The below decision can be considered good law because as reported on 24 July 2014, permission to the Supreme Court has been refused and so that is the matter settled.

Time has passed since Spencer v Taylor [2013] EWCA 1600 changed everything we thought we knew about section 21 notices in particular when serving during a statutory periodic tenancy. [1]

We’ve read the judgment a few times now so we’ve got it clear in our minds and it’s time to report and make some final decisions as to what advice we will be providing as a result of the changes.

The case

Spencer v Taylor is all about a section 21 notice which a landlord served in 2011 after the fixed term tenancy had ended and a statutory periodic tenancy had arisen. The date on the notice did not expire on the last day of a period of the tenancy but the Court of Appeal said that this didn’t matter because there was no requirement to expire the notice on any particular date as long as it was at least two months in length (and a couple of other conditions met).

Basically this case boils down to the interpretation of section 21(2) which provides (highlight added):

(2)A notice under paragraph (b) of subsection (1) above may be given before or on the day on which the tenancy comes to an end; and that subsection shall have effect notwithstanding that on the coming to an end of the fixed term tenancy a statutory periodic tenancy arises.

Before this case, most commenters understood the word may in 21(2) as referring to the choice of being between on the last day of the fixed term or before the fixed term has come to an end and therefore that the notice may only be served on or before the end of the fixed term tenancy and at no other time. After all, why would it need to be served at any other other time when section 21(4) governed notices to be served after the fixed term had ended?

However, the court of appeal disagreed and said it should be read literally so the term means may be served during a fixed term tenancy but this did not preclude the same notice from being served at some other time (during a statutory periodic tenancy).

When reading legislation, we often say two words are the most important of all namely may and shall. For example, the local authority may pay housing benefit to a landlord where arrears are less than two months but equally they may choose not to. The choice is theirs. Compare with regulation 95 where if arrears are equivalent to 8 weeks, they shall pay direct to the landlord (a few other considerations apply but hopefully you get the point). “May” is a discretionary term and “shall” is mandatory.

To summarise therefore, in Spencer, as section 21(2) states that a landlord may give a 21(1)(b) notice during the fixed term but that is a choice not a restriction (for otherwise it would have used the term shall only), a landlord is not precluded from serving the same notice at any time as long as all the conditions set out in section 21(1) have been met:

  • the first condition is that the assured shorthold tenancy must have come to an end [paragraph 9].
  • next, the court must be satisfied that only an assured shorthold periodic tenancy exists after the end of the fixed term tenancy [paragraph 10].
  • the third condition that must be satisfied is that the landlord has given two months’ notice. Sub-section 21(1)(b) does not require the notice to expire on any particular date nor does it require a date to be specified in the notice [paragraph 11].

What advice now?

Of course it would be nice if we could say that all a landlord needs to do during a periodic tenancy is give a flat 2 months (plus two days for service) notice, such notice not needing to expire on any particular date. As ever though the position is not so simple.

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