What is a Statutory Periodic Tenancy? A Surrey Landlord Guide

Do you know what a statutory periodic tenancy is, and how it differs from a contractual periodic tenancy? While it may not seem obvious at first glance, there can be implications down the line.

If your tenants are happily renting your cottage in sought-after Bookham or Thames Ditton, it’s easy to imagine they will want to stay on under a periodic tenancy. As a landlord, this can work perfectly and save you the trouble and costs of marketing the property afresh.

But you may want to pause a moment and find out whether there’s already provision in the tenancy agreement for this situation.

Read our essential guide for landlords, as we break down what a statutory periodic tenancy agreement is – and why it matters.

What is a statutory periodic tenancy?

A statutory periodic tenancy and contractual periodic tenancy both run from week to week, or month to month, on a rolling basis as established in the original contract. However, they’re not interchangeable.

1. Contractual periodic tenancy

A contractual periodic tenancy is written into the tenancy agreement as a continuation after the fixed term ends. It’s treated as part of the same tenancy, and landlords don’t have to carry out any additional paperwork – it’s business as usual.

2. Statutory periodic tenancy

Statutory periodic tenancies come into effect if the tenancy agreement doesn’t specify what happens after the fixed term comes to an end. While it usually assumes the same rent payment schedule, it is actually considered a new tenancy.

This means you have to issue legally required documents such as the How to rent guide, EPC, gas safety certificate, EICR and prescribed information relating to the deposit protection scheme. You should also follow the legislation covering new tenancies, which may not have been rolled out to existing tenancies yet.

What happens when a fixed term tenancy ends?

If a fixed term tenancy agreement comes to an end it becomes a statutory periodic tenancy if set out in the contract. When fixed terms end with no specified plan, the tenants can still continue living in the property under a new tenancy agreement under Section 5 of the Housing Act 1988. This is a statutory periodic tenancy.

Pros & cons of periodic tenancies

There are advantages and disadvantages for the landlord and tenant on a periodic tenancy, in comparison with a fixed-term tenancy agreement.

Pros of periodic tenancies

• Rent increases can be less complicated
• Long-term tenants will be happy to stay on
• Some tenants value the flexibility
• The eviction process can be simpler
• Landlords can raise the rent with a Section 13 notice

Cons of periodic tenancies

• Less certainty of how long tenants will remain in the property
• Tenants may also feel less secure
• Section 13 rent increases are restricted to once in 12 months

What notice period is required for a periodic tenancy?

The notice period for contractual periodic tenancies is stated in the tenancy agreement. If you are serving a Section 21 notice, you will need to give 2 months’ notice, or equivalent to one rental period if you receive rental income every 3 months or every 6 months. However, if you wish to serve a Section 21 notice to evict tenants on a statutory periodic tenancy, you are only bound to give 2 months’ notice.

How will the Renters’ Rights Bill change fixed & periodic tenancies?

Changes are in the works when it comes to the periodic tenancies. Under the Renters’ Right Bill, fixed-term tenancies are expected to be abolished and all tenancies would become periodic tenancies. However, these will also be updated. It’s expected that new and existing tenancies would be brought into the new periodic tenancy framework in one movement.

The reasoning behind this is to provide greater security for tenants. On a related note, the eviction system is also due for an overhaul. The government is keen to abolish Section 21 evictions or ‘no fault’ evictions, and update the rules for Section 8 evictions.

Under the new system, landlords would be granted expanded mandatory grounds for repossession of the property, for instance, to move in themselves for personal or financial reasons, or to sell it. Tenants would be able to leave the tenancy agreement with 2 months’ notice. These overhauls are still in the works, but it is well worth keeping up to date.

Explore our other guides for landlords covering topics such as whether to let your property furnished or unfurnished or when you have to pay council tax on a property.

Understand statutory periodic tenancies?

If you need guidance about renting out your property in Hinchley Wood, Claygate or nearby areas of Surrey, speak to Davies Property Partners. We can offer landlords a personalised approach, drawing on our wealth of expertise in the local rental market.