Can a Landlord Refuse to Renew a Tenancy Agreement in the UK?

As a landlord, deciding whether to renew a tenancy agreement is a key part of managing your property. This choice not only affects your relationship with your tenant; there are also important legal aspects to consider.

In this guide, we will answer a common question: When can a landlord refuse to renew a tenancy agreement in the UK? Landlords must take care when it comes to renewing tenancy agreements, as they must uphold tenants' rights while also working towards their goals for the lease renewal. Here, the landlord law experts at Percy Hughes & Roberts Solicitors aim to provide clear, easy-to-understand guidance on your rights and options, to help you make informed decisions that comply with UK tenancy laws.

If you have any questions we have not covered, our team can answer your landlord query directly. You can contact us by completing the enquiry form below or by calling 0151 666 9090.

What Is a Tenancy Agreement?

A tenancy agreement is a fundamental contract between a landlord and a tenant, outlining the terms under which the tenant rents a property from the landlord. It serves as a legal document that both parties agree to and abide by. Here are key elements typically included in a tenancy agreement:

• Identification of parties and property: It names the landlord, the tenant, and the rental property's address.
• Term of tenancy: The contract details whether the tenancy is a fixed-term (lasting for a set period, usually 6 or 12 months) or a periodic tenancy agreement (rolling weekly, monthly, or as agreed).
• Rent: This includes the amount of rent, when it is to be paid, and the method of payment.
• Deposit: If a deposit is taken, the agreement outlines the amount, the protection scheme in which it is held, and the conditions for its return.
• Tenant and landlord obligations: The agreement delineates the responsibilities of both parties, like maintenance, repairs, and adherence to rules (e.g., no smoking, pets policy).
• Break clauses and notice periods: Conditions under which the agreement can be terminated early by either party may be included.
• Additional clauses: Any other specific terms agreed upon, like rules about subletting, decorating, or garden maintenance, should be part of the agreement.

Tenancy agreements provide a clear framework for the rental period, and help to avoid misunderstandings and disputes.

Do Tenancy Agreements Need to Be Renewed?

Legally, there is no automatic requirement for the renewal of a tenancy agreement once its fixed term concludes. This decision on whether to renew the agreement or begin a new tenancy depends on several factors, including the needs and preferences of both the landlord and the tenant.

If a fixed-term tenancy agreement reaches its end and neither party takes action to renew it, the agreement typically transitions into what is known as a 'statutory periodic tenancy'. This type of tenancy rolls on a periodic basis (usually monthly) under the same terms and conditions as the original fixed-term agreement, until either party decides to bring it to an end.

For landlords, not renewing a tenancy can offer flexibility. It allows them to regain possession of the property without needing to provide a reason, as long as they provide proper notice. Under a periodic tenancy, the landlord can do this at any time. For tenants, a periodic tenancy provides them with the option to leave the property with a shorter notice period than might have been required under the fixed-term agreement.

However, there are situations where both parties may prefer the certainty of a new fixed-term agreement. Renewing a tenancy can provide stability for the tenant and ensure a steady rental income for the landlord for the duration of the new term. This is all dependent on the landlord and tenant’s individual circumstances.

Can a Landlord Refuse to Renew a Tenancy Agreement in the UK?

Yes, landlords can refuse to renew a tenancy agreement. The decision to renew or not lies with the landlord at the end of the agreement's fixed term. While there is no obligation to renew, this decision should be made carefully, considering various factors like the landlord's future plans for the property and their experience with the current tenant. This choice is a significant part of property management and involves several considerations:

• Reasons for potential non-renewal: Common reasons why a landlord might decide against renewal might include plans to sell or reoccupy the property, or intentions to undertake extensive renovations. Sometimes, the decision is influenced by the landlord's experience with the tenant, especially if there have been issues like consistent late payments or breaches of the tenancy agreement.
• Importance of fair practice: While making this decision, landlords must ensure they are not acting on discriminatory grounds. All tenants are protected under the Equality Act 2010, and decisions based on race, religion, gender, sexual orientation, disability, or other protected characteristics are unlawful.
• Future steps and considerations: If a landlord decides not to renew, it is important to consider the next steps, including how and when to inform the tenant and the legal procedures that must be followed to end the tenancy and regain possession of the property legally.
• Communication with the tenant: Clear and timely communication is key. Informing tenants about the decision not to renew as early as possible is not only considerate but also helps prevent misunderstandings and allows tenants ample time to find alternative accommodation.

