The word “periodic tenancy” refers to a lease that has no set termination date. The landlord and the tenant have agreed that the tenant will be able to stay in the house indefinitely. They can agree, if both parties wish, that there will be notice given prior to termination of the arrangement.
In this guide, we’ll be defining periodic estate whilst explaining all other things you need to know about this type of leasehold estate.
Table of contents
- What Is Periodic Estate?
- How Does Periodic Estate Work?
- How Do You Create A Periodic Tenancy?
- How To End Periodic Estate
- What Are The Advantages and Disadvantages of Periodic Estate?
- What Are The Benefits Of Periodic Tenancy To Landlords?
- Other Types of Leasehold Estate
- Periodic Tenancy Vs Tenancy At Will
- Periodic Tenancy Vs Tenancy At Sufferance
- FAQs On Periodic Estate
- Conclusion
- References
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What Is Periodic Estate?
Study.com defines periodic estate as a leasehold property (also known as tenancy). It is a tenancy that lasts for a period of time without having a set termination date.
According to notlettinggo.co.uk, a periodic tenancy is one that lasts for a set amount of time, usually month to month. Periodic tenancies can also be weekly or quarterly.
The renter or the landlord must give sufficient notice before terminating the arrangement. In other words, it’s a circumstance in which a person can lease a residence on a week-to-week or month-to-month basis and have the flexibility to move (with adequate notice) that a long-term lease does not provide.
READ ALSO: ESTATE AT SUFFERANCE: Definition and Examples
How Does Periodic Estate Work?
A periodic estate or tenancy is a tenancy that continues for long periods until the tenant gives the landlord notification that he wants to end the tenancy.
This tenancy can be created explicitly or implicitly, such as when a lease does not specify the length of the tenancy but stipulates that payments be made at regular intervals. Unless the parties agree on other terms for termination, a periodic tenancy must be terminated with notice at least equal to the length of the tenancy itself.
How Do You Create A Periodic Tenancy?
After the original term of the tenancy expires, it is common for an assured shorthold tenancy to become a periodic tenancy, but this is not a legal requirement. This means that unless the tenant and landlord agree to a new fixed-term, the tenancy will become a rolling periodic tenancy when the fixed term expires.
The assured shorthold tenancy agreement can also be a fixed-term agreement, which implies the tenancy will not change to a periodic tenancy and the tenant will be required to quit the property by the end date. The initial set period has no minimum length, but it is commonly 6 or 12 months.
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How To End Periodic Estate
A landlord must serve a minimum of two months’ notice or the entire time of the tenancy, whichever is higher, to terminate a periodic tenancy, which must conclude on the last day of the period. This means that if the tenancy is for three months, the landlord must give three months’ notice, but if the tenancy is for two months, the landlord must give two months’ notice.
Even after the notice has been served and has expired, the tenant has the legal right to remain in the property unless the landlord obtains a court order.
On the other hand, the landlord can be served with a Notice-to-Quit by a tenant. The minimal term is once again the entire duration of the tenancy, although the absolute minimum length is now one month rather than two. If the contract is for a month, they simply have to give one month’s notice instead of two.
What Are The Advantages and Disadvantages of Periodic Estate?
A periodic tenancy is far more flexible than a fixed-term tenancy, especially if the rent is on a monthly basis.
There is a far shorter notice time and no need to wait until the term ends for either party to end the connection. It also eliminates the necessity for a tenancy agreement renegotiation.
This is especially useful if both parties are satisfied with the current arrangement; allowing the tenancy to become a periodic tenancy rather than renewing the tenancy agreement saves both parties money, time, and effort.
On the flip side, either partner can stop the relationship with only a few days’ notice. This can result in a tenant looking for a place to live or a landlord without a tenant and hence no rental income. If work is required to attract a new renter and make the property appealing, this creates an even bigger difficulty for the landlord.
Another issue to consider when allowing a fixed term tenancy to continue into a periodic tenancy for an extended period of time is that the terms of the tenancies may become out of date should a problem arise.
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What Are The Benefits Of Periodic Tenancy To Landlords?
