Livewest Homes Ltd v Bamber: appeal judgement
A case law update on issuing a Section 21 notice during the starter period of an assured shorthold tenancy - how much notice must be given?
[Extent: England]
Many registered providers of social housing now offer tenants fixed term assured shorthold tenancies, and include starter (or probationary) periods. Section 21(1A) and (1B) were inserted into the Housing Act 1988 by the Localism Act 2011, to ensure tenants in such situations retain some protections.
Section 21 provides for the recovery of possession on the expiry or ending of an assured shorthold tenancy. Sections 21 (1A) and (1B) give additional protection for tenants of registered providers who have fixed term tenancies for a “term certain of not less than 2 years”. In these situations, 6 months’ notice must be given to the tenant that the registered provider does not intend to grant a new tenancy on the expiry of the fixed term.
In this case, the key question was whether sections 21(1A) and 21(1B) should apply to notice served during the starter period of a fixed term assured shorthold tenancy with a registered provider.
What the case was about
Livewest, granted Ms Bamber, an assured shorthold tenancy for a fixed period of 7 years, with a starter period of 12 months. Clause 2.1 stated that during this starter period, Livewest could end the tenancy with 2 months’ written notice. During the starter period, Livewest served Ms Bamber 2 months’ notice, exercising the break clause, and acting as a notice under Section 21. They subsequently brought proceedings for possession.
Ms Bamber defended the proceedings on 2 grounds.
- She argued that the notice did not comply with Section 21(1B) of the Housing Act 1988, since she was not given 6 months notice. That issue was considered at a preliminary hearing, and is the one now appealed.
- She also claimed a defence under the Equality Act 2010 and on public law principles — those issues have not yet been considered by a court, and now need to be considered following determination of the preliminary issue
The original judge held that section 21(1A) and (1B) didn’t apply to a tenancy with a break clause. Therefore Livewest was not required to meet the requirements in Section 21(1B).
Ms Bamber appealed this decision. The appeal considered two related issues:
- Whether the original judge was right to find Sections 21(1A) and (1B) didn’t apply to the tenancy during the starter period
- If not, whether the tenancy became a statutory periodic tenancy when the break clause was activated, so that sections 21(1A) and (1B) did not apply anyway.
What the court decided
Whether Sections 21(1A) and (1B) applied to the starter period
In a draft judgement, the appeal judge found the wording of the tenancy agreement meant it was not a ‘fixed term tenancy for a term certain of not less than two years’. Clause 2.1 of the tenancy agreement provided for a break clause which permitted the service of 2 months’ written notice to give up possession of the flat. Since possession could be demanded on two months’ written notice, there was no fixed term tenancy and therefore Sections 21(1A) and (1B) did not apply.
However, Ms Bamber’s representative asked the Court to reconsider this. During the reconsideration process, Livewest agreed that the tenancy was in fact of a ‘fixed term certain of not less than 2 years’, and therefore Sections 21 (1A) and (1B) did in fact apply to it. The appeal judge upheld this as common ground between the parties.
Whether Section 21(1B) applied once the starter period was brought to an end
The original judge found that when Livewest gave Ms Bamber 2 months’ notice during the starter period, this left her on a statutory periodic tenancy, according to s.5(2) of the Housing Act 1988. She therefore did not have “a fixed term tenancy for a term certain of not less than two years”, and so 6 months notice wasn’t required under s.21(1A).
On appeal, Ms Bamber’s representative argued the words “it is a fixed term tenancy for a term certain of not less than two years” in section 21(1A) should be read as “it was a fixed term tenancy”. On this reading it was contended that the provisions under s.21(1A) and (1B) should still apply, even though the fixed term tenancy that previously existed had been brought to an end.
The appeal judge did not accept this argument. They held that Livewest created a statutory periodic tenancy by giving notice within the starter period, and that the provisions of Section 21(1A) and 21(1B) had nothing to do with notice in a starter period. Therefore, Sections 21 (1A) and (1B) did not apply and 2 months’ notice was enough to end the tenancy. However, if a provider wanted to recover possession immediately on the expiry of the fixed term where the break clause had not been operated, then a notice complying with Section 21 (1B) would still need to be given.
What this means for advisers
If a client has a fixed term assured shorthold tenancy with a registered provider of social housing, Sections 21 (1A) and (1B) will usually apply. This means they must be given 6 months notice if the provider is bringing their agreement to an end.
However, these protections will not apply during a starter period which provides for a break clause. During that time, 2 months notice will be enough both to exercise the break clause and to take effect as notice under S.21 to determine the tenancy.
Caroline Rogers works in the Housing Expert Advice team at Citizens Advice.
