Section 21 Notices

Perhaps now is an opportune time to review the process of using section 21 notices as a recent court decision (Spencer v Taylor 2013), after 25 years of use of these notices, could be a real game changer.

Section 21 of the Housing Act 1988 provides a no blame eviction process where the landlord does not need to give any reason for requiring possession. The downside to s21 (as opposed to section 8) is that it cannot be used during the fixed term, which in turn cannot be for less than 6 months, and the notice period is long – a minimum of 2 months.

There is no prescribed form for the s21 notice except that certain information must be provided. Providing the landlord or agent has made no technical errors in the process, which would give the tenant a defence, the judge must make out a possession order.

This latter point is a huge advantage to s21 over s8 as the tenant cannot bring a counter claim against the landlord, sometimes brought on spurious grounds, a process which usually becomes very time consuming and expensive.

There are two different notices under section 21: (1) s21(1)(b) the fixed-term notice and (2) s21(4)(a) the periodic notice.

The fixed term notice can be served at any time during the fixed-term, up to and including the last day of the term and cannot expire before the term comes to an end. In theory, once a fixed-term notice has been served during the fixed-term, it need not be served again when the tenancy has become periodic and even when it has been periodic for a prolonged period.

The periodic notice is different: this 2-month notice must expire on the last day of a tenancy period, on a specific date, which is a minimum of 2 months hence. Therefore the notice period can be nearly 3 months in some cases, and getting the end date correct is crucial.

Some useful case law in Ferndanez v McDonald, Lower Street Properties v Jones, Elias V Spencer has clarified the position regarding dates and mistakes, and introduced a concept known as the “saving clause”. This is a brief statement in the notice which allows the recipient to work out the correct date, even if the date is wrong. Usefully, Spencer v Taylor confirms that the statement always takes precedent over a wrong date.

The usual wording of the saving clause goes something like: The landlord seeks possession after [date] or, “if this notice would otherwise be ineffective, after a date which is the earliest date, being no earlier than two months after the date of service upon you of this notice, when a period of your tenancy ends”.

Enter Spencer v Taylor: here the appeal court judge’s interpretation of section 21 is such that s21(1)(b), the 2-month notice, is the only notice needed, even when the tenancy has become periodic.

Following this ruling, the s21(4)(a) notice (which requires an end date and potentially an extended notice period) is needed only when the tenancy has been a periodic one for the start – quite a rare situation.

It is really surprising that such an interpretation should emerge so long after the original legislation was introduced, throwing into doubt long custom and practice in the industry.

However, there are some provisos to this: although the appeal court ruling is sound as it stands, it may well be appealed to a higher level – the Supreme Court, which in theory could change it again.

Secondly, if you decide to rely on this judgement and change the way you serve notices for those tenancies whose started life as fixed-term, and have now lapsed into statutory periodic tenancies, you could come up against a judge who is not aware of Spencer v Taylor – it takes time for knowledge to filter down to 1st level courts. You may not convince the judge, so is it worth that risk?

The Superstrike Limited v Marino Rodrigues 2013 case has shown us that a statutory periodic tenancy is in fact a new tenancy, rather than a continuation of the existing tenancy as most people thought, therefore necessitating the re-protecting and re-serving of deposit prescribed information under s213 (HA2004)

Following this case some are using agreements which specify a contractual periodic tenancy, obviating the need to re-protect a deposit when the tenancy becomes periodic.

Therefore the periodic s21(4)(a) notice will still apply to any tenancy which has been periodic from day one, and for those tenancies which have provision for the tenancy to continue as a contractual periodic tenancy.

The best advice perhaps is to continue to use both notices as before until this law becomes settled, or is indeed overturned in the next year or two.

UPDATE: July 2014

Further developments on this reveal that the legality of using the s21(1)(b) notice for both types of tenancy has been confirmed.

Where a fixed term tenancy becomes a statutory periodic one S.21(2) the 1988 Housing Act provides that a notice under s.21(1)(b) “may be given before or on the day on which the tenancy comes to an end”

In other words, S21(1)(b) applies at any time in the life of a Fixed term AST, even if it has become Statutory Periodic. (Spencer v Taylor)

Remember though, if your tenancy was periodic from day one, or it is written into your contract that the tenancy continues on a periodic basis after the fixed term (contractual periodic tenancies) a Section 21(4)(a) would then be required.

Contractual Periodic tenancies obviate the need to renew deposit protection as per the Superstrike case, when a fixed term tenancy becomes a statutory periodic one, but this will mean that you need to use the more complicated Section 21(4)(a) notice should you need to evict.