A periodic estate offers a lot of benefits to landlords. Let’s take a look at a few;
- Increased flexibility – If you suddenly need to get hold of your property, a periodic tenancy grants you access to it as you don’t have to wait until the end of a fixed period.
- Attracting tenants – This flexibility is a plus for certain tenants. A periodic lease is appealing if your tenant moves frequently for work or needs to relocate often.
- Reduced letting agency fees – Periodic tenancies can take off the need for renewals and the administration costs that come with them.
- In periodic estate, it is easier to revise rent payments and get them implemented as a result of its monthly operation basis.
- A periodic tenancy may be advantageous if you are having problems with a particular tenant because you will be better able to evict problem tenants as a last resort.
Possibilities for terminating your tenancy
A rolling tenancy can be ended in one of two ways:
- Reaching an agreement with your landlord.
- Delivering a legal notice of intent to resign.
Many private renters first consult with their landlord or agent and then agree in writing on a tenancy end date when they are ready to relocate.
Some landlords are more accommodating than others when it comes to dates. If you and your landlord can’t come to an arrangement, you’ll have to give them a legal notice to discontinue your tenancy.
If you don’t stop the tenancy using any of these methods, you’re still accountable for the rent.
Other Types of Leasehold Estate
There are also estates for years and estates at will, which are both forms of leasehold estates. An estate for years is a rental agreement for a set period of time. It has a specific start and end date. The tenant is required to evacuate the property once the termination date arrives.
Furthermore, it is the most common sort of tenancy that we encounter. If there is a breach of contract of any kind, this form of a lease can be terminated. A breach of contract may occur if a landlord is required to make repairs to the property but fails to do so.
There is no specified duration of tenancy or end date with an estate at will. This is the form of tenancy you may observe if a property owner, for example, allowed a family member to dwell in a home with no written agreement. This could happen if a grandchild lives with her grandparents while she attends college and they are in a nursing home.
READ ALSO: PERCENTAGE LEASE: Guide To Leases in Commercial Real Estate
Periodic Tenancy Vs Tenancy At Will
A periodic tenancy is one that lasts indefinitely and continues for successive periods unless the opposing party gives the notice to end it. The contact is first made for a specified period of time. The tenant’s tenure, on the other hand, can continue until either side gives notice of termination.
The tenancy at will on the other hand is a type of lease containing a provision that grants the tenant the right to own property for an unspecified duration. Here, either party may terminate the contract at will, and in the event of either party’s death, the contract is automatically terminated.
Periodic Tenancy Vs Tenancy At Sufferance
A periodic tenancy is one that lasts an indeterminate amount of time and continues for successive periods unless the opposing party gives the notice to end it. The contact is first made for a specified period of time.
Tenancy at sufferance lease usually arises when the tenant, who initially entered into a contractual tenancy, fails to leave the premises after the expiry of the contract, thereby becoming a holdover tenant. In such a case, the property owner may choose to dislodge such tenants or hold them for another term. Until such a decision happens, a tenancy at sufferance exists.
FAQs On Periodic Estate
Open inspections used to be considered a mandatory part of renting any property, but are now not quite as common as they used to be. In an open inspection, a specific time and date are set for prospective tenants to drop by and walk through the property for a viewing.
A periodic tenancy is one that lasts for a set amount of time, usually month to month. Periodic tenancies can also be weekly or quarterly in nature, however, this is less usual.
A statutory periodic tenancy happens when an assured shorthold tenancy comes to the end of its fixed term and the tenant stays at the property without renewing the contract.
A fixed-term tenancy lasts for a definite amount of time, whereas a periodic tenancy runs from month to month or week to week. It isn’t over until one of the parties provides notice.
Conclusion
Periodic estate can be a good idea for landowners and tenants as it offers them flexibility and reduces the number of administrative tasks required in a tenancy. However, to make the best out of it as a property owner, you need to draw up a contractual periodic agreement that clearly spells out all the terms in writing and won’t be liable for council tax payment if your tenant moves out unceremoniously.
References
- study.com – Periodic Estate: Definition & Examples
- thebalancesmb.com – Periodic Tenancy or Estate for Period to Period in Real Estate
- notlettinggo.co.uk – What is Periodic Tenancy? Risks and Rewards
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