Hi, I am trying to work out whether to renew tenancy and refund one weeks security deposit or allow the tenancy to go periodic and keep six weeks deposit. What are the pros and cons?
If we go periodic, is it correct we can issue a new tenancy agreement at any time? For instance, if 5 weeks rent ever exceeds the security deposit and we want to increase the deposit in-line with 5 weeks rent?
We dont at this point want to increase rent. Our tenants moved in a year ago to our newly renovated 3 bed, with all new kitchen, appliances, utility, bathroom, doors, tiling, carpet, the lot. so we are loath to refund any security deposit. They do however appear to be treating the house with respect.
You can ask the tenants to sign a new agreement at any time, during a periodic tenancy or a fixed term tenancy. At any time, the tenants can also say no.
I personally think that it would be losing perspective to issue new tenancies (or withhold from doing so) on the basis of gaining a little extra deposit money. Making sure your tenancy suits you needs, be that periodic or fixed term, is much more important than having a bit more deposit.
For example, if you don’t renew bcs then you’d have to refund the extra week’s deposit, then your tenancy will be periodic. That means the tenant could serve just one month’s notice, which could easily result in a void period, e.g. if it happened over Christmas. In that case, you’d lose more in rent than you would have recouped from the extra week of deposit in the case of large tenant damages.
Treating the deposit size as more important than the tenancy type seems to be letting the tail wag the dog.
Thanks for your reply.
With a fixed term contract the tenant can move out at the end without giving any notice, they have no need to sign a renewal until the last moment. Going periodic they must give one months notice and we keep the original deposit until they vacate or until we renew.
Our contract goes periodic Nov 10 if we dont renew. However we know they want to rent long term which suits us. We have hesitated in renewing until we have assessed all the pros or cons.
Are there other advantages/disadvantages of FT contract over periodic and vice versa?
PS what happens if the tenants refuse to sign a renewal or new tenancy agreement?