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Landmark ruling could save landlords thousands

18th June 2014

The effect of the Court of Appeal decision in Spencer v Taylor [2013] is that just two calendar months’ notice is required to end an assured shorthold tenancy after the end of a fixed term. 
 
For 25 years it was universally believed that, to end a statutory periodic tenancy, landlords had to use s.21(4)(a) of the Housing Act 1988. That section requires a minimum of two months’ notice ending on the last day of a period of the tenancy. This decision means that belief is wrong – landlords can rely on the far simpler Section 21(1)(b) which requires ‘not less than two months’ notice in writing and can end on any day of the month.  
 
It can make the notice period up to 30 days shorter than under s.21(4)(a). Under that provision, if your rent is paid on the first day of the month and you want to serve notice on the second day, you have to wait nearly three months as the notice can’t expire until two whole months have passed plus the remainder of the following month.
 
It is also very easy to get the date wrong under s.21(4)(a) because there is only one possible correct date, so countless cases have been struck out for technical failure to comply with the section even though the tenant has received much more than two months’ notice.
 
The Court also considered whether a notice with an incorrect expiry date but with a saving provision (which allowed the tenant to work out the correct date) could be valid.  
 
The court found in favour of the landlord on this point as well so, in all the case is great news for agents and landlords. Almost all assured shorthold tenancies start with a fixed term so landlords can now just serve two months’ notice which can start and end at a convenient time without having to worry about calculating exactly when the last day of a period of a tenancy is and risk their claim being struck out if they get it wrong.
 
One note of caution though. We are aware that the tenant has sought permission to appeal the decision.  If granted, courts may be reluctant to make possession orders based in this judgment pending the outcome of the appeal. In our view it would not be in the public interest to return to the state of confusion that existed before this judicial breath of fresh air but watch this space and we will update you if permission to appeal is granted.
 
Author: Paul Walshe

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