Social Welfare Update: Application of notice requirement under s21(1B) Housing Act 1988 during probationary period of AST

Tuesday 16 July 2019

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SB was the assured shorthold tenant of Livewest, a private registered provider of social housing. She was first granted a tenancy on 20 January 2015, for a fixed term expiring in 2022. This first tenancy provided for a ‘probationary’ or ‘starter’ period at the outset of the term. Following (disputed) allegations about SB’s conduct, Livewest served a notice under s21 Housing Act 1988 and brought possession proceedings. These proceedings were compromised after a period of litigation (culminating in the Court of Appeal granting SB permission to bring a second appeal) with an agreement that SB would be granted a further seven-year fixed term tenancy commencing on 27 February 2017 and including a further starter period.

The second tenancy included a break clause permitting Livewest to end the tenancy during the starter period upon two months written notice ‘in any form’. The tenancy also provided for a right of review against the decision to serve such a notice. As to the starter period itself, the tenancy stated that:

‘This tenancy is subject to a starter period of 12 months. If you break your side of the agreement during the starter period we may give you notice requiring you to give us possession of the property. If we are concerned at your conduct of the tenancy we may, at our discretion, extend the starter period by up to 6 months by giving you written notice.’

In August 2017, following further allegations of anti-social behaviour, Livewest served a notice which purported to be a s21 Housing Act 1988 notice combined with a notice activating the two-month break clause. The decision to operate the break clause was upheld on review, following which possession proceedings were instituted. Ms Bamber sought to defend the claim arguing that the notice failed to comply with s21(1B) Housing Act 1988, as well as relying on a public law defence and a defence under the Equality Act 2010.

The issue of compliance with s21(1B) was dealt with as a preliminary issue and was decided against SB. SB appealed to the High Court against that decision. Dingemans J dismissed her appeal.

SB appealed to the Court of Appeal.

The relevant parts of s21 Housing Act 1988 are as follows:

‘(1A) Subsection (1B) applies to an assured shorthold tenancy of a dwelling house in England if—

(a) it is a fixed term tenancy for a term certain of not less than two years, and

(b) 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—

(a) stating that the landlord does not propose to grant another tenancy on the expiry of the fixed term tenancy, and

(b) 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 Court of Appeal dismissed SB’s appeal but for different reasons then those given by Dingemans J. The purpose of s21(1B), which was introduced by the Localism Act 2011, was ‘to give the tenant who remains until the end of a fixed term tenancy of two years or longer a proper opportunity to re-house himself’. On the basis that the longer the tenant had been in the property the more time he or she would be likely to need to make alternative arrangements. See [36] and [45]. The need for the tenant to be provided with an extended notice period was ‘much less obvious’ in a case where the tenancy contained a break clause providing for early termination and where the landlord had operated that clause. As such, s21(1B) was intended to ‘to inform the tenant under the AST that the tenancy will not be renewed at the end of the contractual term: not on its termination at any earlier point in time’ and should therefore only be a bar to possession where the term of the tenancy had expired by effluxion of time and not ‘on notice or by forfeiture earlier during its term’. See [46]. This result could, and should, be achieved by reading the words ‘where applicable’ after the word ‘unless’ into s21(1B). This was justifiable, as a matter of statutory construction, applying the principles set out by the House of Lords in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586, in order to render the statutory scheme operable and achieve the objective of the legislation. See [46]-[49].

In obiter comments, Lewison J went on to express the view that a fixed term tenancy with a break clause which could be operated during the 12-month starter period was still a fixed term tenancy for a term certain for the purposes of s21(1A). The word ‘certain’ he explained ‘does not mean certain to last for the duration of the term’. Rather, it means that ‘the lease was granted for a term expressed to expire on a certain as opposed to an uncertain date’ and a lease granted for two years but with a break clause would end with certainty on that date regardless of any other circumstances. See [59].

The court declined to decide a further issue as to whether a landlord who failed to serve the six-month notice required by s21(1B) in time, could subsequently remedy that failing or whether this would constitute a continuing bar to the recovery of possession, save where one of the other grounds of possession is made out. See [50]-[51] and [67]-[68].

The judgment is available here: Livewest Homes Ltd v Bamber [2019] EWCA Civ 1174.

Connor Johnston is a member of the Garden Court Chambers Housing team.

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