Termination of Tenancy

Termination of a Tenancy

  • No tenancy including a lease is forever, they must end at some point.
  • A tenancy can come to an end voluntarily with the agreement of both parties (landlord and Tenant) by surrendering the lease/tenancy or by merger
  • A tenancy can also be terminated unilaterally (by one party) through Notice of quit or forfeiture
  • Tenancy will also come to an end of its own nature where the time period for which it was granted ends often referred as Effluxion of time

Formalities

  1. A tenancy is a contractual relationship between landlord and tenant. The rules of the contract must be followed in order to terminate the tenancy
  2. Tenancy also provides an interest in land, the law there for demands that the strict formalities must be met
  3. Ending a tenancy may result in Homelessness and other difficulties for tenant so it is paramount for a landlord, in particular, to comply with the conditions set out in a tenancy agreement to be fulfilled

Example

John lets 20, graham palace, to Phillip for 1 year. Both landlord and tenant agreed to the requirement of a three-months’ notice in advance to terminate the tenancy. In order to terminate the tenancy either by John or Phillip, they must comply with the contractual term and give notice of three months in advance. In the absence of a three months’ notice, the tenancy cannot be terminated

Terminating a fixed term Tenancy

  • A fixed term tenancy comes to an end automatically when the term of tenancy comes to an end
  • Landlord and tenant generally do not have to do anything, as the tenancy ends because the time period defined in the tenancy comes to an end. This is also known as Effluxion of time.
  • The landlord and tenant may agree to extend the term
  • The landlord and tenant may also agree and include provisions in the agreement enabling the tenancy to be terminated earlier than the agreed term
  • The landlord and tenant may also agree to terminate the tenancy prematurely by means of an option to purchase
  • The landlord and tenant may also agree on continuation of tenancy conditional upon the tenant performing or not performing a certain act. For example, tenant not becoming bankrupt or generating a certain amount of revenue( Commercial Tenancies only), or Tenant must be in Job etc

Repudiation of a Fixed Term Tenancy

  • A tenancy agreement is also a contract between a landlord and a tenant. Where a landlord or tenant can establish that the other party did not comply with the terms of the tenancy. It may allow the aggrieved party to end the tenancy.
  • However, the breach of the term has to be a serious breach,

Examples

Unpaid rent for 6 months, continuous Nuisance

 Disrepair of the property

Frustration of a Fixed Term Tenancy

Frustration occurs where the circumstances surrounding the tenancy change so radically that the whole basis or purpose of the tenancy is no longer viable, it will terminate the tenancy before it runs to its natural conclusion

Example

Ali rented a warehouse and the access road is now closed by the local authority for the unforeseeable time period. This event will frustrate the tenancy 

Surrender of a fixed term tenancy

A tenant can also surrender the fixed term tenancy; however, the surrender can only occur by a mutual agreement between the landlord and tenant. In the absence of an agreement between a tenant and landlord, there is no surrender of a fixed term tenancy.

Merger

It occurs when one of the parties’ (landlord or tenant) interest in land is absorbed into the other party’s interest with the result that there is no longer a relationship of Landlord and Tenant.

Termination of Periodic Tenancies

  • A periodic tenancy does not or will not end of its own accord by the effluxion of time
  • In periodic tenancy, the length of each rental period is defined in the agreement but there is no limit is placed on the total length of the tenancy
  • Both Landlord and Tenant can end the periodic tenancy by giving the notice to quit

Notice to Quit

  • Either a landlord or a tenant can bring a periodic tenancy by means of notice to quit.
  • It serves as an advance warning that the periodic tenancy will end on a particular day and time
  • A simple notice to quit would be sufficient and there is no prescribed format or template
  • The Notice to Quit may be oral as well, however, it is advisable to send the notice in writing as the Protection from Eviction Act provides that notice shall not be valid where it is not in writing. The notice must state that of the tenant does not leave the
  • The Notice to Quit must clearly state when the notice expires, which means the day upon which it is stated that the notice takes effect
  • The notice must give sufficient time to quit which means that there must be a sufficient time period in between serving a notice and expiry of the notice.
  • The notice time period must comply with the minimum period set out by law under a periodic
  • Generally, the length of notice should be at least one rental period, a weekly tenancy requires one week’s notice, a monthly tenancy requires one month’s notice and a quarterly tenancy will require a three month’s notice.
  • A periodic tenancy for any period of over six months requires only Six months’ notice

