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By J
03/03/2010

Throwing it out there

A friend of NL (who will remain nameless unless he wants to out himself in the comments) has asked if we would post a question about statutory periodic assured tenancies, in order to try and generate a bit of debate (and, perhaps, even work out the answer to this question). We’re always keen to help, so, here is the question. Comments very gratefully received, although, as ever, you get extra marks for showing your working:

Facts

Imagine, if you will, that you have an assured tenancy for a year from 19th January. The agreement provides for a monthly rent payable in advance on the 1st of every month. Upon the expiry of the fixed term, a statutory periodic tenancy arises under s.5, Housing Act 1998.

In that situation, are the monthly periods of the tenancy from the 19th to the 18th or from the 1st to the last?

Why does this matter?

It matters in at least two contexts.

One, obviously, is with regard to the requirement of section 21 (4), Housing Act 1988 that a notice requiring possession served after the end of a fixed term tenancy must require possession after a day which is the last day of one of the periods of the tenancy (although, in practice, one imagines that a notice with a “saving clause” (Lower Street Properties v Jones) would avoid this problem).

The other is in the context of a notice of rent increase under section 13, 1988 Act which is required to propose a new rent with effect from the start of a period of the tenancy starting not less than a minimum period in the future.

This latter situation is more important, since uncertainty in the period could be used to attack (and potentially invalidate) the s.13 notice and lead to an argument that rent has been demanded (and paid) which was not due.

I’ve not provided the reasoning of our correspondent, because I don’t want to influence anyone. I’m sure he’ll join in with comments though.

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.

7 Comments

  1. MP

    think that the start date for any continuation period is the day after the expiry of the fixed term – see s.5(3)(a) HA 1988 and NOT when rent is paid.

    I think that the length of the period is determined by the frequency of rent payments – see s.5(3)(d) and NOT what it says in the original tenancy agreement.

    Baynes v Hall and Thorpe Legal Action November 2005, 21. explains the first of these points – if the fixed term expired at the end of the month and rent is paid monthly but on 15th any statutory period runs from beginning to end of calendar month.

    Church Commissioner for England v Meya [2006] EWCA Civ 821 explains the second of these points – the tenancy agreement stated rent was annual but was actually paid quarterly – so period was quarterly.

    However what Meya did not do is conclude when each period ran from. The Court just notes that the claim was issued on 4 July after the June quarter date. So any decision on when the period ran is obiter – but there isn’t actually a decision on this aspect. All options are covered – 25 June (quarter day); 29 June (quarterly from 30 Dec) and perhaps 30 June (quarterly from 31 Dec).

    I think it is better to follow s.5(3)(a) HA 1988 when calculating when a period runs from than relying on inadvertent consequences in Meya.

    Reply
    • David Smith

      The difficulty with some of the replies here is the presumption that a term of a tenancy must start or finish at the start or end of a period of that tenancy. It is true that there is a new periodic tenancy coming into force the day after the fixed term ends but it would not necessarily be correct to say that this sets the start and end of each of the periods of the tenancy in accordance with that date. Many tenancies have periods that are incompatible with the term. In situations where housing benefit is being paid 4 weekly the periods of the tenancy will be wholly out of sync with a term expressed in calendar months.
      Church Commissioners stated that the correct reading of s5 was that the statutory tenancy was a tenancy “under which the periods of the tenancy are the same as [the periods] for which rent was last payable under the fixed term tenancy.” To give this its natural reading would surely be to link the start and finish dates of each period in the same way as the length of the period.
      This can easily be extended by analogy to the section 13 notice question as originally posed.

      Reply
  2. PS

    Baynes V Hall & Thorpe (2005) Dewsbury County Court 29/5/05 reported in LAG November 2005.

    August 2006 commentary from The Adviser concerning this case “(Baynes V Hall & Thorpe) tells us that the actual date on which rent falls due is irrelevant and makes no difference to the date on which a valid s 21(4)notice should require possession. All that is imported from the fixed term (if any) is the size of the block of time to which a payment of rent relates “.

    On this basis the period of the tenancy would be the 19th to 18th. However, the same article in The Adviser mentions Vodecca Properties v Kirk (2005) Hull County Court, which took the opposite view i.e. the rent due date determines the valid expiry date of s21(4) notice. Simples… (?)

    Reply
  3. David

    Can’t beat the already quoted cases,and the real problem is that the county court cases conflict and as an end user, rather than a legal practitioner, we want to avoid court action.

    Two points, firstly, the day the rent is payable MAY not be the same as the first day of a period for which it is paid and great care should be taken there. It is quite possible to have a rent payable for the month of January etc, but stated to be payable on the 15th of each month. Your original query could leave the periods as the 19th to the 18 but with the rent payable part way through, or move the rental periods (look for a pro rat payment) as the clue

    Secondly, and one simple solution to your enquirers problem, is that if you want to collect the rent in such a way that the rent periods might move, depending on the judges view, then state the start date and end date only and make sure the last day is the last day of a period. To use the date in the original query, Define the tenancy as “From and including 19th January 2010 and to and including 30 June 2010” (or the 31 July 2010 if you prefer. Therefore you have force the two possible interpretations onto the same date and you cannot be wrong.

    Another possibility and one I have become increasingly attracted to over time is the idea of not allowing the tenancy to go statutory periodic. This would be done by granting a fixed term and a periodic tenancy that continues after the fixed term. This has 4 or 5 advantages mostly relating to avoiding the wording contained in section 5 Housing Act 1988 around statutory periodic tenancies and can be used with the previous suggestion to create whatever period you want.

    Reply
  4. Francis Davey

    Its an interesting and annoying problem. I analysed the question (from the point of view of a succession rather than statutory periodic) in:

    “Succession, Notices and the Housing Act” 1988 (2007) 10 Journal of Housing Law 48.

    A copy of my draft is available on request.

    I have had some difficult experiences with the RAC on the date of service of a s.13 so your questioner has my sympathy.

    Reply
  5. Marcin

    My reading of the section is the same as MP’s, for the reasons given in his(?) first two paragraphs. I’d add that if that is the wrong interpretation, then there is an awkward first period to the periodic tenancy, which is shorter than the other periods, as the first period cannot be deemed to have started in the past, so as to end on the correct date, by virtue of s5(3)(b) and (a).

    I say this because by (b) the tenancy is deemed to have been granted immediately before the expiry of the old lease, and by (a) it is deemed to take effect in possession, which I take to exclude an interpretation that the first period took effect in reversion.

    Reply
  6. Ross H

    Hi NL,

    Re: ‘Throwing it out there’

    The ‘throwing it out there’ post seems to me to warrant a relatively simple answer (unless I’m missing something!). The tenancy started on the 19th January, rent was then payable in advance on the first of every month. I would have suggested that the period of the tenancy is from the 1st of a month to the end of a month. In coming to this conclusion I have considered the case of ‘Church Commissioners for England v Meya’ [which was originally set out below but removed for space and copyright reasons by NL – the bailli transcript is here]. I feel that the case is quite clear in the decision making process so I will not even try to replicate it in anyway.

    Moving on to the S.13 Notice. If you were to accept the definition of a period of a tenancy in the Meya case then the use of the phrase ‘period of the tenancy’ would be the same as above, so for the case in question the period of the tenancy is from the 1st of a month to the end and any service of a S.13 Notice would be the same.

    I await to see the reasoned correspondence.

    Regards Ross.

    Reply

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