Ending a tenancy agreement early
According to a Housing Survey published by the Department for Levelling Up, Housing & Communities, 4.4 million households were living in the private rented sector in 2020 to 2021. This constitutes 19% of the population of the UK.
Tenancy agreements are popular because they can be flexible and adaptable. Short of outright ownership, having an assured shorthand tenancy agreement provides tenants with a good deal of rights and security.
There are several reasons why a tenant or a landlord might want to end a tenancy agreement early. For example, the tenant might have secured a job outside the UK, or the landlord may wish to move into the rented property for their own personal use.
Because the housing market is heavily regulated, there are certain procedures that must be followed to bring a tenancy agreement to an end early. Different types of tenancy agreements call for different procedures.
It is important that both landlords and tenants be aware of these, because of the implications attached to failing to end the tenancy legally. For the tenant, these implications include continued liability for paying rent even after vacating the property. For the landlord, failing to effect a legal eviction can result in legal proceedings brought by the tenant or in a very drawn-out and contested eviction process.
How to end a fixed term tenancy agreement
A fixed term agreement is agreed for a specified period of time. For example, if a tenancy agreement states that it runs from January to December of 2022, this is a one-year fixed term tenancy agreement.
Because the obligations set out in this type of tenancy (e.g. to pay rent) are legally binding for the entire fixed term tenancy, it is especially important that the parties reach a clear and mutual decision to end the tenancy early. The parties should also make sure to document this agreement to the fullest extent possible and to follow any termination procedure set out in the tenancy agreement, if applicable. Otherwise, the tenant may continue to be liable for rent until the end of the fixed term.
If the tenant or the landlord wants to end the tenancy agreement early, the contract should be reviewed carefully. The contract may contain a clause that sets out a procedure that will allow either party to end the tenancy agreement before the end of the fixed term. This is known as a break clause.
The break clause will set out exactly what kind of notice period applies, how much notice is to be served by either party and the terms that apply. For example, the break clause might set out that notice cannot be served under its stipulations before the first six months of the tenancy agreement.
If a break clause is triggered and notice is served by either party, then this constitutes a contractual right to end the tenancy early. At the end of the notice period, the tenant must vacate the property and hand back the keys in line with the tenancy agreement.
If the tenant's or the landlord's circumstances are such that they are not in a position to serve the exact notice set out by the break clause, they can reach a mutual agreement to end the tenancy early. It is best practice to get this agreement in writing.
Ending your fixed term tenancy early if you don't have a break clause
The process is more complicated if the fixed term tenancy agreement does not contain a break clause. If this is the case, the only option available to both parties is to negotiate a mutual agreement to end the tenancy early.
Communication between the parties is key in this case. While the landlord has no legal obligation to agree to end the tenancy, there are certain steps the tenant can take to ensure that the early termination of the tenancy will not put the landlord at a disadvantage. For example, the tenant can offer to find a new tenant to take over the tenancy agreement. In most cases, reasonable landlords will agree to this arrangement.
If an agreement is reached, it is best practice for the tenant to serve the landlord with a notice to quit letter and obtain the landlord's written agreement to the early termination of the tenancy.
If the landlord does not agree to end the tenancy agreement early, the tenant can still move out of the property but will remain liable for rent.
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How to end a periodic tenancy agreement
A periodic tenancy is also known as a rolling tenancy and typically runs on a monthly basis. There are several ways in which a periodic tenancy can arise.
If the landlord and tenant mutually agree to a rolling tenancy at the outset, or if the tenancy started out as a fixed term tenancy and the tenancy agreement says that the tenancy will continue on a rolling basis after the end of the fixed term, this is known as a contractual periodic tenancy.
If the fixed term has ended, the tenancy agreement is silent on what happens next and the landlord allows the tenant to continue to reside in the property, the tenancy converts into a periodic tenancy known as a statutory periodic tenancy,
To end a periodic tenancy, the parties have to serve the correct notice and the tenant must continue to pay rent until the last day of their term.
The amount of notice to give is dependent on the exact duration of the tenancy period. For example, if the tenancy is a monthly tenancy, the parties must serve one month's notice.
As above, if either of the parties cannot serve the correct amount of notice, they can come to a mutual agreement to end the tenancy agreement early.
Again, it is best practice for the tenant to serve the landlord notice in the form of a notice to quit letter or, at a minimum, to obtain the landlord's written consent to the termination of the tenancy agreement.
How to end a joint tenancy agreement
A tenancy is a joint tenancy if a single tenancy agreement was entered into by the landlord and several tenants. Students living in a shared house are usually joint tenants.
Joint tenants are jointly and severally liable for the obligations under the tenancy agreement, including payment of rent.
If one of the joint tenants wants to end the joint tenancy and move out of the property, they will need to obtain the agreement of the other joint tenants and the landlord, unless the tenancy is a periodic joint tenancy. This applies regardless of whether the tenancy agreement contains a break clause.
In every case, ending a joint tenancy ends it for all the joint tenants. If one tenant leaves the property early with the agreement of all the parties involved and a new tenancy agreement is created, the remaining joint tenants will continue to be jointly and severally liable for rent payments and will have to pay the outgoing tenant's share of the rent. This will not apply if the new tenancy agreement sets out a new rent amount or if a replacement joint tenant is found to cover the shortfall.
If you have a lodger agreement
Licences allow lodgers to rent a room in their landlord's property. Under the law, lodgers are excluded occupiers if they share living space (e.g. the kitchen) with the landlord.
If the lodger has exclusive access to the room they are renting, they have an excluded tenancy. If not, they have an excluded licence.
If the lodger has a fixed term licence, it can be ended early if it contains a break clause. If there is no break clause in the agreement, the parties can mutually agree to end the licence early and should document this agreement.
If the licence runs on a periodic basis, different rules apply depending on the type of licence at hand. If the lodger is renting under an excluded licence, only reasonable notice must be given. What is reasonable will normally be agreed by the parties. If the lodger is renting under an exclusive tenancy, any notice given is dependent on the exact duration of the excluded tenancy. For example, if it runs from month to month, one month's notice must be served.
If the tenancy is periodic, regardless of whether it is a statutory or contractual periodic tenancy, the landlord can serve formal notice on the tenant to repossess the property. The tenant can only be evicted by way of an eviction notice in the fixed term if certain grounds are met that justify a section 8 eviction.
In the UK, section 21 notices and section 8 notices can be served for repossession of the rented property by the landlord. Section 8 evictions can only be served if certain grounds set out by legislation are satisfied. These include persistent late payment of rent. Section 21 evictions are also known as no-fault evictions because the landlord needs no particular reason to evict the tenant.
In both cases, the tenant must be given a specific notice period and certain formalities must be complied with in order to effect a legal eviction process. These include protecting the deposit, using the correct form to serve the notice and ensuring that the tenant has been provided with certain documents (including a How to Rent booklet) before the eviction notice is served.
The landlord cannot automatically repossess the property when the eviction notice period ends and the tenant has still not vacated the property. In this case, the landlord will have to apply to the courts for an order for possession and an eviction warrant.
The bottom line
Before you create or sign your next tenancy agreement, make sure to understand exactly what rights and obligations apply under it. The type of tenancy that applies will determine the procedure for ending the agreement early.
From looking for the right tenant and making a property safe to creating a tenancy agreement, landlords have several pressing responsibilities. Legislate is a contracting platform that allows users can create easy-to-understand and legally valid agreements on their own terms. You can read how to create your first Legislate agreement in our tutorial and watch a short demo. If you would like to try Legislate, please book an introductory call.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.