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.
Church Commissioners v Meya doesn’t mean what you think it does, I’d argue. The period of the the tenancy was ‘quarterly’ but defined as ‘the usual quarter days’. So that the end of a period of the tenancy wasn’t a strict 3 months doesn’t mean it was based on rent date rather than period from the end of the fixed term. It just means that the periods were taken as the quarter days. Not satisfactory, I’d agree, and as you say, effectively obiter (and in my view not given serious argument).
The only practical position that avoids the potential chaos of ‘rent date’ is period date taken from the end of the fixed term (or the start date of the tenancy).
Hello
Hope you had a good holiday.
Your absolutely right about the period not being exactly 3 months, I was trying to simplify to make the point more visual but didn’t get away with it! I’ve tweaked that part hopefully without distracting from the main point being made.
I have to confess I used to hold the same view as yours that the periods relate to the fixed term and not the rent days. However, I was turned to the dark side of rent days by a number of people over time which was partially due to Church Commissioners above. I think on balance I prefer the dark side, there’s free booze and all sorts over here.
Also, my view is that rent days would be more sensible because in this case, had the landlord expired the notice on the 19th, in order to potentially avoid court costs, the tenant needed to leave by the 19th but will have paid a full months rent to the end of the month which doesn’t seem fair. (I accept a 21(1)(b) can have the same consequence but only if served in a relatively small time window).
It would also be strange in my view if a tenants notice to quit would expire on a different date to that of a landlords section 21 notice.
On the other hand, I totally get the other side of the argument. What if the landlord and tenant imply a new rent date by changing the frequency of rent payments? Or, the periods remain the same but the dates change? As you say, the fixed term will always remain a consistent date of expiry regardless of rent payments so in that sense it would be a good thing. The fixed term view also answers the problem of the periodic tenancy taking effect “immediately”.
I think the frustrating thing about all this is if I put my Guild hat on (as an association representing landlords generally) frankly, we don’t care what the answer is. The only reason we recommend a *Lower Street Properties* type notice is because despite over 20 years of this question being asked we still don’t know the answer and that is the frustrating part! We will probably find evidence of life on another planet first!
Many thanks
Adrian
Just to quickly add an excellent reminder made by @ddortongibson during an email exchange. When we say rent days being connected to the periods of the tenancy, it’s very important to remember we mean when the rent is payable (usually under the terms of the tenancy) and not necessarily when the rent is paid if different.
For example if rent is payable monthly on the 1st of the month but housing benefit is being paid direct to a landlord (a rare thing nowadays), then, the periods would be monthly from the 1st to the last day of the month and not four weekly following the housing benefit.
Just a worthy comment I thought.
Adrian
I would have to respectfully disagree with the author. I would submit section 5 of the HA1988 allows the period of the tenancy to be determined from the last rent payable – not the tenancy start and end dates which are two distinct matters. In the Commissioners case, the periodic tenancy was determined to be quarterly, and the annual rent then continued to be payable quarterly.
Where a rent has always been paid on a calender month basis under fixed term, the periodic tenancy thereafter will be monthly. Payment date of the rent is irrelevant.
To extrapolate the Commissioners judgment where the periodic tenancy start dates align with the rent payment dates for other ASTs leaves uncertainty for the time when the fixed term ends and the new payment “period” starts. In that short time space, does the occupier continue to have a legal interest as a tenant, assuming the agreement rolls over? I would argue yes, and hence the Judge was right to confirm the judgment in Mc Donald v Fernandez [2003] EWCA Civ 1219.
Having read your discussions and views I would like to add that Ms Surace paid me the deposit on the 16th April 2009, signed the contract on the 20th April 2009 but she didn’t move in until the 1st July 2009.
I had no way of contacting her only by mobile which she never answered so I used to send her text messages which she wouldn’t reply to until later in the day or even the following day with excuses that she had been busy and would call me later, which she never did.
First I will deal with the rent due date and the contract date. As stated above the contract was the 20th but she didn’t move in until two and a half months later on the 1st July after I’d finally got fed up waiting for her to move in and start paying rent. I eventually sent her a text message telling her to come and pick her deposit up because we had changed our minds about letting the property to her. I was also getting letters in other people’s names who weren’t supposed to be living there from the DWP so I even thought she might be using our address in a scam to claim money in other people’s names.
I went round to the property after a neighbour informed me that they had moved in with the intention of getting her out but as her children were in there with her and she told me they had nowhere to go I reluctantly give her another chance. I’d like to add that she didn’t have any keys to get into the property because she hadn’t paid any rent at this time only the deposit, so she and her boyfriend broke in by getting someone to drill the lock out or something. Anyway, she signed a receipt agreeing to the rent being paid on the 1st of the month as that effectively was when the tenancy started.
Next. The deposit was paid into a scheme on the 16th April which was the day she gave it to me and she was told about this. She was also told again 4 days later when she came back to sign the contract on the 20th April. I also left all the paperwork supplied by the deposit scheme explaining how it works and all their contact details on the kitchen worktop along with information about the house for when she moved in.
My points are:
1) The contract she signed she never honoured because she never moved in and I was out of pocket. The rent due date was agreed by both parties and not for convenience sake but because she moved in on the 1st of the month.
2) The deposit WAS protected and I did everything I could to make sure she knew all about it and as far as not showing her the Deposit Protection Certificate within the 30 days which was the other stumbling block, if she doesn’t make herself available and I don’t know where she is how can I possibly show it to her, more importantly how can I be found at fault?
The law is an ass and I have learnt that if you can’t afford to pay for justice you won’t get any. I have no money; I rented out our family home to her because we couldn’t sell it due to the recession. I’m out of work at the age of 60 for the first time in my life, I was diagnosed with Lung cancer and had an operation at Bart’s Hospital in December 2012 and I’m not entitled to any benefits because I have ‘assets’ which is the house she’s living in and she owes us over £12,000 in rent for and the courts kept sending her back there. We are about £20,000 in debt for court costs even though the only crime we have committed was to ask for our home back so we could sell it at any price and get out of the debt we’re in so where is the justice.
If the people working in law don’t know the law or cant agree on it it’s because some of them are assholes and some of it has to do with the fact that not all cases are the same and there are circumstances that should be decided using common sense rather than a rigid law that make no allowances.
Just like you all to know that this woman Eve Surace AKA Eve Noskova had a confiscation order put on her for £778,550.00 she owned 6 houses between 1999 and 2010 which she collected many thousands of pounds in rent from and not one penny was declared to HMRC for tax purposes. She was also working in partnership with a guy who was on the run from a bloody double murder he committed in Italy who lived here using an alias. He was also found guilty here of human trafficking, fraud, prostitution and god knows what else. Just Google ‘Noskova confiscations’ to find out a bit about her but there’s a lot more out there as well if you look.
Peter Lappin