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Contrary to what many landlords think, in an assured shorthold tenancy it is not actually necessary to sign a new agreement at the end of the original agreement.
If a tenant stays in the property after the fixed term ends it beomes what is known as a 'periodic tenancy'. This means the tenancy continues for an indeffinite period (potentially many years) on the same terms and conditions that were in the original tenancy agreement unless both landlord and tenant agree otherwise..
Why sign a new fixed-term tenancy agreement?
The advantage for landlords and tenants is security. This is because the renewed shorthold tenancies will give an initial minimum fixed term of 6 months and the monthly rental income will typically be fixed during this period as well.
If there is no new tenancy agreement a landlord can give the tenant one month's notice. This only applies if the original fixed term has ended and it has become a 'periodic tenancy'. The main exception to this notice period is if a landlord agrees to a different notice period.
At the time of renewing a tenancy agreement it is common for landlords (or rather their agents) to ask for a renewal fee for 'admin costs'. This is often waived because the reality is that if a good tenant moves out there may be several weeks or longer when the property is empty plus advertising expenses and these will cost the landlord significantly more than any 'renewal fee'.
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