Thanks to the nearlylegal blog for this one (who in turn offer thanks to Legal Action’s ‘Recent Developments in Housing Law’ , Edwards Duthie and Liz Davies for the case).

In Lappin v Surace, Romford County Court 13 June 2012, Mr Lappin let a property to Ms Surace on an assured shorthold tenancy for 12 months from 20 April 2009 to 19 April 2010. A deposit of £1,500 was paid which the landlord protected but, the landlord failed to provide the prescribed information as required by section 213 Housing Act 2004 and The Housing (Tenancy Deposits) Prescribed Information Order 2007.

The tenancy continued as a statutory periodic tenancy. On the same day as the tenancy started, a section 21 notice was served by the landlord and a further two section 21 notices were served whilst the tenant remained in occupation (both expiring on the last day of a month with no saving clause, namely 28 February 2011 and 31 October 2011).

The landlord issued proceedings and a possession order was granted. The court found the deposit was protected and that it wasn’t relevant if the tenant knew that it was. In addition, the court found that the rent was payable on the 1st day of each month and because the notices expired the day before the rent was due, the section 21 notice (presumably the last one served) was valid.

The tenant appealed and HHJ Wulwik allowed the tenants appeal.

The section 21 notice that had been served at the commencement of the tenancy (on 20 April 2009) was invalid because no prescribed information had been served by that date and the Deputy District Judge had failed to consider this.

The court had no issue with the tenant being required to pay rent on a different date to the tenancy start date and on this tenancy, the rent was paid on 1st of the month. However, according to HHJ Wulwik, because the fixed term of the tenancy ended on the 19th of a month, the periods of the tenancy were therefore from 20th to the 19th of each month and the subsequent section 21 notices should have expired on the 19th of a month and not the day before the rent was due.

The possession claim was therefore dismissed.

Comment

It is quite right that possession should have failed on the first notice because it was clearly shown prescribed information had not been given. It is unclear whether prescribed information had subsequently been given but assuming it had been, the periods of the tenancy element to this case is of significant importance.

It must be said from the outset that this case is only county court so not binding.

I don’t think I can agree with the courts view on the periods of the tenancy.

Section 5 Housing Act 1988 provides that a statutory periodic tenancy follows immediately on the coming to an end of a fixed term assured shorthold tenancy. The periods of the tenancy “are the same as the last rent payable”.

A section 21 notice served during a periodic tenancy must expire “after the last day of a period of the tenancy”.

Obviously we don’t know from the report how the rent payable on the 1st of the month arose. If for example the rent is shown on the tenancy agreement as being payable on the 19th of the month but the tenant was always late and paid on the 1st then fair enough, the last day of a period of the tenancy would be the 19th.

However, in this case it seems quite certain that the rent days were the 1st of the month so we will assume this was formally created by reference to the tenancy agreement itself.

We hold the view that the last day of a period of the tenancy, (when a section 21 served during a periodic tenancy must expire) is calculated by reference to the rent days and not to the fixed term. In our view, the landlord in this case was quite right to expire the notice “after” the day before the rent was due so the last day of the month and not as the court has stated, the 19th.

Not only do we think that because it’s our view it was Parliaments intention to bring the common law position of serving a notice to quit into the assured shorthold tenancy regime but in Church Commissioners for England v Meya [2006] EWCA Civ 821 the Court of Appeal calculated the expiry date of a notice with a saving clause by reference to the rent day and not to the fixed term. In that case, the fixed term did not match the rent days like in the Lappin case here.

Although I will accept in Church Commissioners, the point was obiter so not binding authority for the proposition of the notice expiry dates, it was nonetheless clearly thought through in my view.

In Church Commissioners for England v Meya, the tenancy was set to commence from 1 January 2004 to 30 December 2004 (so one year less one day as it should have ended 31 December) and it was commented “… These anomalies show that not a great deal of concentrated thought was put into the agreement …”. The rent was payable “in advance on the usual quarter days” so therefore the rent was payable on 25 March, 24 June, 29 September and 25 December. The first payment was to be apportioned accordingly.

When the statutory periodic tenancy arose “immediately” at the end of the fixed term, according to the Lappin case above, the periods would have started from the 31 December 2004 and ran for the same length as the last rent that was payable during the fixed term of the tenancy and therefore the rent days would not align with the ending of the fixed term.

“… one has to ascertain first what payment of rent last fell due, in other words, what was the last payment of rent the respondent was obliged to make [under the fixed term], and then secondly of course, ascertain the period covered by that last payment.” [para 21 Church Commissioners for England v Meya [2006] EWCA Civ 821].

However, in Church Commissioners they calculated the expiry date of the section 21 notice by reference to the rent day and not to the periods following the end of the fixed term:

“… It will have been observed that if the landlord had to give a quarter’s notice requiring possession, then this notice was good and the landlord would be entitled to claim possession after the June quarter day …”

This was not possible for the Court of Appeal to say had it calculated the date by reference to the fixed term as a base line as was done in the Lappin case because the two dates were different. I would therefore respectfully submit that when calculating an expiry date for a section 21 notice, reference should be made to when the rent is “payable” under the terms of the tenancy and not to when the fixed term ends.

Of course, if the fixed term and rental periods are completed correctly in the tenancy agreement, both rent day and fixed term calculations should arrive at the same date. Also, as long as our members use our section 21 notice which is based on the decision of Lower Street Properties Ltd v Jones [1996] 2 EGLR 67 so no actual calendar date is required, you won’t go far wrong because as long as proceedings are not commenced too soon, it’s impossible to get the date wrong.

 

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