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Where a tenant holds over after the expiry of an existing tenancy, it is an open question whether the circumstances (including any payment of rent) show that the parties had agreed to enter into a new periodic tenancy or some other (lesser) arrangement (ie a tenancy at will). Ordinarily, if one party allows another into possession of their land on payment of rent, then in the absence of any other relevant circumstance the inference sensibly and reasonably to be drawn is that the parties intended to create a periodic tenancy. However, the court has repeatedly found that the presumption of a new periodic tenancy is rebutted where the tenant goes into occupation, or holds over, while the terms of a new contracted-out lease are being negotiated; instead the parties have been held to have created a tenancy at will. This distinction is crucial because a periodic tenancy is afforded security of tenure under Landlord and Tenant Act 1954, Pt II (LTA 1954), whereas a tenancy at will is not.
The leading case is Javad v Aqil, where the defendant (Aqil) was allowed into occupation of business premises in anticipation of terms being agreed for a new ten-year lease. He occupied and paid rent on a quarterly basis before negotiations for the new lease (which had progressed to the stage of sending engrossments of
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