Joint tenancies and fixed terms: notice to quit

An article for advisers examining tenant notice requirements to end a tenancy following relationship breakdown.

This article was originally published in the April 2018 issue of Adviser magazine and was correct at the date of publishing.

A sole tenant, or joint tenants who are in agreement, should be able to determine their liability under a tenancy agreement at the end of any fixed term, thereby avoiding any liability beyond what they initially agreed. However, where joint tenants are in dispute, one joint tenant who wishes to leave may find that they are unable to escape their liability at the end of the fixed term, and may need to wait for a statutory periodic tenancy to arise before a valid unilateral notice to quit can be served.

In light of this, anybody entering into a joint tenancy needs to be prepared for the risk of their liability continuing beyond the term of the original tenancy — a seeming conflict with the statement of Lord Bridge of Harwich in the leading judgement concerning this issue that ‘parties are free to contract as they wish and are bound only so far as they have agreed to be bound’.¹

It is well established that a tenant can end a fixed-term tenancy by leaving on the last day, with no requirement for notice.² As set out below, a term in the agreement requiring service of notice to end a fixed-term tenancy may be unenforceable. A tenancy can only be ended within the fixed term in accordance with any break clause, which will require the consent of all joint tenants to operate. Where a tenant remains in occupation under an assured shorthold tenancy after a fixed term has expired, a statutory periodic tenancy will arise under Section 5(2) of the Housing Act 1988 (HA 1988). It is key to note here that, in order for the tenancy to be determined on expiry of the fixed term, all joint tenants must have given up possession. If one remains in occupation, a statutory periodic tenancy will arise and the joint tenancy will continue. A joint tenancy can therefore only be ended by giving up possession at the end of the fixed term if all tenants have moved out.

Periodic tenancies

A tenant who wishes to end a periodic tenancy can do so by serving a valid notice to quit (NTQ), as governed by Section 5 of the Protection From Eviction Act 1977. The notice must be in writing and must give either four weeks or one period of the tenancy in notice — whichever is longer. The notice must also expire on the first or last day of a period of the tenancy. The well-known case of Hammersmith and Fulham LBC v Monk established that an NTQ served by one joint tenant is sufficient to end a periodic tenancy for all joint tenants.³ More recent case law has established that this does not represent a breach of Article 8 of the Human Rights Act (right to respect for a home) or Article 1 of the First Protocol of the Act (right to peaceful enjoyment of property) of the tenant who did not serve the notice.⁴ A joint tenant who remains in occupation after a valid NTQ has expired becomes a trespasser and may face a claim by the landlord for damages for use and occupation at double the rate of rent under the tenancy.⁵

A unique predicament

As established, a sole tenant can determine their tenancy and ensure a statutory periodic tenancy does not arise by moving out on the last day of the fixed term. This is also an option for joint tenants who are in agreement. For joint tenants who are in dispute, however, there does not appear to be any means by which one joint tenant can determine their tenancy at the end of the fixed term if the other joint tenant is intent upon remaining. The tenancy will not come to an end if the tenant who wishes to depart moves out, because continuing occupation by the tenant who wishes to remain will lead to a joint statutory periodic tenancy arising. There is no power for one joint tenant to end the tenancy on expiry of the fixed term without the cooperation of the other.

Can a notice to quit be served within the fixed term?

It is generally accepted that it cannot, and we will consider the reasons for this. It is established that the right for a landlord or a tenant to terminate a periodic tenancy by giving valid notice to quit is a necessity of a periodic tenancy,⁶ but this is not established in respect of a fixed-term tenancy, on the basis that termination of the tenancy has already been agreed by the existence of a fixed term.

Turning to the HA 1988, an explicit prohibition on service of an NTQ during the fixed term of an assured shorthold tenancy can be found at s5(5)⁷ — see panel.

