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Contracting Out

QUESTION: I am a landlord, and a lease which is contracted out of the security of tenure provisions has expired. I want to charge rent while negotiating a new lease but not create a protected tenancy. How can I do this?

It is often the case that tenants with leases that are contracted out of the security of tenure provisions of the Landlord and Tenant Act 1954 will remain in occupation after the lease has expired. This may be because the tenant needs more time to find alternative premises or it wants to stay and be granted a new lease.

In practice, the negotiations for the terms of the new lease can be allowed to drag on for months, and even years, and many landlords seem to be reluctant to demand or accept rent during that because they want to avoid any arguments by the tenant that a periodic tenancy with 1954 act protection has arisen.

There is actually no reason why rent should not be paid while negotiations are taking place because the continued occupation by a tenant pending the negotiation of a new lease is one of the typical circumstances in which a tenancy-at-will can be inferred.

To avoid any doubt, a landlord is best advised to either get the tenant to sign up to a formal tenancy-at-will until the new lease is granted.

The landlord should not, however, refer to any notice requirements or forfeiture provisions as those would encourage a court to infer that a periodic tenancy has been created.

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