“All clear” on Section 21 Notices to Quit

20 August 2014

A 'Section 21 Notice to Quit', is a notice which operates under section 21 of the Housing Act 1988 (the 1988 Act). It is a notice a landlord can give to a tenant to regain possession of a property at the end of an Assured Shorthold Tenancy (AST).

The Supreme Court has refused permission to appeal in the case of Spencer v Taylor [2013] EWCA Civ 1600. This case sought to clarify the position in respect of service of s.21 notices for fixed term tenancies but upset many.  Now the position has been affirmed and it looks set to stay.

The Court of Appeal case

The Court of Appeal’s decision in Spencer v Taylor threw the cat amongst the pigeons and altered the settled and accepted practice relating to the service of notices under s.21.

In brief, on 6 February 2006 Spencer (S) granted Taylor (T) an AST for a fixed term of 6 months. Rent was payable weekly (the Monday of each week). At the end of the fixed term T held-over, resulting in a statutory periodic tenancy. The period of the tenancy being Monday to Sunday. On 18 October 2011, S served on T a notice in accordance with s.21(4)(a) of the 1988 Act to expire on 1 January 2012 (a Saturday).

The traditional view of the s.21 regime requires where notice was served during the fixed term of the tenancy, s.21(1)(b) of the 1988 Act applied. Where notice was given after the commencement of a statutory periodic tenancy it would be necessary to comply with the provisions of s.21(4)(a) of the 1988 Act, which would result. On this basis it was considered S’s notice was defective but this was not the view shared by the Court.

S.21(2) of the 1988 Act provides that a notice under s.21(1)(b):

may be given before or on the day on which the tenancy comes to an end”.

After a careful consideration it was held that the words contained in the sub-section were permissive and so one is not precluded from serving a notice under s.21(1)(b) after the expiry of the fixed term.

S’s notice also included the usual saving provision in respect of the date of expiration. T argued that this rendered it defective because it gave more than one date on which possession was required and thus lacked certainty. The Court dismissed this argument and concluded that if the reasonable reader of a notice would understand that one date is the primary date and the other date is a fall back, in this case by reference to the notes accompanying the notice, the fact that there were two dates would be no reason hold the notice to be invalid.

It seemed at the time of this judgment that as the tenancy was at its commencement granted for a fixed term, giving two months’ notice in writing (in accordance with s.21 (1) (b)) would suffice to bring the tenancy to an end even if it has subsequently become periodic.

The current position 

There are four differences between s.21(1) (b) and s.21(4) (a) notices. A s.21(4) (a) notice must:

  • refer to s.21 of the Housing Act 1988;
  • specify a date ‘after’ which possession is required;
  • run out on the last day of a period of the tenancy; and
  • run out ‘after’ the date given in the notice.

On the basis that the Court of Appeal case now stands as good law, s.21(1)(b) notices may be served providing 2 calendar months’ notice in the case of both fixed term tenancies and/or where a fixed term tenancy has expired and a periodic tenancy follows thereafter.

Crucially, this means that a standard s.21(1)(b) notice can be served at any time, provided that there has at some stage been a fixed term tenancy.

As set out above, historically, landlords could only serve a s.21 (1)(b) if there was a fixed term tenancy. If the tenancy had expired and a subsequent statutory periodic tenancy had followed (as is usual and customary in the rental market) a landlord was obliged to send the more onerous s.21(4)(a) notice. Therefore, s.21(4)(a) notices now will solely be used in cases where the tenancy has been a periodic tenancy from the start.

Practically speaking this will be music to landlord’s ears! As explained above, there will be limited use of s.21(4)(a) notices going forward. But more importantly the position has been clarified to the benefit of landlords and their agents.
Tenants may consider the decision to be ‘landlord friendly’, however realistically it also removes any confusion for them. Tenants will now always be clear of the notice requirements they are entitled to, especially even after a fixed term tenancy has expired on the basis that the position is now consistent. 

Outcomes and tips for landlords

Landlords should ask themselves - is there or has there ever been a fixed term tenancy?

If so, you can use the simple and straightforward process of serving a s.21(1)(b) notice providing it allows for:

  • At least two months ‘notice; and
  • Is in writing.

Save your energy and no longer worry about:

  • The periods of the tenancy;
  • Day the notice needs to expire on (as long as it is more than two months from the date it was served); and
  • How long the original tenancy was.

As an aside when dealing with ASTs always be sure to protect the deposit and serve all the documentation required by and referred to in the Prescribed Information or you may find yourself in hot water for reasons other than service of the relevant notice!

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