By D
06/09/2010

Period? Which Period?

Suvini v Anderson, Staines County Court, 13 August 2010

It is well known that notices under section 21(4)(a) of the Housing Act 1988 must give notice to a tenant that “after a date specified … being the last day of a period of the tenancy … possession of the dwelling-house is required”. This is an issue that has been before appellate Courts a surprising number of times. Most notably in MacDonald v Fernandez [2003] EWCA Civ 1219.

In Church Commissioners v Meya [2006] EWCA Civ 821, the Court of Appeal made a close reading of section 5 of the Act and held that it should be construed as reading that the periods of a statutory periodic tenancy created by that section “are the same as [the periods] for which rent was last payable under the fixed term tenancy.” In short, then, if I pay the rent under the fixed term quarterly then once the tenancy becomes periodic by way of s5 the periods remain quarterly, irrespective as to how rent was then paid. This leaves open two key questions:

  1. What happens if the tenancy becomes periodic by way of contract and section 5 is not involved? and
  2. What happens if the rent payment day is changed during the fixed term? Does this alter the start and finish dates of the periods of the tenancy when the tenancy becomes periodic?

The first question will have to await another day because it was the second of these questions that came before DJ Batcup in Staines.

In this case S had let a property to A from 18th August 2007 to 17th August 2008 with a rent of £1,200 payable on the 15th August 2007 and 15th January 2008. A further tenancy was granted for another 12 months from 18th August 2008 to 17th August 2009, rent being payable bi-monthly in advance starting on the 11th August 2008. After August 2008 the tenancy continued on a periodic basis. A notice under section 21(4)(a) was served on 1 April 2010 seeking possession “after 17 June 2010 or, if later, the day on which a complete period of your tenancy expires next after the end of two months from the service of this notice.”

Basically if the periods of the tenancy were as set out in the tenancy agreement then possession should be given whereas if it was accepted by the Court that the start and finish dates of the periods had been changed by the changed payment provision then the notice would have to rely on its saving provision and could not therefore expire until 10 August. Proceedings were issued before 10 August and so this position would be fatal to possession proceedings.

Ultimately DJ Batcup came down on the side of ruling the notice valid and awarded possession.

This case actually raises a serious question as to what a period actually means. Following DJ Batcup’s view there is an indirect correlation between the payment dates and periods. In other words a periodic tenancy can run from period to period without there being a presumption that rent is due at the start of the period for that period. This is hard to credit and certainly runs counter to the usual rule at common law. The reasoning also runs counter to that of the Court of Appeal in Tadema Holdings v Ferguson where it was held that an agreed change in payment dates did change the periods of the tenancy for the purposes of a s13 rent increase notice. However, in Church Commissioners the Court expressly rejected the idea of a “symmetry between the statutory provision and the common law rule” when considering the length of a period.

We understand that this matter has been appealed to a Circuit Judge so there will be a further installment at a later date.

With thanks to James Browne of Lamb Chambers

D is a solicitor specialising in landlord and tenant matters with a London firm.

9 Comments

  1. Adrian Thompson

    Hello

    Do you have a transcript available?

    Many thanks

    Adrian

    Reply
    • David Smith

      Adrian,

      Not at this time

      Reply
  2. MarkRay

    Hi, Can’t the 2 questions be answered directly from s5?
    1. The section only relates to statutory periodic tenancies arising under the act – s5(2)”…his right to possession shall depend upon a periodic tenancy arising by virtue of this section” …(3)(a)”periodic tenancy.. taking effect immediately on the coming to an end of the fixed term”. If it’s a contractual periodic tenancy then the issue does not arise, the periods of the tenancy are as per the contract.
    2. s5 (3)(d) “…the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy..”. So it’s whatever was the last arrangement (bi-monthly in this case)prior to the expiry of the fixed term(see also para 21 of the judgement in Meya).

    Reply
    • David Smith

      Mark,

      Good points.
      1. Not all Periodic Assured tenancies arise by way of contract. The vast majority (including in this case) arise by way of statute so s5 does apply. However, the distinction is increasingly important, especially after London District Properties Management Ltd & Ors v Goolamy & Anor and has not been explored enough.
      2. This is not what Meya says. Meya says that the length of the periods are the same as those for which rent was last paid under the fixed term. It says nothing about when those periods should start and finish. The common law position is that the start and finish dates should coincide with the rent payments but Meya also questions that doctrine in relation to the Housing Act 1988 (albeit obiter) so the point is very much up for argument.

