Ending it all. Or not.

A question on tenant’s notice to quit, to keep minds occupied during the silly season.

Fareham BC v Miller [2013] EWCA Civ 159. (our report here) states in no uncertain terms that the common law position is that a landlord’s notice to quit is irrevocable once served.

30. As a matter of law it was impossible for the Council to revoke the notice to quit. Once served it was effective to determine the tenancy according it its terms. Even if the Council had made an irrevocable decision not to rely on the notice the tenancy would still have come to an end: see Tayleur v Wildin (1868) LR 3 Ex 303. [...]

Tayleur v Wildin concerned waiver of notice served by a landlord. The waiver took place before the expiry of the notice period. It states that the effect of the waiver/withdrawal is not that the tenancy continues but that a new tenancy arises as of the expiry date of the notice. This was upheld in Freeman v Evans [1922] 1 Ch. 36.

I have been told that this is the largely accepted position in commercial lets. Waiver/withdrawal of Notice creates a new tenancy from date of expiry of notice (similarly with waiver of notice served to exercise break clause). Eg see this note on the SDLT site (although that is saying SDLT would not be applied).

Now, what I had thought about tenant’s notice to quit is as per Defending Possession Proceedings (Luba QC, Gallagher etc.) at 2.26 of Seventh Edition, re tenant’s notice:

A valid notice to quit will end the tenancy on expiry.

Thus, it was of course possible for the landlord and tenant to agree to waive the notice prior to expiry and for the tenancy continue.

But the common law position set out in Fareham v Miller applies equally to tenant’s notice to quit as it does to landlord’s.

Per Kelly CB, Tayleur v Wildin:

But it is clear that, whether the notice to quit is given by the landlord or the tenant, the party to whom it is given is entitled to insist upon it, and it cannot be withdrawn without the consent of both. If that is so, then the consent of the parties makes a new agreement, and if there is a new agreement there is a new tenancy created to take effect at the expiration of the old tenancy. [our emphasis]

So, any waiver of tenant’s notice would give rise to a new tenancy on the date of expiry of the notice.

The impact of this could be significant, particularly on private tenancies. Any guarantor would fall away (precisely the issue in Tayleur). (Though would it be a ‘replacement tenancy’ for s.21(7) HA 1988 purposes, if an AST?). And after Superstrike, the deposit implications are obvious. For social tenants, RTB wouldn’t be affected (it is aggregate time) but previous rent arrears would not be collectable or ground gor possession, just a debt, and possibly succession rights would revive. I am sure there are plenty of other implications that I haven’t had time to think about.

Also obviously, this is the common law position, and would not affect statute – so an assured (or AS) tenancy would exist until eviction, regardless of landlord’s NTQ. But tenant’s NTQ seems to me to be a more problematic question, and still largely common law..

I have probably got something hideously wrong, or overlooked something, but no-one has yet pointed me to anything conclusive.

Thoughts?

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Posted in FLW article, Housing law - All, Possession and tagged .

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts, and still is Nearly Legal on Google +

26 Comments

  1. All interesting stuff. But there is no minimum 6 month term on an AST. Merely a limitation on using a s21 notice until the tenancy or, if it is a replacement tenancy, the original tenancy, is 6 months old. A “replacement tenancy” is a tenancy that follows on from an AST and under which the L & T & the premises are the same. See ss (5) (6) and (7) of the amended s21.

  2. Giles I agree entirely.

    I think the position of the landlord serving the section 21 notice (not a notice to quit as section 5 prohibits a notice to quit) is perhaps one of the most interesting. In its latest form section 5 say tenancy ends on enforcement of the court order or some other action of the tenant. If the notice to quit agreement to revoke applies from the agreement is it not true to say that it is not the notice to quit that ended the tenancy but the surrender by operation of law when the new tenancy was agree (the agreement “you can stay” being the creation of a new tenancy)?

    On that basis is it not reasonable to presume the same would apply to the section 21? agreeing to revoke would be the agreement for a new tenancy (some other action on the part of the tenant in agreeing a new tenancy)?

    • No, this would have no effect on s.21 notice at all. That is statutory and this is about common law NTQ. In any event, s.21 notice doesn’t end the tenancy. It continues until eviction.

      • OK, I can see the difference between the notice to quit (ends tenancy) an section 21 (does not end tenancy), but I was interested in your comment that the renewal took place on the date the agreement to revoke the notice was made (IE quite possibly before the NTQ expired ending the tenancy). Essentially the new agreement took over before the NTQ had any effect (hence why I wondered if it might apply to the section 21 in the same logic.

