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Tenancy Renewal: What Documents to Serve and Procedures

Tenancy renewal: what documents to serve and procedures

Many private landlords encourage long-term tenants. They are usually more reliable with the rent. And if a tenant does put down roots, they’re more likely to look after the property. Long-term tenants tend to cause far less hassle and a landlord can more or less leave the tenant to their own devices. The less tenant turnover the better for most landlords.


If you share this philosophy, when a tenancy comes to an end, you’ll be hoping to renew it. You’ll want to keep the tenant in your property for longer. If they’ve been a good tenant that is. Assuming this is the case you have two options at the end of a tenancy:


1)      Do nothing. Allow the lease to roll into a periodic tenancy.

2)     Draw up and have your renter sign a new tenancy agreement.


Benefits of a periodic tenancy


At the end of their fixed-term all assured shorthold tenancies rollover in a periodic tenancy. Some landlords will always let this happen. Others allow it to happen almost by oversight. But there are advantages to this.


Firstly, it gives you greater flexibility. And is considerably less hassle than actually renewing the tenancy. Once a periodic tenancy begins the landlord has greater control. You can serve a Section 21 at any point which means you’re able to regain possession of your property within eight weeks. This is a great help if the tenant turns rogue or you decide to sell or renovate the property.


By allowing the lease to roll over you also save yourself the time and possible expense in drawing up a new tenancy agreement. You may also think it best to just leave well alone if everything is running smoothly. If the tenant is paying their rent and looking after the property do you really need to bother with renewing the tenancy?


Benefits of renewing a tenancy


If you have a great tenant it can make sense to offer to renew the tenancy. This provides greater security for you both. The tenant gets the security of a new fixed-term and you know you'll have a guaranteed income for the next twelve months.


Another reason for renewing the tenancy is you're able to change the terms of the lease. In other words, you're able to increase the rent. However, you do need to balance the increased revenue against the possibility of losing the tenant due to the higher rent.


The documents you need to serve


If you do renew a tenancy there are documents you must give to your tenant. This is always the case with any new tenancy. If you're renewing the tenancy your renter may already have copies. But you should give them another.


·         Energy Performance Certificate.

·         Gas Safety Certificate.

·         How to Rent Booklet - make sure you have the current edition.

·         Prescribed information on deposit protection scheme (see below).


If you're renewing the lease you'll also need:


·         Tenancy agreement. Not a legal requirement but an airtight tenancy agreement protects you and the tenant.


What about the deposit?


If you renew the tenancy you only need to re-register the deposit if the terms change. If the terms (the rent most notably) and the deposit amount remain the same there's no need to notify your scheme. However, if the tenancy agreement has changed you should notify the scheme you use and will need to re-register the deposit. There is a caveat here. Terms and conditions may vary between schemes. Check with the deposit protection scheme you use to confirm whether you do need to reregister the deposit.


Changes in legislation


If you do decide to renew a tenancy there are two recent legislation changes you must take into account when drawing up your tenancy agreement. The Tenant Fee Ban and the new deposit cap.


The tenant fee ban


If you're renewing a tenancy you must ensure it complies with the Tenant Fees Ban. Any fees agreed before June 1, 2019, will still be valid until May 31, 2020. But that only applies to exist contracts. Any new tenancy agreement, and that includes renewals, must comply with the tenant fee ban legislation. You can find out more about this here.


The deposit cap


Since June 1, 2019, there is a new cap on deposits. You don't have to refund the difference if a lease moves into a periodic tenancy. However, if you sign a new tenancy agreement with your renter you must make sure the deposit you charge is within the new rules. To discover the maximum deposit, you are able to charge you can use our free calculator. You'll find it here.


MakeUrMove can take the strain out of renewing tenancies. All our property management packages include tenancy documentation and renewals. Click here for more details.

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