      Reply
  3. Francis Davey

    I am not sure I agree entirely with your analysis David.

    There are three separate questions:

    (1) how long are the periods of a tenancy?
    (2) when do they run?
    (3) on what date, referable to any period, is the rent for that period payable?

    Meya seems clear authority that s.5 statutory periods are the length of the periods by which rent is calculated in the preceding contractual tenancy. i.e. “payable quarterly in advance” creates quarterly periods.

    The second question is more difficult. How does one avoid fractional periods? If the statutory tenancy is not aligned with a new period what then? A fractional period is an abomination – not least because rent is not apportionable.

    Most statutory tenancies will begin on a date immediately after a period of the preceding tenancy ended and, in most cases, that will also be the date on which a new *Meya* period would begin in a natural way. But this will not always be the case – particularly where the statutory tenancy arises other than via s.5, eg on succession (where identical wording is used).

    So there is an argument about the *alignment* of new periods.

    It seems to me that if you start taking into account the dates on which payment is due (rather than the periods for which it is due) then madness follows fairly swiftly. Fractional periods will be the norm (or at least much more common) and there is no principled reason for reading s.5 as having anything to do with payment dates.

    I challenge your assertion that start and finish dates should coincide with rent payments at common law. Authority!

    Reply
  4. Daniel

    I take it the main problem in such cases is the date to put on the section 21 notice, as its not entirely clear when the tenancy comes to an end. The way around this is simply to rely on a saving clause wording and not put in any date at all.

    Reply
  5. MarkRay

    Daniel, there was a saving clause in this case but, if the landlord had needed to rely on it, it would, as David pointed out, have been fatal to his claim.

    The judge decided that the periods of the tenancy followed directly on from the fixed term. It was a bimonthly (because that was the last frequency of payment during the fixed term) statutory periodic tenancy commencing 18 August 09. Notice issued 1 Apr 10 to expire 17 June 10 was therefore deemed correct.

    If the judge had decided that the start and end dates of the periods of the tenancy should correspond to the payment dates, then 17 June was wrong and the landlord would have had to rely on the saving clause. After 17 June (the date specified in the notice) the next end of a period of the tenancy would be 10 Aug. But the claim was brought before that date so the judge would have dismissed it – so the saving clause wouldn’t have saved him.

    Of course, and this may be your point, if the landlord had thought he needed to rely on the saving clause he would have simply issued the claim after 10 Aug.

    Reply
  6. Daniel

    Yes, if in doubt a.) just use the saving clause (and do not specify a date at all) and b.) leave it until the latest date possible before issuing

    Reply
  7. David

    If this had been a typical monthly tenancy the expiry date would be wrong and proceedings had been commenced after 10th August it would still have failed as actually this wording contains a conditional saving clause. Ie the saving clause can only be use “if later” than the quoted date. If served on 1 April, add two months 1 June and the next end of a period (using the period date of the 10th) would be the 10th June. The date quoted was the 17 June and the 10th of June fails the test of “if later”. Moto of the story, don’t use the “if later” phrase.

    Church Commissioners v Meya contains a similar lucky break as the rent was quarterly the saving clause only allowed for a period ending after 2 months when it should have been at least 3. With the dates used it worked out but it was more by luck than good judgement.

    Good to see a discussion on this topic, shame we end up with the outcome that the law does not make it clear which way to do this. I accept you can use the Lower Street Properties v Jones notice with just a saving clause but you still have to know how to work out when to go to court and make sure the saving clause is long enough.

    In Francis’ comments I agree 1) is dealt with in Meya and 3 is a non starter. For 3), we usually say the rent is payable in advance but it could be paid any time in the period by agreement so the date it is due is in no way relevant.

    The sticking point is that after nearly 23 years, we still don’t have a conclusive answer to the start and end date. I accept problems of “apportioning” periods, but surely this happens either way? Either you apportion the time or the rent. Ie if you think the periods are 18 to 17 and the rent is paid on the first of the month for that month, when it runs statutory periodic do you say the first period is part of a period to bring it to the rent cycle or do you say you split the rent paid between periods?

    Reply

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