Contents of Notice to Quit

It must state or inform the tenant that if he/she does not leave the dwelling that landlord will seek for a possession

order from the court before the tenant can be evicted

Must state the expiry date of the notice

Must also state that landlord cannot apply for such order before the expiry of the notice

It must also inform the tenant that tenant can seek advice from a Solicitor, Citizens’ Advice Bureau or housing Centre if the tenant is not sure of his/her position

It must also state that financial assistance in the form of legal aid may also be available to a tenant

Service of Notice

  • Finally, the notice must also be served on the tenant for it to be The timing of service of notice is very important. Where the notice is served late it will be invalid
  • Only the immediate landlord or his authorised agent can serve a notice
  • Where an agent serves the notice, the notice must clearly state that it is served on behalf of the party for whom the agent is acting
  • A head landlord cannot serve a notice to quit upon a subtenant nor can a sub-tenant serve a notice to quit upon a head landlord
  • A tenant can also serve a notice to quit upon a landlord
  • Service of notice can be to the last known address or business of Tenant in UK
  • Service of notice can also be to the premises which are rented out
  • A notice can also be served by affixing or leaving the notice on the land or the building in the lease
  • Sending a notice by registered or recorded delivery to tenant at his or her last known address or business will also suffice
  • Where the letter is not returned back to sender the delivery will be deemed to have served at the time at which the letter would arrive in the ordinary course of post

Waiver of the notice

  • Once a valid notice to quit is given, the tenancy will automatically terminate when the notice period expires.
  • It is still possible to save the tenancy, by express or implied agreement between a landlord and tenant to waive the notice to quit. It will give rise to a new tenancy

Forfeiture of Tenancy

  • Forfeiture of tenancy will end the tenancy.
  • It can be used only where the landlord has expressly reserved the right to forfeit in the tenancy agreement.
  • The landlord must comply with strict procedural requirements
  • Forfeiture is subject to strict rules of waiver
  • Tenant has extensive rights to apply to the court for relief from forfeiture
  • It is only the landlord who can bring proceedings under the forfeiture
  • The tenant can only defend a claim under forfeiture

Conditions

A landlord will acquire the right to forfeit the lease if the tenant is in breach of

  1. A condition set out in tenancy agreement, or
  2. Where a tenant breaches a covenant (promises) and the lease or tenancy agreement contains a proviso of re-entry

Forfeiture of tenancy/lease is brought by landlords by taking court proceedings and by issuing and servicing a claim for possession. Landlord and tenant can mutually agree to waive the forfeiture

Proviso of re-entry

It will establish the circumstances under which a landlord may re-enter the property and terminate the tenancy/lease

Relief from Forfeiture

Where the landlord has enforced a forfeiture for breach of covenant(promise) other than the non-payment of rent, the tenant can apply to the court for a relief. A tenant can apply at any time while the landlord is proceeding by action or otherwise to enforce a right of re-entry or forfeiture. Each case is decided on its own facts and courts normally consider the following in making a decision for relief

  • The nature of the breach
  • The seriousness of breach
  • The conduct of the parties
  • The value of the property and the extent of the damage caused by the breach
  • The losses that will be suffered by the tenant if relief is not granted

Where the breach of the promise is remediable and where a tenant is willing and ready to remedy the breach within reasonable time, it is highly likely that the relief will be granted

Example

Ali agreed/covenanted to redecorate the interior in the lease, However, upon the non-decoration, the landlord applied for a forfeiture of the lease. Ali has applied for a relief and he is willing to redecorate the property immediately. It is highly likely that Ali will be granted a relief from forfeiture.

Where the beach is irremediable the courts are unlikely to grant a relief to a tenant. For example, immoral use of the property which is now stigmatised and attached to the property

Rent Arrears

Relief against forfeitures where rent is in arrear is only allowed where

  • The arrears are paid at least five days before the hearing, in such case it will be deemed as an automatic relief
  • The arrears paid within four weeks of hearing or as specified by the court. This will result in as an automatic relief
  • Where a tenant applies to court after the six months of the landlord recovering possession, the relief is at the desertion of the court. It may or may not allow a relief.

Disclaimer

While every effort has been made to ensure the accuracy of the information provided in this article, it does not constitute legal advice and cannot be relied upon as such. Each legal case and issue may have unique facts and circumstances, as a result legalally does not accept any responsibility for liabilities arising as a result of reliance upon the information provided. For further help and guidance, you can always rely on and seek advice from our experienced lawyers.