How To End A Tenancy Agreement, As A Landlord
Landlords can often face challenges or experience difficulties with their tenants, which can often result in the landlord having no choice but to end the tenancy and ask the tenants to leave. Sometimes there are no issues with the tenants, but the landlord needs to end the tenancy for other reasons.
One thing that has saved many landlords from suffering financially while ending a tenancy and evicting a tenant is landlord insurance. Landlord insurance offers excellent peace of mind because you can tailor it with different levels of coverage. It can help to protect you against issues such as loss of rent during a messy tenant eviction, contents insurance, and covering the costs of repairing any damage to your property caused by nuisance tenants.
Ending a tenancy isn’t straightforward, and there is no one-size-fits-all solution that will suit the needs of every landlord. For example, you will need to give your tenants certain information, warnings and notices depending on the tenancy agreement you have set up and the terms of that agreement.
Assured Shorthold Tenancies (AST)
Most residential lettings in the UK have Assured Shorthold Tenancies (AST). For new lettings, landlords and their tenants will need an up-to-date AST contract signed by all parties: Landlord, tenant and guarantors.
Assured Shorthold Tenancies were introduced by the Housing Act 1988 and updated by the Housing Act 1996. Although AST tenancy agreements are the most popular type of agreement used by landlords, not all ASTs are precisely the same. While similar in structure, landlords can go into greater detail to write terms and conditions that will apply to the tenancy.
Landlords can download a free AST tenancy agreement online and tailor it to fit their needs. There are also free draft AST agreements online that you can use to give you more guidance, which you can amend yourself and use with your tenants.
Ways to End a Tenancy as a Landlord:
You can end a tenancy with assured shorthold tenancy agreements (AST) using a Section 21 or Section 8 notice or both. A Section 8 notice can be issued if your tenants have broken the terms of their tenancy agreement.
Section 21 notice of seeking possession can be used to evict your tenants when:
- Their fixed-term tenancy ends – if there is a written contract
- During a tenancy with no fixed end date – known as a ‘periodic’ tenancy
If your tenants are on an assured shorthold tenancy, you can take your property back without giving a reason under the following circumstances:
- The date they must leave is at least six months after the original tenancy began
- They have a periodic tenancy – or they have a fixed-term tenancy, and you are not asking them to leave before the end of the fixed term
- You’ve protected your tenants’ deposit in a deposit protection scheme
You must give your tenants a ‘notice to quit’, which is written notice that you want the property back. You must include the date by which the tenants must leave your property. The notice period you give them must be at least two months for section 21 notices.
Landlords that want to end a tenancy must provide their tenants with proper notice. Similarly, if a tenant wants to end a tenancy and move out, they must correctly surrender the tenancy by giving their landlord adequate notice.
Tenants can issue a ‘Surrender Of Tenancy’ notice to their landlord to bring their tenancy to an early end. There are many reasons for a tenant wanting to end their tenancy, for example, if they have a growing family and need a larger home or if they need to relocate for work or to make a career move.
A ‘Surrender of Tenancy’ notification is an official notification from the tenant to the landlord, informing them that they want to end the tenancy on a specific date. Usually, tenants need to provide a minimum of one month’s notice to the landlord, but this could be longer if the tenant needs more time to find new accommodations.
Sometimes a tenant can have a change of circumstances that requires them to end their tenancy agreement early and move out before the end of their fixed term. Or the landlord may need to claim back the property before the end of the fixed-term tenancy agreement due to unforeseen circumstances. In these cases, the two parties can mutually end the tenancy on a given date.
Landlords and tenants with a periodic tenancy can also mutually agree to end a tenancy on a date that isn’t the end of a rental period. For example, if the tenant is starting a new job in another part of the country mid-month and needs to move house before the end of their monthly rental period. In this case, each party will need to reach a separate agreement, which needs to be agreed upon by both parties rather than one party serving notice on the other.
If you want to evict your tenant, you must issue them a Section 21 notice to get your property back after their fixed-term tenancy ends. If your tenant refuses to leave by the end of their fixed-term tenancy date and they owe you rent, you can apply to the court for a standard possession order.
If your tenants are up to date with their rent payments and you do not want to claim any unpaid rent, you can apply for an accelerated possession order. Should your tenant refuse to leave your property, you can apply for a warrant for possession. This means court bailiffs can physically remove the tenants from your property.
Break clauses allow both tenants and landlords to end a tenancy agreement before the fixed-term contract ends. Landlords can add a break clause to the tenancy agreement that allows either the tenant or landlord to end the tenancy with no financial penalties as long as specific criteria are met.
For a tenant, a break clause can allow them to move out of the property earlier than the end date of their tenancy agreement. For a landlord, it will enable them to remove a tenant for any reason mid-contract.
In most cases, break clauses are worked into the mid-point of a tenancy agreement. For example, if you have a 2-year tenancy agreement, you may insert a break clause at the one-year point. This can be useful for tenants that move around for work and have no plans to set down roots in one place. It can help to remove any monetary burden the tenancy agreement may place on them.
Break clauses can be worded to fit the needs of both parties and specify precisely how the tenancy agreement can be ended early. In most cases, this will include how much notice each party needs to give the other, for example, 2-weeks, a month or two-months notice etc.
For modern landlords, it can be challenging to end the tenancies on their rental properties. Understanding the proper way to serve notice on their tenants and how to use break clauses in assured short-term tenancy agreements for the benefit of both parties can be invaluable.
While most tenancies are trouble-free, landlords do have valuable tools to help remove problematic tenants causing issues for them and their rental business. One of the most useful tools to have is Landlord Insurance to help protect your finances during tenant disputes and periods when you are not receiving any rental income. Minimise financial losses and protect your investments with our robust business insurance plans at Brisco Business.
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