Here is a question to the blog clinic from Frances (not his real name) who is a tenant:
Last year I entered into a Assured Shorthold Tenancy Agreement which commenced on 1st September 2011 for 12 months – I continued to stay at the property after 31st August 2012 and my landlord didn’t follow this up with a new agreement.
I recently served notice to end my tenancy on my landlord via email on 18th November and by follow-up letter on 19th November.
I pay rent monthly on the 1st day of each month – so I calculated that my last day at the property would be 31st December 2012, however my landlord is disputing this and thinks that I should have served 2 months notice and therefore should be paying rent until 18th January 2013.
I argued that the tenancy has now become a statutory periodic tenancy because it now continues from month to month on the same terms. He is arguing that the tenancy is a contractual periodic tenancy and the notice period should be 2 months in line with the contract.
The relevant contract provisions are:
The Term 12 months beginning on 1st September 2011 (‘the fixed period’)
The Tenancy will then continue, still subject to the terms and conditions set out in this Agreement, from month to month from the end of this fixed period unless or until the Tenant gives notice that he wishes to end the Agreement as set out in Clause 4 overleaf, or the Landlord serves on the Tenant a notice under Section 21 of the Housing Act 1988, a new form of Agreement is entered into, or this Agreement is ended by consent or a court order.
4. Ending this Agreement
4.1. The Tenant cannot normally end this Agreement before the end of the Term. However, after the first six months of the Term, if the Tenant can find a suitable alternative tenant, and provided this alternative tenant is acceptable to the Landlord (the Landlord’s approval not to be unreasonably withheld) the Tenant may give notice to end the Tenancy on a date at least two months from the date that such approval is given by the Landlord. On the expiry of such notice, provided that the Tenant pays to the Landlord the reasonable expenses reasonably incurred by the Landlord in granting the necessary approval and in granting any new tenancy to the alternative tenant, the Tenancy shall end.
I have argued that clause 4.1 is a break clause and relates to the fixed period only – otherwise the first line of this clause does not make sense?! Also, the clause seems quite punitive which would follow if someone wanted to leave a contract early.
He is threatening to deduct the amount of rent (which he has calculated to be from 1st Jan – 18th Jan 2013) from my deposit which I don’t think he can simply just do in the event of a dispute.
Please can you let me know who is right here?
Those clauses look like my old tenancy agreement, save that in mine the notice period is one month and it also goes on to say in the following clause that after the fixed term has ended the notice period is one month. You might just want to check to see if that second clause is there.
If your landlord has taken the notice clause about the periodic tenancy out, then my view is that it does not change anything as the normal notice period for a monthly periodic tenancy is one month, and any clause that says anything to the contrary will be void under the Unfair Terms in Consumer Contracts Regulations 1999.
If this case were to go to court, I am pretty sure that any Judge would agree that clause 4.1 on its own is (as you say) a break clause and only applies during the fixed term.
So how can a landlord make a tenant give 2 months’ notice? I have seen it written into some AST, but is there a way to make it enforceable?
I don’t think so, no. My understanding is that any such clause will be void under the Unfair Terms in Consumer Contracts Regulations 1999.
Tessa, to be fair you would have to say the clause was open to challenge under the UTCCR as only a court can decide if a clause is fair or not. Fairness will also depend on how prominent the clause was made.
OFT did say that they considered any clause that changed the common law or statutory position to be unfair, I did point out that surely this was the point in having a written contract. For example, common law allows rent paid up to the last day, tenancy moves it to the first day. PFE act says the notice must be a minimum of 28 days but does not prevent it being extended so till we have a court judgement the “jury” is out.
Someone on the Landlord Law facebook page entry for this post said that they had been successful in having two months notice. Here’s what she said:
Actually you can have 2 months notice on a periodic if
1. It’s very clear in the original tenancy that the notice term is for periodic term if it enters into one.
2. You’ve pointed this term out to the tenant prior to the start of the contract, (red hand rule).
I have a 2 month notice and Judges have been fine with it in the periodic term. It’s housing officers that have the issue. The statutory law only covers when the original agreement doesn’t clarify this point.
It would be interesting to know any other landlords that have had any issues.
I suspect that the clause in the question was buried in the small print.
-> “It’s very clear in the original tenancy that the notice term is for periodic term if it enters into one”
Do you have working for this?
I think a longer notice that the tenant can give to end on any day is a lot better than 1 month’s notice that must end on a “magic day”.