Jared Norman considers the case of Livewest Homes Limited v Bamber [2019] EWCA Civ 1174.
Section 21 has become a minefield for landlords who let properties under assured shorthold tenancies. The Livewest case is of particular relevance to social landlords who have entered into fixed term tenancies of more than two years and/or where they are operating a break clause.
In Livewest, the Court of Appeal decided that the provisions of section 21(1B), Housing Act 1988 applied where the tenancy had come to an end by effluxion of time but not where the tenancy was terminated at any earlier point (such as by a break clause). The section, of course, provides that a court cannot not make an order for possession unless the landlord had given not less than 6 months’ notice in writing (complying with the subsection).
Section 21(1B) applies (pursuant to s.21(1A)) to fixed term tenancies of not less than 2 years where the landlord was a private registered provider of social housing.
While the Court of Appeal dismissed the tenant’s appeal, it considered Dingmans J’s decision, based on construction of the word “is” in s.21(1A) - that the tenancy had to remain a fixed term tenancy at the date of the hearing or the date of issue of possession proceedings for the 6 month notice to be required - was wrong. This was not entirely surprising; the effect of such a construction was that it would render s.21(1B) inoperable and was not what Parliament intended. The Court of Appeal considered that S.21(1A) merely identified what type of tenancy s.21(1B) applies to.
The legislation
The subsections materially read:
‘(1A) Subsection (1B) applies to an assured shorthold tenancy of a dwelling house in England if-
- it is a fixed term tenancy for a term certain of not less than two years; and
- The landlord is a private registered provider of social housing.
(1B) The court may not make an order for possession of the dwelling-house let on the tenancy unless the landlord has given to the tenant not less than six months’ notice in writing-
- Stating that the landlord does not propose to grant another tenancy on the expiry of the fixed term tenancy; and
- Informing the tenant of how to obtain help or advice about the notice and, in particular, of any obligation of the landlord to provide help or advice.’
The facts
It was common ground that Ms Bamber was granted a 7-year assured shorthold tenancy by Livewest, a private registered provider of social housing. The tenancy had a probationary period of 12 months (extendable by 6 months). During this time, Livewest could operate a break clause to terminate the tenancy. There were safeguards for the tenant should the break clause be operated, such as a review.
Livewest triggered the break clause by issuing a notice (which complied with s.21(1)(b) but not s.21(1B)). Proceedings were issued. The defence raised, inter alia, that the notice did not comply with s.21(1B).
In the County Court, Livewest argued that one should consider the provisions at the date of the issue of proceedings or determination, not the date of notice. HHJ Mitchell rejected this argument and considered that the date of service of the notice was the material date. He found, however, Livewest was not required to serve a 6 months’ notice under s.21(1B) as it only applied when the fixed tenancy was due to expire by effluxion of time.
An appeal from HHJ Mitchell was dismissed by Dingmans J, albeit for different reasons. Dingmans J, held that as s.21(1A) referred to s.21(1B) applying where ‘…it is a fixed term tenancy…’ it did not apply if the tenancy had been a fixed tenancy but was no longer one.
Ms Bamber appealed to the Court of Appeal.
The issues and decision
The main question for the Court of Appeal was whether the usual provisions of a notice under s.21(1)(b) were qualified or added to by s.21(1B). In particular, whether a landlord who had exercised its power under a break clause to determine the contractual tenancy was required to comply with s.21(1B).
Having considered, inter alia, Ministerial statements made during the committee stage of the Localism Bill and provisions relating to flexible tenancies (which contained similarities to the provisions in question), the Court of Appeal found that the legislative intention was that s.21(1B) assumes the expiry of a fixed tenancy of 2 years or more by effluxion of time not by other means.
The Court of Appeal considered that the requirement on landlords to give an additional 6 months’ notice ‘…makes no real sense except in that context’. The court viewed the purpose as being to give tenants who remain in the property at the end of the fixed term of 2 years or longer a proper opportunity to re-house themselves. In reaching the decision, the Court of Appeal appear to have considered the use of the word ‘expiry’ as indicating the interpretation adopted in distinction to phrases such as ‘coming to an end’ found in other provisions of the Housing Act.
Given the approach adopted in the High Court was agreed and found to be inoperable, it is unsurprising that the Court of Appeal held this was not what Parliament had intended. As some commentators have noted, if this was the case, the landlord could merely wait until the expiry of the fixed term prior to giving a notice of not less than 2 months, rather than having to give the longer notice of not less than 6 months.
Furthermore, it is understandable why the Court of Appeal did not find that the 6-month requirement applied in Ms Bamber’s case. If so, it would have given additional protection to tenants who had contractually agreed to earlier termination in set circumstances and often those who had in some way failed to comply with the terms of their tenancy.
The Court of Appeal left open (it did not arise in the case and full argument was not advanced) the issue of whether and, if so, how a landlord could remedy a failure to comply with s.21(1B) by failing to serve a compliant notice within sufficient time prior to expiry of the tenancy. Given the reasoning in this case, the result would be a landlord would be prevented from relying upon a no fault notice it seems unlikely that late compliance would not be sufficient but this remains to be determined.