The intention of this subsection is to prevent a landlord defeating the provision for an automatic statutory periodic tenancy arising by persuading the tenant to surrender or give notice to quit before the statutory periodic tenancy arises (i.e. within the fixed term).⁸ It has the effect, however, that any NTQ served by a joint tenant within a fixed term tenancy is invalid. While it would also be invalid for a sole tenant, this matters little, as they can just leave at the end of the fixed term. Case law has supported this position, with a finding that a tenancy term requiring a tenant to vacate temporary accommodation and move into permanent accommodation at the request of the landlord was unenforceable in light of s5(5), HA 1988.⁹

Further, it is established in common law that a notice to quit cannot be given before the commencement of a tenancy; another barrier to service of any NTQ within the fixed term taking effect to end a statutory periodic tenancy that arises after the fixed term.¹⁰

It is clear, therefore, that where joint tenants are in dispute, and one wishes to end the tenancy but the other will not agree to move out on expiry of the fixed term, the tenant who wishes to depart can only serve a valid notice to quit once the fixed term has come to an end and a statutory periodic tenancy has arisen. This means that, for a typical tenancy where the period of the tenancy is a calendar month, the tenant who wishes to depart must wait until the first day of the statutory periodic tenancy, and can then serve one month’s notice, to expire on the first day of the next period of the tenancy. In reality, therefore, a joint tenancy entered into for a period of six months can extend to a liability that cannot be ended unilaterally until a period of seven months has passed.

Contractual requirements for notice to end the fixed term

Tenancy agreements will occasionally contain a clause requiring the tenant to give notice to the landlord if they intend to leave on expiry of the fixed term. While it is often argued that this may well be an unfair contract term under the Consumer Rights Act 2015, there is also a strong argument that any such notice would be unenforceable in light of s5(5), HA 1988, and thus cannot be required.

Tenancy provides for a contractual periodic tenancy to arise on expiry of the fixed term

Section 5(4), HA 1988 provides that a statutory periodic tenancy shall not arise if a fresh tenancy agreement is entered into. This may mean that, where a fixed term tenancy expressly provides for a contractual periodic tenancy to arise on expiry of the fixed term, a notice to quit could be served to end the tenancy on expiry of the fixed term rather than allow a contractual periodic tenancy to arise. This is because the s5(5) restriction only applies where a statutory periodic tenancy would ordinarily have arisen. The tenant would however be bound by the contractual provisions for service of notice, and these may stipulate that, where there is a joint tenancy, the notice must be served by both tenants. This theory is however untested, and counter-arguments could be raised.

A balance of interests?

The position of a joint tenant who cannot unilaterally end their tenancy on the expiry of the fixed term appears counterintuitive to the statement of Lord Bridge of Harwich that ‘in any ordinary agreement for an initial term which is to continue for successive terms unless determined by notice, the obvious inference is that the agreement is intended to continue beyond the initial term only if and so long as all parties to the agreement are willing that it should do so’.¹¹ The principle on which the decision in Monk is founded, that the parties are bound only to the extent that they have agreed, does not appear to be entirely consistent with the limitations for one joint tenant to end the tenancy agreement at the expiry of the fixed term if the other does not agree.

Nonetheless, the right established in Monk, for one tenant to end a joint periodic tenancy by service of a valid NTQ, does limit any liability jointly entered into insofar as it ensures that a joint tenant is not bound indefinitely by a liability they have no power to terminate. As well as the joint tenant who wishes to escape their liability, consideration must be given to the other joint tenant who faces losing their home following service of an NTQ.

Legislation in Scotland allows a joint tenant under a Scottish Secure Tenancy to serve four weeks’ notice on the landlord and other joint tenants in order to determine their own interest only, with the joint tenancy continuing for any remaining joint tenants.¹² This would appear to reconcile the interests of both parties well, although, in the private sector particularly, it may pose problems for a landlord who then finds themselves with a sole tenant who they would not have been prepared to let to alone.

Endnotes

1. Lord Bridge of Harwich, Hammersmith and Fulham LBC v Monk [1991] UKHL 6
2. Right d. Flower v Darby (1786) 1 T.R. 159; Cobb v Stokes (1807) 8 East 358
3. Hammersmith and Fulham LBC v Monk, op.cit.
4. Sims v Dacorum BC [2014] UKSC 63
5. S18, Distress for Rent Act 1737
6. Doe d. Warner v Browne (1807) 8 East 165
7. S5(5), Housing Act 1988
8. ‘Encyclopedia of Housing Law and Practice’, Sweet & Maxwell, 1–2378.5
9. Paddington Churches Housing Association v Boateng, January 1999 Legal Action 27, Central London Civil Trial Centre
10. Lower v Sorrell [1963] 1 QB 959, [1962] 3 All ER 1074
11. Hammersmith and Fulham LBC v Monk, op.cit.
12. S13, Housing (Scotland) Act 2001