        I don’t know of any cases around the point but was just interested.

  3. S21 is a complete red herring and I’m sorry I mentioned it here. It is not contractual. It merely allows the landlord to apply to the court for possession and for the court to make an order for possession provided that he jumps through the relevant hoops. The notice must end after any fixed term has ended and must otherwise be of at least 2 months ending at the end of a a tenancy period (ie twice the common-law period of one month for a monthly tenancy) but otherwise it is non-contractual. It doesn’t require L to issue proceedings and if he doesn’t the tenancy continues as before.

    Giles raised interesting contractual points on the withdrawal of notices to quit and I’ve just diverted attention from them. I’m sorry.

  4. Giles you don’t mention it but I presume it is fair to say you only end up with a new agreement if the notice served is valid. In other words, if a tenant served a 14 days notice to quit on a monthly rent then this would not create the regrant as the notice would not have ended the original tenancy?

  5. You are right: in the commercial sphere it has long been accepted that a break notice cannot be withdrawn once served (based on Tayleur v Wildin). Service of a break notice is like pulling the pin out of a grenade. It’s a process that cannot be stopped once started.

    One of the greatest concerns of a successor landlord (ie someone buying the property as an investment) is whether a break notice may have been served in the past and then waived, with the result that the lease under which the tenant is apparently occupying is not in fact the current lease. The greatest concern is, as you say, the loss of any guarantor. There used to be a concern that a tenancy that was an “old tenancy” (not a defined term actually) under the Landlord and Tenant (Covenants) Act 1995 might have been re-granted as a “new tenancy” under that Act, but that concern has largely disappeared since nearly all commercial leases are now “new tenancies”.

    • I do like the anaolgy of service of a break notice is like pulling the pin out of a grenade.

  6. It has never made sense why a Notice cannot be withdrawn at any time before expiration because the Notice does not come into effect until the expiration date.
    I wonder how the following is relevant?
    Davies v Bristow [1920] 3 K.B 428 Shearman J says: ‘A notice to quit can be withdrawn at any time before the date fixed for the termination of the tenancy’. Davies has been approved by the Court of Appeal in Clarke v Grant [1949] 1 All E.R 786.

    • Hmm. In Davies v Bristow, Lush J says:

      When once the notice is given and received the term automatically comes to an end upon the expiration of the notice, and the position is then precisely the same as it would be if the original lease had provided for the determination of the term on the date mentioned in the notice to quit. There is no room for any election by the landlord. The landlord and the tenant may agree that a new tenancy shall be created on the old terms as to rent, &c, and that is what, in effect, they do when they agree to treat the notice to quit as inoperative, or, to use the expression which is used so often – that they agree to waive the service of the notice to quit. The agreement for the new tenancy must be proved. It must be shown that the parties were ad idem as to the terms.

      This seems to sit with the Tayleur approach.

      Shearman J (in a brief concurring judgment) says:

      A notice to quit can be withdrawn or abandoned before the time fixed for the termination of the tenancy. After the time has expired the lease has come to an end, and a landlord can no more waive his notice to quit than he can waive the expiration of time. In my judgment, the “waiver of notice to quit” merely means that the parties have arrived at a new agreement, and that, like any other new agreement, must be proved either by conduct or by express writing in the usual way in which any agreement is proved.

      This is harder to reconcile. The line about withdrawal is, in the context of the Judgment, strictly obiter, though.

      Clarke v Grant has nothing on that point at all. It simply approves Davies in distinguishing waiver in forfeiture from the position on a notice to quit, nothing about withdrawal of notice.

      So the Shearman J line is interesting, but is obiter and seems to be per incuriam.

  7. actually, i was interested to know what was/is the non secure tenancy – Just to confirm it?
    Licence? Fixed Term agreement?
    presumably anything other than a statutory secure/assured (AST) tenancy, yes?

    • For landlord’s notice to quit, could be a non-secure tenancy, contractual tenancy, or anything outside the statutory provisions.

      But as far as tenant’s notice to quit goes, this would apply to just about any tenancy, to the extent that they are primarily governed by common law . So would apply to AST, assured, secure…

  8. interesting stuff, great for pondering time on the train

    [Glad you thought so, Jennifer, so you won't mind that I have taken out the link to a certain 'boutique' firm's website and emailed the partners to complain about comment spam. NL]

  9. Pingback: Landlord Law Blog roundup from 12 August

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