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The Benefits of Renewing a Tenancy Agreement Against a Rolling Contract

The change from a fixed-term shorthold tenancy into a rolling contract, also known as a periodic contract for tenancy is a procedure that could be confusing for both landlords and tenants.

Tenants in particular are often confused by the various forms of the tenancy.

The most confusion happens at the expiration on the contract with a fixed term.

Typically, shorthold tenancy agreements last for either up to twelve months. The assumption is that at the conclusion of the agreement the tenant signs the new contract or removes themselves from the property.

The reality is a bit different. In reality, at the expiration of a fixed-term contract the tenancy will be immediately, and immediately transformed into a rolling agreement. Most often, it is of one month duration, but it can be adjusted to match the duration of rent payments.

For instance, if rent is paid bimonthly, the contract rolling will run at least two months. If it is paid every week the contract will last for one week , and the cycle continues.

The landlord’s rights at the expiration of a fixed-term tenancy agreement England

A lot of landlords will be content with the rolling contract to enter into force.

Some tenants will prefer to see the tenant sign an additional fixed-term tenancy contract.

There are a number of positive reasons:

A fixed-term lease agreement provides greater security for both the tenant and the landlord

From the landlord’s point the landlord’s point of agreement is one where the tenant has to pay rent for the whole duration of the agreement.

The cash will flow in on a regular basis which is fantastic for cash flow . There is no risk that the property will be vacant and not generating income.

Tenants who are good to work with can be worth the weight in gold

If you are able to find a reliable tenant, a fixed-term contract guarantees that they’ll stay permanently in the house. Everyone wants to keep the good tenant but in the case of a rolling contract they might be more likely to move out of the property in search of the safety of a long-term contract elsewhere.

The process of finding new leases can prove to be a challenge.

If you sign a fixed tenancy agreement, you can be reasonably certain that the tenant will be in place at the expiration date of the agreement.

This eliminates the hassle and cost, of finding new tenants.

Finding tenants for your property can be an exhausting and time-consuming process. During the time that the search is going on the property, it is vacant and not generating any revenue. The whole process is extremely expensive.

What is the second perspective?

We’ve discussed the advantages of fixed Tenancy agreements in comparison to a rolling contract however, what about the cons?

The greatest benefit is the flexibility that a periodic or rolling contract offers the landlord.

It’s much simpler to let tenants go as the landlord doesn’t have to delay the conclusion of the fixed time period before giving notice. This can be especially beneficial in the event of a non-paying tenant, or if you quickly regain control of your property.

But, as we mentioned in the previous paragraph, the notice period can be detrimental as tenants that you don’t want lose may move out of the blue.