How do the new section 21 time limits apply for this tenant?

Here is a question to the blog clinic ‘fast track’ from Sean (not his real name) who is a tenant

I have lived in my current rented property for a number of years.

An original 12 month contract was signed in 2013. I signed another 12 month contract in 2014. (This was not done using a renewal form, but instead an identical contract as before, the only change being increased rent.).

After this, we agreed to allow the 2014 contract to become periodic. It has been periodic for 16 months. I am now just about to sign a new 12 month AST with the landlord on the same property, which will, in effect, replace the periodic tenancy.

My question is: Will this new AST signed in 2016 be a ‘replacement contract’ according to the Housing Act 1988, or an ‘original contract’?

I am asking because

a) if the landlord wants to repossess, do the new Section 21 rules apply (e.g. not issuing notice before 4 months have passed)?

b) does the clause in the Housing act 1988 regarding courts not awarding possession until after 6 months apply to this contract?

c) the landlord has inserted a peculiar break clause. “The contract is for twelve months, with a two month break clause of either side. To exercise this option, a minimum of one months notice must be given in writing on or before the rent due date, prior to the 2 month date 12 May 2017.”

I think he has misunderstood how a break clause works, or the standard section 21 procedure at the end of the tenancy, and what he really means is for it to be a 10 month break clause. But I don’t want to run the risk of being evicted after 2 months in case I’m wrong! However, if the break clause is invalidated anyway by the Housing Act, I’m happy to sign.

Answer

In the context of the new section 21(4B) – the original tenancy will be the one that you signed in 2013, ie when you first moved in. The new tenancy you are about to sign will be a replacement tenancy.

Do the four and six month rules apply?

a) The new s21 rules do apply but insofar as the four-month period during which the landlord cannot serve a valid section 21 notice is concerned, this will not apply to you. This only applies to completely new tenancies which started on or after 1 October 2015.

Or to put it another way, your four month protection against section 21 ran from when your tenancy first began back in 2013. Which is long gone.

b) Yes.

Your landlord’s break clause

c) I think you should ask your landlord to re-word this clause before you sign the tenancy agreement – as it stands it is unclear.

I think it means that the contract will end if either party gives not less than one month’s notice in writing – and that the notice must be served on or before 12 May 2017. But if that is what it means, maybe it should say this?

So far as the one month’s notice is concerned, this is better for you than for your landlord – as your landlord will still have to serve a two month section 21 notice if he wants to evict you through the courts. All the break clause does is end the fixed term – which if you remain will immediately be followed by a periodic tenancy under s5 of the Housing Act 1988.

A contract term cannot affect the way that section 21 works. All it can do is bring forward the date the fixed term ends at the option of either party.

An example

So if the fixed term is due to end on 30 June 2017. If no break clause is exercised, this will be the first date that the landlord can issue proceedings – assuming he has served a section 21 notice not less than two months previously. He will have a period of six months from “the date the notice was given” to issue proceedings. So if the notice was given (and also deemed served) on 1 May then he will be able to issue proceedings, based on that notice, between 1 July and 30 October.

He will have a period of six months from “the date the notice was given” to issue proceedings. So if the notice was given (and also deemed served) on 1 May then he will be able to issue proceedings, based on that notice, between 1 July and 30 October 2017.

However if he serves notice under the break clause in October 2016, this will bring the fixed term to an end two months later in December 2016 (the precise date will depend on the date he served the notice and when it is deemed served).

He will then have a further four months to issue proceedings. As the six-month period runs from the giving of the notice, not when it is enforceable. So this means he will be able to start the section 21 proceedings six months earlier, in December 2016 rather than after 30 June 2017 (which is the earliest he can start his proceedings if the break clause is not activated).

If he wants to issue proceedings based on section 21 after that, he will have to serve a new notice.

Dealing with the break clause

The way I read the break clause, if he (or you) have not served the notice before 12 May, then you have both lost your chance to end the tenancy early.

If that is not what you and the landlord want – then the clause should be re-worded.  Although it would be rather odd to have a break clause which could only end the tenancy two months early.

Generally, with break clauses, it is best to make the wording as simple and straightforward as possible.  Otherwise, we get these problems with interpretation.  The English language can be  tricky as it is often possible to interpret things in several ways – which is why drafting should be left to the professionals.

Note that you can end the tenancy whenever you like if you both agree – you can always amend a tenancy by agreement.  The problem is, if you don’t both agree – when it will depend on what the tenancy clause says. Which is why you need to make sure that it says what you both want it to say.