What Are the Differences Between Statutory and Contractual Periodic Tenancies?

Understanding the differences between statutory and contractual periodic tenancies is crucial for landlords in managing their rental properties effectively after the expiration of a fixed-term tenancy agreement. This is particularly true if the landlord is thinking about changing the agreement or evicting the tenant after the fixed term has come to an end. Here are the key distinctions:

Statutory Periodic Tenancy

• How it arises: This type of tenancy automatically comes into effect when a fixed-term tenancy ends without renewal, and the tenant continues to live in the property. There is no need for a new agreement to be signed.
• Terms and conditions: The terms of the original fixed-term agreement continue to apply. The tenancy rolls over into periods matching the rent payments (e.g., a monthly rolling tenancy if rent was paid monthly).
• Ending the tenancy: To end a statutory periodic tenancy, either the landlord or the tenant must give notice according to legal requirements, which typically depends on the frequency of the rent payment. You can read our “How To Evict a Tenant Without Going to Court” guide for more information.

Contractual Periodic Tenancy

• How it arises: This occurs when the initial tenancy agreement explicitly states that after the fixed term, the tenancy will continue on a periodic basis. It can also be set up at the beginning of a new lease without a fixed term.
• Terms and conditions: Unlike the statutory periodic tenancy, the terms can be tailored and agreed upon by the landlord and tenant at the outset, or changed with relative ease. This can include specific clauses on notice periods, rent reviews, or other unique terms.
• Greater control and flexibility: Since the terms are agreed upon in advance, both parties have greater predictability and control over the tenancy. It is often seen as offering more security for landlords, as they can set terms more favourable to their situation.

Similarities and Tenant Protections

Both statutory and contractual periodic tenancies offer protections to tenants under the Housing Act 1988. In both cases, tenants have a right to remain in the property until legally evicted, which requires the landlord to follow proper procedures, including serving the correct notice.

How Can a Landlord Legally Refuse to Renew a Tenancy Agreement?

For landlords, legally refusing to renew a tenancy agreement requires following specific procedures and guidelines to ensure compliance with housing laws. Here are the steps and considerations involved in this process:

Understand the legal grounds for refusal

A landlord can decide not to renew a tenancy for various reasons, such as if they intend to sell or move into the property, they are planning renovations, or there have been issues with the tenant's behaviour during the tenancy. However, the decision should not be based on discriminatory reasons.

Give reasonable notice

Landlords must provide tenants with reasonable notice if they do not intend to renew the tenancy. The type of notice and the length of the notice period depend on the tenancy agreement and the reasons for not renewing.

For assured shorthold tenancies, a Section 21 notice is commonly used when the landlord does not need to state a specific reason. This requires giving the tenant at least two months' notice.

A Section 8 notice is necessary if there are particular grounds for possession, such as rent arrears or breaches of the tenancy agreement, and it is not the end of the tenancy's term. You can read about serving a Section 8 notice in our guide.

Follow the prescribed procedures

Ensure that all legal requirements are (or were) met. For example, you must protect the tenant’s deposit in a government-approved tenancy deposit scheme and provide information about this when they move in. If you failed to do so, there may be problems with the eviction.

Landlords must also have met other legal responsibilities, like providing an Energy Performance Certificate, a current Gas Safety Certificate, and the government’s “How to Rent” guide.

Seek legal advice

Speaking to a solicitor can help you to ensure that the eviction is legally compliant and avoid any complications. If complexities or uncertainties arise during the process, or if the tenant disputes the decision, legal advice can help you to resolve the problem - often before the matter is escalated to court. Professional guidance can help ensure that all actions are legally sound and that the landlord’s rights and interests are protected.

Keep records

Maintain clear records of all communications and notices served. This documentation can be crucial in case of any legal disputes or if the matter proceeds to court.