How To Renew A Tenancy Agreement?

When it comes to renewing a tenancy agreement, there are some important aspects that you need to consider. If you are a tenant or landlord, it is important that you know your rights as well as what you need to do when the tenancy contract comes to an end.
In England, according to Housing Act 1988, if a landlord (or estate agency) does not renew the tenant agreement contract before its end date, then the terms and conditions previously signed off by both parties will still apply.

This means that the expired tenancy agreement will continue to be used as a reference for the roles and responsibilities for tenants and landlords. This mechanism is known as a “rolling basis contract” and it can just be used after the initial contract expires. It works as if your contract is being renewed every time you pay your rent (which can be weekly or monthly).

There are advantages and disadvantages by following this route. The main advantage for both sides (landlord and tenant) is that they do not need to sign anything or do any new paperwork. From a landlord perspective, this “do nothing” attitude, based on Housing Act 1988, can actually save some money with state agents who may want to intermediate the deal.

The downside to it is that, if the landlords receive a leaving notice from their tenants, then the landlords will need to put the property back on the rental market and negotiate rates with different estate agents. As a consequence, the landlord may lose months or weeks of rent until finding new tenants (and of course, face new fees from estate agencies on advertising, following paperwork checks when a potential tenant appears).

From a tenant’s point of view, the advantage of “do nothing” when it comes to renewing the contract benefits them as they will be on a rolling contract instead of a signed contract for a specific period of time. This means that they can give their landlords leaving notice at any time. Normally, tenants will seek not to renew their contract as they do not want to tie up themselves into a new agreement.

So how to renew a tenancy agreement if that is what you want?

First of all, you will need to give your tenant a new agreement. If you want to increase the rent this is the best moment to do so (remember that with a rolling contract you as a landlord will have to negotiate a rent increase directly with the tenant, who has the right to disagree).

Also, if you are looking at renewing the tenancy agreement make sure that if there are terms that you want to change (such as no pets, no smoking, or no subletting, etc.), make sure they are in. You can demand that your tenants need insurance to landlords belonging and you can impose responsibilities and penalties to your tenants, such as late payments, cleanliness of the place, etc.

One thing that is important to remember is that if you are renewing a tenancy agreement, make sure you have an estate agency behind it as they will be the witness in case you have a bad tenant and need to take them to court for eviction. You should not make amendments on separate papers. You need to make sure that everything that is agreed verbally is in the agreement.
Once the new tenancy agreement is written and everyone is happy with it, then both parties involved should sign (so there is no room for argument).

You need to remember that letting agencies usually require a fee to process new agreements. It is worth paying that fee as they are specialists. Renewing the tenancy agreement for a fixed-term gives landlords and tenants the security for coming months, from a landlord perspective the security of income, and for a tenant the security of a place to live (as a landlord cannot evict a tenant until the contract lease, unless rent is not paid).

As you can see, there are more advantages for tenants and landlords when they both agree to renew the tenancy agreement.