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Terminating a Fixed Term Tenancy

PART 4 TENANCY

Once a tenant has remained in occupation of a dwelling for a period of 6 months, he or she acquires the benefit of a Part 4 tenancy under the Residential Tenancies Act 2004 (the “Act”).

A Part 4 tenancy entitles the tenant to remain in occupation for a period of four years in total, unless a valid Notice of Termination is served on him or her.

Please be aware that any existing tenancies where the landlord is an Approved Housing Body will be given a tenancy commencement date of 7th April 2016, the Part 4 rights will commence 6 months after this date.

FIXED TERM TENANCIES

Landlords and tenants often enter into a tenancy for a fixed term period. For example a landlord or tenant may agree that the tenancy will be for a period of two years. Usually, the terms of a fixed term tenancy are contained in a lease agreement. A written lease agreement is not necessary however, for a fixed term tenancy to exist, as the Act provides that a fixed term tenancy may also be oral or implied.

FIXED TERM TENANCIES AND PART 4

The existence of a fixed term tenancy does not preclude the operation of Part 4.  Part 4 runs with a fixed term tenancy, so that the continuous occupation by a tenant under a fixed term tenancy for a period of 6 months, means the tenant shall, as in the normal course, become entitled to the protections of a Part 4 tenancy. In cases of fixed term tenancies however, the rights under Part 4 only apply to the extent that they benefit the tenant over and above the rights afforded to him or her under the terms of the fixed term tenancy.

TERMINATION

Part 4 Tenancies

A landlord may terminate a Part 4 tenancy, in accordance with the provisions of the Act, where any of the circumstances set out in Section 34 of the Act arise. 

A tenant can terminate a Part 4 tenancy at any time and without reason, provided he or she gives the requisite notice and complies with the provisions for termination of a tenancy under the Act, which includes the service of a valid notice of termination.

Please see Sample Notices of Terminations page for further information.

Please ensure you give the adequate Notice. The first day of a period of notice is the day after service. Therefore if the Notice is served on the Monday the period of Notice is counted from the Tuesday.  The notice periods depend on the length of the tenancy and the reason for issuing the notice in some circumstances. Whilst not a specific requirement under the Act, it may be prudent to give an additional couple of days notice to ensure that the party receives the required notice periods

Fixed Term Tenancies

A landlord can only terminate a fixed term tenancy where the tenant has been in breach of his or her obligations. Accordingly, a landlord cannot rely on the provisions of Section 34, to terminate a fixed term tenancy during the fixed term. Following the expiration of the fixed term period however, if the tenant has exercised his rights under Part 4, to extend his tenure for the remainder of the Part 4 tenancy of 4 years, the landlord can from then on, rely on the provisions of Section 34.

Similarly, a tenant can only terminate a fixed term tenancy where the landlord has been in breach of his or her obligations.(6) In addition however, where the landlord has refused consent to an assignment or sub-let, the tenant can also terminate the tenancy, in accordance with Section 186.

Please note tenants of Approved Housing Bodies are not permitted to assign or sublet the tenancy.

EXPLANATORY NOTE

Greater Security of Tenure

Landlords and tenants are free to agree as part of the tenancy arrangement, more beneficial rights in favour of the tenant, than are created by Part 4. This is permitted by Section 26 of the Act. Accordingly a landlord and a tenant may agree a greater security of tenure in favour of a tenant. An example of this is where a landlord and tenant agree that the tenancy will be for a fixed term.

Section 58 of the Act

Section 58(3) of the Act provides that a landlord or tenant may not terminate a fixed term tenancy, unless there has been breach of obligations by the landlord or tenant. As noted above, by virtue of Section 26 of the Act, a landlord and tenant are free to agree as part of the tenancy arrangement, more beneficial rights in favour of the tenant, than are provided for in Part 4. Essentially, a greater security of tenure may be agreed in the tenant’s favour. Accordingly, if for example, a landlord and tenant agree that the tenant may remain in occupation for a fixed term of two years, this is a greater security of tenure that has been afforded to the tenant, by virtue of the provisions of Section 58. Section 58 provides that a tenancy referred to in Section 26, “shall be construed as including a term enabling its termination by means of a notice of termination that complies with Part 5 (but, in the case of a tenancy that is for a fixed period, unless it provides otherwise, only where there has been a failure by the party in relation to whom the notice is served to comply with any obligations of the tenancy)”. Accordingly, a landlord of a fixed term tenancy cannot rely on the provisions of Section 34 (e.g. the landlord wants to sell his house) to terminate the fixed term tenancy (unless Section 34 forms part of the Lease Agreement) and similarly a tenant of a fixed term tenancy cannot simply terminate that fixed term tenancy, by giving the requisite notice. As noted above, there  are exceptions to this, which arise where there has been in breach of obligations by the landlord or tenant. In a tenant’s case, he or she may also rely on the provisions of Section 186 to terminate the tenancy, in circumstances where the tenant seeks to assign or sublet the tenancy and the landlord refuses consent.

BREAK CLAUSES

Where a break clause is provided for in a fixed term tenancy agreement, for instance one which may be exercised by the landlord or tenant after an 18 month period, the question arises as to whether the landlord or the tenant can rely on this break clause to terminate the tenancy. As noted above, the parties to a tenancy may agree a greater security of tenure in favour of the tenant than is provided for under Part 4. The rights afforded to a tenant under Part 4, still apply to a fixed term tenancy in the sense that they afford greater rights to the tenant, over and above the fixed term tenancy.

Accordingly, if a landlord sought to exercise the break clause after 18 months, the tenant could rely on his rights under Part 4 to remain in the dwelling for the remainder of the 4 year period. A tenant on the other hand may exercise a break clause provided for in a fixed term tenancy agreement, where it has been agreed between the landlord and the tenant. There is nothing in the Act preventing the tenant from doing so, unlike Part 4 in the scenario where the landlord seeks to terminate the tenancy.

EXPIRY OF THE FIXED TERM

If a tenant wishes to remain in occupation after the fixed term, the tenant must notify the landlord of his or her intention. This must be done not later than one month before the expiry of the fixed term tenancy nor any sooner than three months before it expires. If the tenant fails to do so and the landlord has suffered a loss as a result, the landlord may refer a dispute to the Private Residential Tenancies Board.

Once a fixed term tenancy comes to an end, in circumstances where the tenant remains in occupation and the landlord subsequently wishes to terminate the tenancy, the landlord can rely on the provisions of Section 34 to terminate the tenancy, as the fixed term has come to an end.

“Even though care has been taken in the preparation and publication of this guidance note the Residential Tenancies Board, its servants or agents assume no responsibility for and give no guarantees, undertakings or warranties concerning the accuracy, completeness or up to date nature of the information provided in this guidance note and do not accept any liability whatsoever arising from any errors or omissions contained therein".