Court of Appeal makes serving valid Section 21 Notice easier.
The Court of Appeal’s decision in Spencer v Taylor has made it considerably easier for landlords to serve a valid Notice to end an Assured Shorthold Tenancy. The Court found that a Notice requiring Possession served under Section 21(1) of the Housing Act 1988 giving two months notice for the tenant to leave applies to tenancies which have been for a fixed term, even if they are now periodic, thereby avoiding the easily miscalculated date for the tenant to leave “on the last day of the rental period”.
Section 21 of the Housing Act 1988 requires that a tenant must be served with a two month Notice Requiring Possession before the landlord can bring possession proceedings.
There are two forms of Notice under Sections 21(1) and 21(4) Housing Act 1988 respectively.
By Section 21 (1) if the tenant is still occupying the property during the fixed period of a tenancy the Landlord is entitled to a Possession Order if the Court finds the fixed term had come to an end and a two month Notice in writing has been served on the tenant. The Act said that the Notice “may be given before or on the day on which the tenancy comes to an end”.
By Section 21 (4) if however a property is let “on an assured shorthold tenancy which is a periodic tenancy” then the departure or expiry date in the Notice has to be the last day of a period of the tenancy and not earlier than two months after the date the Notice was given and the date specified has to be “not earlier than the earliest date on which a tenancy could be brought to an end by a notice to quit given by the landlord on the same date”.
The perceived wisdom was that if a fixed term tenancy had become a statutory periodic tenancy at the end of the fixed term because it had not been renewed by a new fixed term tenancy then the requirements under Section 21(4) had to be complied with including the extra requirements for the calculation of the specific date as above. If those were not met, the Section 21 Notice is invalid. Many a case has failed for that reason.
In practice if a tenant had been a weekly periodic tenant and paid rent on a Monday then the departure or expiry date in the Notice had to be on a Sunday at least two months after the Notice was served. Because the calculation of the exact date could easily be wrong (especially if the weekly or monthly rental period was different from the contractual weekly or monthly period), many practitioners adopted the practice of simply putting in the form of words from the Act given above for the calculation of the date even if that formula made it difficult for any tenant to identify the date he or she actually had to leave.
Other practitioners put in a specific date and then in the alternative the formula as “a savings clause” in case the specific date was wrong. This created potential uncertainty in the Notice because there could be two dates given within that Notice rendering it invalid. The Courts including the Court of Appeal subsequently accepted that providing the departure or expiry date just by the use of the words of the Act and not giving a specific date did result in a valid Notice.
However Spencer -v- Taylor has changed the interpretation of the use of Section 21 significantly.
In the leading Judgement Lord Justice Lewison overturned the above presumptions. He found that Section 21(1) applied to any tenancy that had been let on a fixed term at some time and if the other requirements of Section 21(1) were satisfied the Court was bound to make a Possession Order. Those requirements are:
1. There was an assured shorthold tenancy which was a fixed term tenancy which had come to an end on its stated expiry date;
2. No further tenancy had come into existence apart from an assured shorthold periodic tenancy and
3. The landlord had given two months Notice in writing.
In Spencer -v- Taylor Mrs Taylor’s fixed term tenancy had come to an end and had become periodic. Mr Spencer had served a Notice on Ms Taylor which ended on a Saturday not a Sunday which was the last day of the rental period. According to the prevailing view that Notice should have been found invalid and the claim for possession failed. The Court of Appeal however decided that the Notice was valid.
Lord Justice Lewison said there was nothing in the legislation stating the landlord may only serve a Notice under Section 21(1) before or on the last day of the tenancy. Section 21(1) specifically refers to a fixed term tenancy being followed by a periodic tenancy so Section 21(1) and Section 21(4) were not mutually exclusive, indeed Section 21(4) specifically refers to it being “without prejudice” to Section 21(1), so if there is any conflict between the two Sections then Section 21(1) prevails.
He also considered whether if the Notice contained a wrong specific date but also the formula of words “as a savings clause” to produce two different departure dates (as it did in this case), it was invalid for uncertainty. He rejected this argument. A reasonable reader of a Notice would understand one date was the primary date and that the other was a backup, would see the notes on the standard form of Notice referring to the last day of a period of the tenancy, would see that the specific date was wrong, and conclude that the formula of words giving the right date would prevail and render the Notice valid.
This is a very significant decision. Regular court users will know numerous cases are dismissed because of technical irregularities with the departure date in Section 21 Notices, even if made unwittingly. This case will enable landlords and their representatives to obtain Possession Orders where there is a fixed term tenancy followed by a periodic tenancy, where a tenant has been given two months Notice but which does not end on the last day of the rental period. It should however be remembered where a tenancy has always been periodic, for example a weekly tenancy as used by Local Authorities and Housing Associations, the extra requirements under Section 21(4) for identifying the departure date will apply and must be met if possession is to be obtained. In addition regardless nature of the assured shorthold tenancy, if a deposit has been received , the Tenant Deposit Scheme requirements must have been met or any deposit received returned to the tenant before the s21 Notice is served.
If you have any queries concerning the matters raised please contact
Jeremy Teall, Partner and Housing Management Team Leader on
020 8567 3477 or e-mail firstname.lastname@example.org