A statutory periodic tenancy arises at the end of a fixed term Assured Shorthold Tenancy (“AST”) under section 5(2) of the Housing Act (“HA”) 1988. There has been debate amongst practitioners as to which type of section 21 notice should be served where a fixed term AST has expired and the tenant has remained in occupation on a statutory periodic tenancy under section 5(2) of the HA 1988.
It was unclear if the landlord should serve a notice under section 21(1) or section 21(4). The practical difference is that a notice under section 21(1) does not have to expire on a particular date, whereas a notice under section 21(4) must expire on the last day of a tenancy period specifying that possession is required after that day. Although the wording of section 21(1)(a) appears to anticipate that the notice may be served during a statutory periodic tenancy and there is nothing in section 21(1) to suggest otherwise, the cautious approach has been to comply with the additional requirements of section 21(4), in case the courts take the opposite view.
In the case of Spencer v Taylor [2013] EWCA Civ 1600, the Court of Appeal considered the application of sections 21(1) and 21(4) of the HA 1988 to a notice which gave both a fixed date and a formula resulting in a different date. In 2006, L granted T a six month AST beginning on a Monday. The rent was payable weekly and on the expiry of the fixed term, a weekly statutory periodic tenancy arose, meaning that the end of the periodic tenancy would have been on a Sunday.
On 18 October 2011, L gave notice to T requiring possession of the property “(a) after 1 January 2012 or (b) at the end of your period of tenancy which will end next after the expiration of two months from the service upon you of this notice”.
1 January 2012 was a Saturday and was, therefore, not the last day of a period of the tenancy. Two months after the service of the notice would have been 18 December 2011 and the next Sunday after that was 23 December 2011.
The Court of Appeal decided that the notice was valid. On a straightforward reading of sections 21(1) and (2), the case was governed by those sections. Section 21(1)(b) did not require the notice to expire on any particular date nor did it require a date to be specified in the notice. L gave notice on 18 October for the following 23 December or 1 January and that was more than two months’ notice.
Comment
Landlords will welcome this decision. It resolves the previous uncertainty as to which type of section 21 notice should be served once a fixed term AST has expired and the tenant remains in occupation on a statutory periodic tenancy under section 5(2) of the HA 1988.
As a notice under section 21(1) does not have to expire on a particular date, this will make service of notices easier. It would appear to be no longer necessary to comply with the additional requirements of section 21(4) if the fixed term tenancy has expired and the tenant is now in occupation on a statutory periodic tenancy.
It seems that section 21(4) notices will now only be required for ASTs where there was no initial fixed term and the periodic tenancy was granted contractually from the outset, for instance, tenancies found in the public sector.
Michael Davies is an Associate in Stephen Scown LLP’s dispute resolution team in Exeter. He is an expert in property and land disputes and advises both landlords and tenants (commercial and residential) on a wide variety of matters. To contact Michael, please call 01392 210700 email solicitors@stephens-scown.co.uk or visit www.stephens-scown.co.uk