unless or until your landlord/agent finds a suitable replacement tenant.

Periodic Or Contractual Period Tenancy

Assured shorthold leases can also be run as periodic or contractual periodic tenancies (which don’t have any fixed term). Basically, these leases run on a month by month basis, meaning that tenants aren’t contractually bound into them from the start for any fixed period of time. Meaning also that these types of leases are rare. Tenants who don’t have fixed terms still enjoy that same six months relative security before the landlord has any guarantee of possession. Therefore these arrangements simply don’t balance up. Tenants get security of tenure for six months, while landlords don’t get an undertaking on rent for the same period of time.

Periodic tenancies give landlord/agent a slightly wider range of options on possession at an earlier stage. They suit (in some cases) tenants who have no intention of staying long – but every time the landlord agrees to this, s/he’s running a risk on guaranteed possession without guaranteed rent for the same timeframe. This tends to be a ‘top end’ option – used for the business classes rather than the majority of tenants who are looking for homes.

What Happens At The End Of The Initial Fixed Term?

As usual, one of several things can happen. These are the most likely scenarios, assuming that you are happy to stay on and your landlord/ agent has no concern about you doing so.

Option 1

Your landlord/agent approaches you and offers another brand new lease with another fixed term. This ties both of you back to broadly where you started. Landlords can’t get guaranteed possession until a new fixed term (or another six months) has expired and tenants are obliged to pay rent for another whole fixed term.

Sometimes it’s done this way to incorporate a change in terms that wasn’t written into the old lease. For example a rent increase will appear with the new lease. It’s always up to you as a tenant to decide whether or not to agree to sign a new lease. Of course, declining new terms means finding somewhere else to live. Try negotiating on unexpected rent increases, especially where they come along in under a year. Good tenants with good track records can often trigger a change of heart. But if the management insists that new terms are the only ones on offer you either accept and sign or give notice to leave and find somewhere else.