An early Christmas gift for landlords
A recent Court of Appeal decision in Spencer v Taylor has provided landlords with much needed clarity. The service of notices requiring possession (section 21 notices) on the expiry of a fixed term assured shorthold tenancy ("AST") where the tenant remains in occupation on a statutory periodic tenancy, is now more straight forward than before.
By way of background, a section 21(1) notice must be used where there is a fixed term AST. A section 21(4) notice must be used where a contractual periodic AST is in place. However, there has been continuing debate as to whether a section 21(1) or a section 21(4) notice should be served where a fixed term AST has expired and the tenant has remained in occupation on a statutory periodic tenancy which arises on the expiry of the fixed term. The issue is of importance as, while both notices must give not less than 2 months' notice, a notice under section 21(4) must expire on the last day of a period of the tenancy.
To date, the sensible approach has been to be cautious and to comply with the additional requirements of section 21(4) for all periodic tenancies.
In the case of Spencer v Taylor, the Court of Appeal was required to consider the validity of a section 21 notice served in respect of a statutory periodic tenancy which, in error, contained a date which was not the end of a period of the tenancy. The Court held that this did not invalidate the notice.
Serving notices in the future:
It is 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. Notice will not need to expire at the end of a period of the tenancy. This will be the majority of cases. The additional requirements for notice under section 21(4) will now only be applicable for the limited number of ASTs where there was no initial fixed term and the tenancy was a periodic one from the outset.