I am still slightly in shock after reading about the new section 21 case on the Nearly Legal website. It brings in a big change – a very welcome one for landlords.
In fact for landlords, Christmas may well have come early …
Taylor v. Spencer  Court of Appeal
The case involves a Miss Taylor who in February 2006 rented a property under an assured shorthold tenancy from Mr Spencer for a six months fixed term.
The fixed term was never renewed and ran on as a periodic. Mr Spencer than served a s21 notice. It did not comply with the provisions of s21(4) (which provides for a notice to give a a date which is the last day of a period of the tenancy) but included a saving clause.
Miss Taylor defended the claim for possession on the basis that (1) the notice was invalid as it gave the wrong date and (2) the landlord could not rely on the saving clause.
The case reached the court of appeal where the following surprising judgement was made by LJ Lewison (which was unanimously agreed by the other two Judges).
The new interpretation of Housing Act 1988 s21(1)
It all hinges on s21(2). As you are probably aware, s21(1) sets out the rules which we all thought only applied if the notice was served during the fixed term. But this is what s21(20 says:
A notice under paragraph (b) of sub‑section (1) above may be given before or on the day on which the tenancy comes to an end and that sub‑section shall have effect notwithstanding that on the coming to an end of the fixed term tenancy a statutory periodic tenancy arises.
(My emphasis). The word ‘may’ means (we now learn) that actually this form of notice can also be served after the fixed term too – so long as there has in fact been a fixed term.
Which then means that the dreaded s21(4) will only apply to tenancies where there has never been a fixed term at all.
Section 21 Saving clauses all right too
Miss Taylor also defended on the basis that the saving clause made the notice invalid as there should only be one expiry date.
LJ Lewison said the so long as it was clear which of the dates was the ‘primary’ date and which was the fallback date, it was perfectly all right. So its official – saving clauses ARE allowed.
That confirms the position which we all assumed from the case of Elias v. Spencer where the Court of Appeal refused to hear a case at all on this point, on the basis that it had no chance of success.
This case is a real turnup for the books. Quite why it has taken the courts some 25 years to reach a correct interpretation of this clause I don’t know.
Always assuming it is a correct interpretation of course. But somehow I don’t think it will be overturned. The courts are only too aware of the problems that s21(4) have caused landlords – needlessly it now turns out. No-one (apart from tenants of course) wants that back again.
So what can you do if you are a landlord whose case was chucked out by the court under s21(4)?
Nothing I’m afraid, as the decision would have been correctly based on the law as the Judges were entitled to understand it at the time.
However if you have a case coming up, I suggest you go to court armed with a copy of the Taylor v. Spencer case report. You’ll find it >> here.