Terminating tenancy in England
A lease termination is a situation when a landlord and a tenant have decided to end their rental agreement. It can occur for different reasons, however, has always to adhere to the legal requirements for lease termination that are outlined in the lease agreement.
While leases vary according to the duration, the rules of termination also slightly differ. Still, some of them apply to all types:
- The rental of parking spaces or garages, including other outbuildings, rented with the building, follows the same rules as the termination of the building itself, unless the rental is made separately.
- The lease may be terminated by transferring it to a third party (assignment of the lease), with the prior agreement of the landlord.
- The landlord has the authority to terminate the lease in advance for valid reasons, as specified in a resolutory clause in the contract that allows immediate termination in the event of significant breaches.
- In a commercial lease, the tenant generally has a right to security of tenure, that is a right to remain in property after the lease has ended. But the lease may be “contracted out” of security of tenure provisions by a simple or statutory declaration.
Fixed-Term Lease Termination
A fixed-term lease lasts for a specified period. The contract automatically ends after the last day of the set term.
When the fixed-term lease comes to an end, 3 options can be used:
- Sign a renewal agreement for a new fixed term.
- Let it become a rolling or a periodic tenancy.
- Leave the tenancy.
Open-Ended Lease Termination
An open-ended lease is concluded without a time limit. Its termination depends on the document type.
- A commercial lease is concluded from 1 to 3 years. The notice period is commonly tied to the lease length, such as 1-3 months for a 12-month lease or 3-6 months for a 3-year lease. Additionally, it is possible to stipulate a minimum duration, with any notices becoming applicable only after that specified period.
- A residential tenancy agreement typically ranges from 1 to 3 years. Termination notice periods vary from 2 to 12 months, with the provision of a minimum duration (not less than 6 months) during which the termination notice can’t be issued.
- A parking licence agreement can be terminated at any time with a one month’s notice if the rent payment period is monthly, respectively one week’s notice if the rent is weekly.
Sale of Leased Property
If the landlord sells the leased property, the tenant’s interest in the property does not automatically become null. The lease is continued with the new owner, under the same terms. The buyer has to adhere to landlord responsibilities and may evict the tenant by respecting the law as well as the signed lease agreement.
AdminTech Recommends
Landlords or owners letting a property that want to avoid legal consequences and maintain a positive landlord-tenant relationship should stick to the following recommendations:
- Decide whether you would like to rent out the property for a fixed term or on a renewable basis and attach termination rules according to the document type.
- Include a break clause for early termination.
- If you don’t want the tenant to continue occupying the commercial premises after the set end date of the lease, make sure the tenant declines the security of tenure and waives the right to lease extension. This can be done using the Notice to Waive Security of Tenure. Please ensure that this document is signed at least 14 days prior to the lease signing.
- Consider whether to include the lease of the car park, furniture, or other outbuildings in the same contract to enforce the same cancellation rules, or in a separate contract.
- Promptly respond to any tenant complaints and assess their nature carefully so that an amicable solution can be found, that is much better than being notified of immediate termination, often accompanied by a claim for damages.
When it comes to a private or commercial tenant, this person should:
- Check the lease renewal clauses, as they may specify a longer notice period for termination than required by law.
- Examine whether the lease of the car park or other outbuildings is made in conjunction with the main lease, or whether it can be terminated separately, with a shorter notice period.
- Consider carefully whether you wish to terminate the lease due to defects and assess whether the defect is of sufficient severity. Other remedies may be available, such as rent reduction, and intervention for repairs or damages.
Please note, as information about lease termination is typically covered in a lease agreement, this document should be established in the right way. For this, you can take advantage of our legal lease agreement templates and adapt them to your needs.
