Real Estate Matters Update — April 2014: avoid an unwanted periodic tenant

By Paul Henson

The recent decision of the Court of Appeal in Barclays Wealth Trustees (Jersey) Ltd v Erimus Housing Ltd (2013) EWHC 2699 (Ch) has provided some welcome clarity in determining the legal status of tenants who remain in occupation once the term of a contracted-out lease expires.

It is often stated that on the expiry of the term of a lease and ‘without more’, the payment and acceptance of rent will create an implied periodic tenancy. In order to avoid such an implication, landlords are well advised to immediately initiate a rent stop against the tenant’s account. The alternative (and preferable) position for a landlord is for the tenant to occupy under an express or implied tenancy at will, which is terminable without prior notice.

Periodic tenancies are particularly unwelcome for commercial landlords as occupiers ‘for business purposes’ may also acquire the statutory protection of the Landlord and Tenant Act 1954. This may create additional difficulties in relation to terminating the occupancy, which must then be undertaken in accordance with the act…

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