Where a tenant remains in occupation following the expiry of a fixed term tenancy, a new tenancy may be deemed to arise. Where not otherwise agreed between the parties, the type and term of tenancy deemed to arise is a matter of construction of what occurs between the parties following termination of the original lease.
A recent English High Court case highlights the implications on the timing of notice required to terminate a tenancy where such occupation is deemed to be a yearly tenancy. In that case, the fixed term tenancy expired on 31 October 2009. After the lease expired, the tenant remained in occupation for a further three years conducting occasional negotiations with the landlord but not signing a new lease.
The tenant found a new premises and gave three months notice of its intention to vacate in June 2012. The Landlord successfully argued that the tenant’s occupation was deemed a yearly tenancy. As such, the tenant needed to serve a much longer notice to terminate, expiring on the anniversary of the tenancy, 31 October 2013. This meant the tenant had to continue to pay rent until 31 October 2013.
This serves as a reminder to both landlords and tenants to monitor the expiry of leases to avoid unexpectedly long notice periods to bring the tenancy to an end.