Q&As

A guarantee of an assured shorthold tenancy (AST) states that it applies to any extension and renewal of the tenancy. The tenancy term expires and it becomes a periodic monthly tenancy. Can the guarantee continue beyond the end of the fixed term of the tenancy? Or is the guarantor released from its obligations once the tenancy changes from an AST to a periodic tenancy?

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Produced in partnership with Emma Preece
Published on LexisPSL on 14/05/2020

The following Property Disputes Q&A produced in partnership with Emma Preece provides comprehensive and up to date legal information covering:

  • A guarantee of an assured shorthold tenancy (AST) states that it applies to any extension and renewal of the tenancy. The tenancy term expires and it becomes a periodic monthly tenancy. Can the guarantee continue beyond the end of the fixed term of the tenancy? Or is the guarantor released from its obligations once the tenancy changes from an AST to a periodic tenancy?
  • Extension
  • Renewal
  • Conclusion

A guarantee of an assured shorthold tenancy (AST) states that it applies to any extension and renewal of the tenancy. The tenancy term expires and it becomes a periodic monthly tenancy. Can the guarantee continue beyond the end of the fixed term of the tenancy? Or is the guarantor released from its obligations once the tenancy changes from an AST to a periodic tenancy?

Under section 5(2) of the Housing Act 1988 (HA 1988), upon the expiry of a fixed-term assured shorthold tenancy (AST), a periodic tenancy arises on the same terms and conditions. This does not apply if the tenancy comes to an end by order of the court or surrender or other action on the part of the tenant.

It is assumed for the purpose of this Q&A that HA 1988, s 5(2) applies to this tenancy. However, if that is not the case and the tenancy has been varied, the guarantee may have been released. A guarantee can be lost where changes are made (expressly or by conduct) to the underlying contract, unless the guarantor consents, or the variation is ‘self-evidently insubstantial or non-prejudicial to the guarantor’ (Holme v Brunskill).

It is also assumed that the wording of the guarantee is clear and unambiguous.

The extent of the guarantor's liability is a question of construction of the contract of guarantee. As a general rule, the

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