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Basis of tenant’s occupation following expiry of contracted out lease

19 March 2014

Where a tenant remains in occupation following the expiry of a contracted out lease, does it occupy as a tenant at will or as a periodic tenant?
The Court of Appeal has confirmed that where the parties are negotiating for the grant of a new lease, a tenancy at will is most likely to be implied, even if the tenant continues to pay rent to the landlord on a periodic basis. This is generally good news for landlords, as it enables a landlord to obtain possession quickly and easily if negotiations subsequently break down (a prescribed amount of notice has to be given to end a periodic tenancy and, even once notice has been given, a periodic tenant enjoys security of tenure rights).
Despite this clarification, each case will turn on its own facts, so it remains best practice to ensure that the basis of a tenant’s continued occupation is agreed and documented in writing before a contracted out lease comes to an end.

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