Notices To Terminate: A Cautionary Tale

An article highlighting the importance of stating the correct termination date in a notice to terminate a tenancy agreement.

 The Housing Act 1988 created the Assured Short-hold Tenancy.  The majority of tenancies created between 15th January 1989 and 28th February 1997 are Assured Short-hold Tenancies, provided a written notice was served to the tenant stating the tenancy shall be an Assured Short-hold Tenancy, before the start of the tenancy.

When a fixed term Assured Short-hold Tenancy expires but the tenant continues to reside at the property, the tenancy shall become a periodic tenancy. An important decision for Landlords on a practical issue regarding notices to terminate Assured Short-hold Tenancies was in McDonald v Fernandez [2003] EWCA Civ 1219 in the Court of Appeal. The Court of Appeal held that a notice requiring possession on 4th January was invalid because the tenancy expired on the 3rd January.  The notice was invalid because it gave one day too much notice and so was deemed defective.

So what constitutes the last day of a tenancy?

For a periodic tenancy where, for example, rent is payable on the Monday, the notice should expire on the Sunday.  However, this is a very simplistic view. So, if the tenancy began on the 15th of the month but the rent is payable on the 1st of every month, the notice must expire on the last day of the previous month and not the 14th. Please note that if the tenancy is of a weekly or monthly nature, the notice period is a minimum of 2 months and not 8 weeks.  They are not the same thing.
The case of McDonald v Fernandez is important because many landlords face this issue on a regular basis.

Many standard section 21 notices contradict this decision as when in the process of filling out the form of the section 21 notice, the landlord is directed to enter the date they require possession rather than the date of the last day of the tenancy. As a safeguard, the landlord should include the following sentence ‘at the end of the period of your tenancy which will end after the expiry of two months from service of this notice’ in accordance with Lower Street Properties v Jones (1996) 28 HLR 877, CA.  In this case if the landlord had written this statement he would have been granted possession of the property.

The importance of using this sentence stems from Lady Justice Hale’s statement in McDonald v Fernandez “this is not a case where the consequences of failure to comply are particularly serious to landlords...a defective notice can be cured the next day...even if the defect is not noticed until the point is taken at court, a valid notice can then be given.”  The problem with this statement is that although a new notice can be served, the landlord will have to wait at least another two months to gain possession of the property and will suffer the increased legal costs due to the delay.