A couple of catch-up/postscript notes.
We looked at Cheerupmate2 Ltd v Calce (2017) UKUT 377 (TCC) before – our report here – the landlord’s forfeiture was held to be invalid and premature. Well, Cheerupmate2 Ltd appealed to the Court of Appeal.
Cheerupmate2 Ltd v Calce (2018) EWCA Civ 2230
Both parties were still unrepresented.
The Court of Appeal held that i) the Upper Tribunal was wrong to find that the use of an older version of the prescribed notice under s.166 Commonhold and Leasehold Reform Act 2002 made the notice invalid. The court considered
i) The discrepancy between the notice as served and the prescribed form lies not in the information provided but in the clarity of the information;
ii) The notice as served contained all the information required by the 2002 Act itself;
iii) The form of the notice is governed by a statutory instrument, and not by the Act itself;
iv) The form of the note in the notice as served was part of a prescribed form that was in force between 2004 and 2011; and must, therefore, have been regarded by Parliament at that time as sufficient to comply with the statutory requirement;
v) The change in the wording of the note was made, not by an amending set of regulations, but by a “correction slip” which would only have been used if the change was regarded as not altering the substance of the note;
vi) The explanatory notes are plainly subordinate to the purpose of the notice which is to inform the leaseholder that there are arrears of rent which must be paid by the date specified in the notice. The explanatory note describes the context in which the notice is served.
On that basis “Parliament is unlikely to have intended that the minor discrepancy between the notice in fact served and the prescribed form was of sufficient importance to invalidate the notice. In my judgment, therefore, both tribunals were wrong in holding that the notice was invalid”.
But the landlord still failed as the notice was premature as “under the terms of this lease the landlord was required to wait for two years after the date specified for payment in the section 166 notice before the right to forfeit became exercisable. It follows that the purported re-entry was unlawful.”
Meanwhile, MHCLG have apparently begun a quarterly private sector newsletter to stakeholders. (I only huffed a bit at not getting it directly. Well, maybe quite a lot.) The first newsletter confirms, amongst other things, that in respect of the 1 October 2018 Deregulation Act changes
Deregulation Act 2015
From the 1 October, some provisions of the Deregulation Act 2015 came into force for all tenancies, which previously only applied to tenancies agreed on or after 1 October 2015. Notably, that a landlord must wait at least four months from the start of a tenancy before serving a section 21 notice and must give a tenant at least two months’ notice in writing in most situations. Landlords agreeing a tenancy after 1 October 2015 must also comply with certain requirements at the outset of a tenancy such as providing an up to date version of the How to Rent guide and a copy of the Energy Performance Certificate. These specific rules do not apply to tenancies that began before 1 October 2015 and there is no intention at present to extend the requirements.
So, this post and the updated s.21 flowchart remain accurate, at least pending case law, as there will be no additional regulations on the prescribed legal and information requirements as a result of the 1 October 2018 changes.