Taylor made remedy to Landlord headaches

Court of Appeal simplifies Section 21 Notices

Section 21 notices provide Landlords of properties let on an assured shorthold tenancy ("AST"), with a mechanism for recovering possession without needing to provide any reason or show any fault on the part of the Tenant.

Whilst there are no prescribed forms, there are 2 types of section 21 notice. The first arises out of Section 21(1) Housing Act 1988 which states that on or after the coming to an end of a fixed term AST, a Court shall make an order for possession of a property if it is satisfied that

• the AST has come to an end and no further assured tenancy has come into existence; and
• the Landlord has given the Tenant not less than 2 months' notice in writing that he requires possession of the property.

Section 21(2) states that notice under Section 21(1) "may be given before or on the day on which the tenancy comes to an end...". Such a Notice has long been referred to as a Fixed Term Notice with standard practice being to use the Fixed Term Notice only during the fixed term of the AST.

The second form of notice, known as a Periodic Notice, arises out of Section 21(4) Housing Act 1988. That section provides that the Court shall make an order for possession of a property let on an AST that is a periodic tenancy if it is satisfied that the Landlord has given notice in writing to the Tenant stating that after a date specified in the Notice being the last day of a period of the tenancy and not earlier than 2 months after the notice was served.

It had, until December 2013, been widely believed that after the expiry of the fixed term only the Periodic Notice could be issued by a Landlord. The requirement for the date in the Periodic Notice to be the last day of the period of the tenancy has for many years caused problems for a number of Landlords who have incorrectly calculated that date and subsequently been told that their notice is invalid by a District Judge, shortly before the same judge dismisses their possession claim. A Landlord is then faced with having to serve a new notice, which will not have effect until at least 2 months down the line, and having to write off the costs and time expended in seeking to recover possession based on the invalid notice.

As a result of a Court of Appeal judgment in the case of In Spencer v Taylor, however, the majority of Landlords will no longer need to worry about calculating the last day of the periodic tenancy. If the fixed term has expired and the Tenant remains in occupation, provided the Landlord serves upon the Tenant at least 2 months' notice in writing, the notice will be valid.

The background to the case of Spencer v Taylor is as follows. Mr Spencer granted an AST to Miss Taylor in relation to a property in Chesterfield. The AST was for a 6 month fixed term commencing on Monday 6 February 2006 with rent paid weekly. At the end of the fixed term, a weekly periodic tenancy arose, running from a Monday to the following Sunday.

On 18 October 2011, Mr Spencer served a section 21 Notice upon Miss Taylor requiring possession of the property

• "after 1 January 2012 (being a Saturday); or
• at the end of your period of tenancy which will end next after the expiration of 2 months from the service upon you of this notice" (this is a standard 'saving provision' aimed to guard against the date in the notice being incorrect)

After His Honour Judge Godsmark QC held that the notice was valid and granted a possession order to Mr Spencer. Miss Taylor appealed. She asserted that the date in the notice (1 January) was a Saturday and as such, did not expire on the last day of a period of the tenancy, which was a Sunday. Miss Taylor also claimed that taken together, the saving provision and the reference to 1 January 2012 created uncertainty, thereby rendering the notice invalid.

In a unanimous decision with the lead judgment being provided by Lord Justice Lewison, dismissed the appeal, stating that when serving a Section 21 Notice, a Landlord need only satisfy the requirements of Section 21(1), those being the Landlord gives the Tenant not less than 2 months' notice in writing that he requires possession of the property.

Periodic notices will now only be necessary where there has been no fixed term and instead a periodic tenancy was granted at the outset. A word of warning, however. If an AST has been entered into after 6 April 2007 and the Tenant paid a deposit, if the Landlord fails to lodge that deposit in an appropriate Tenancy Deposit Scheme and/or fails to comply with the notification requirements relating to such deposits (see my previous articles Tenancy Deposit Scheme and Falling Foul of the Tenancy Deposit Scheme), the Landlord will be unable to rely upon the Section 21 procedure.

Rollits' Property Dispute Resolution Team, headed by partner Ralph Gilbert, has a wealth of experience dealing with Section 21 Notices and assisting residential Landlords in not only resolving problems that may arise from their legal duties and obligations but also providing proactive advice to minimise the risk of any issues arising in the first place. If you have any contentious property related queries, please contact Ralph Gilbert, partner and Head of the Property Dispute Resolution Group on 01482 323239 or at moc.s1721141404tillo1721141404r@tre1721141404blig.1721141404hplar1721141404.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.