Test Case: Spencer v Taylor and Section 21 Notices
Spencer v Taylor  had some major implications for landlords and agents when serving a Section 21 notice, but to some extent it simplifies things for landlords. Further legislation in the Deregulation Act 2015 further clarifies this, but adds some stringent new rules for s21 notices.
It means that for a fixed term contractual Assured Shorthold Tenancy (AST), one where an agreement is signed, and it has become a statutory periodic tenancy (SPT), there are now alternative ways of serving a Section 21 Notice, and there is no longer a need to observe the strict end dates, which often led to confusion and aborted possession claims.
This article applies primarily to English law. Although tenancy laws are similar in other jurisdictions, there may be significant differences. Always seek professional advice before making or not making important decisions.
Court of Appeal
The case came before the Court of Appeal which considered the validity of a s21 notice used in respect of a tenancy established in 2006 between the tenant (Miss Taylor) and her husband (Mr Spencer), having become periodic, and possession was sought in 2012 (the notice had been served in 2011).
The notice had been judged valid by a lower court, so the appeal focussed on whether the notice served by Mr Spencer fulfilled the criteria set out by the Housing Act, even though the end date specified for possession was not the last day of a period of the tenancy, as was custom and practice when relying on the s21(4) notice (periodic notice).
After reviewing the legislation, Lord Justice Lewison determined that the notice was indeed valid, having met the criteria established in s21 of the Housing Act.
Section 21 of the Act states:
(1) Without prejudice to any right of the landlord under an assured shorthold tenancy to recover possession of the dwelling house let on the tenancy in accordance with chapter one above, on or after the coming to an end of an assured shorthold tenancy which was a fixed term tenancy a court shall make an order for the possession of the dwelling house if it is satisfied –
(a) that the assured shorthold tenancy has come to an end and no further assured tenancy, whether shorthold or not, is for the time being in existence other than an assured shorthold periodic tenancy, whether statutory or not and –
(b) the landlord, or in the case of joint landlords at least one of them, has given to the tenant not less than two months’ notice in writing stating that he requires possession of the dwelling house.
(2) A notice under paragraph (b) of sub-section (1) above may be given before or on the day on which the tenancy comes to an end and that sub-section shall have effect notwithstanding that on the coming to an end of the fixed term tenancy a statutory periodic tenancy arises.
(3) Where a court makes an order for possession of a dwelling house virtue of sub-section 1 above, any statutory periodic tenancy which has arisen on the coming to an end of the assured shorthold tenancy shall end without further notice and regardless of the period in accordance with section 5(1A).
(a) that the landlord, or in the case of joint landlords at least one of them, has given to the tenant a notice in writing stating that after a date specified in the notice being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling house is required by virtue of this section, and –
(b) that the date specified in the notice under paragraph (a) above is not earlier than the earliest day on which, apart from Section 5(1) above, the tenancy could be brought to an end by a notice to quit given by the landlord on the same date as the notice under paragraph (a) above.
Notice Expiry Dates
Lord Justice Lewison said that in this case s21(1)(a) and (b) were satisfied. He said no tenancy other than a statutory periodic tenancy has arisen following the initial AST, and that a minimum of two months’ notice had been given.
How then could a notice be valid as the date given for possession did not coincide with the end of the period, as required by 4(a)?
Lord Justice Lewison determined in his judgement that the use of the word ‘may’ in s21(2) in the 1988 Housing Act is permissive rather than restrictive, that is, a landlord may rely on s21(1) prior to the end of the fixed term, but this would not preclude its use during an STP. Therefore an end date given for possession, provided the notice gives at least two months’ notice, is not necessary and irrelevant.
Implications of the Spencer v Taylor ruling
If a fixed term contractual Assured Shorthold Tenancy (AST) has become a statutory periodic tenancy (SPT) there are two options when serving a Section 21 Notice:
- Option 1 – is to continue to use the periodic s21(4)(a) notice and include a date of expiry, an end date which is the last day of a tenancy period, after which the landlord requires possession.
- Option 2, taking Spencer vs. Taylor as relevant, there is no need to use a s21(4)(a) notice, or have a date of expiry at the end of a period of the tenancy. Therefore an s21(1)(b) notice will suffice for both a fixed term and a statutory periodic tenancy, providing at least two months’ notice is given.
New Rules Section 21 Rules – Deregulation Act 2015
With the implementation of new rules under the Deregulation Act 2015 from 1st October 2015, the rules governing Section 21 and the eviction process underwent some major changes.
From the 1st October 2015 the provisions in the Deregulation Act 2015 (the “Act”) and The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) (Amendment) Regulations 2015 (SI 2015/1725) (“Regulations”) introduced new requirements for serving a valid Section 21 notice.
These provisions apply to all new assured shorthold tenancies (ASTs) starting on or after 1st October 2015, and will apply to all existing ASTs after the 1st October 2018.
The New Section 21 Rules:
A Section 21 notice will not be valid if the landlord is in breach of any legislation which relates to:
- The condition of the rental property and common parts
- The health and safety of occupiers
- The energy performance of the property
- Mandatory, Additional or Selective licensing requirements of the property by the local authority
- The Deposit Protection Rules
- The Serving of specific documents – see below
Setting up a New Tenancy:
To comply fully with the new section 21 rules, landlords and agents must be diligent and meet specific documentary requirements at the start of a new tenancy, which involves serving on the tenant:
- An Energy Performance Certificate (EPC) for the property. These certificates last for 10 years from issue, following an energy performance assessment of the property.
- A current Gas Safety Certificate (if there is gas in the property). These certificates last for 12 months from issue, following a Gas Safe engineer’s inspection. Gas appliances should also be serviced at this time.
- A current copy of the Department for Communities and Local Government’s booklet entitled How to rent: the checklist for renting in England
In order to set-up a tenancy correctly, meeting the new regulations and being fully prepared in case there is a need to seek possession, landlords and agents need to document everything carefully.
Practically, it is a good idea to attach copies of the EPC, Gas Safety Certificates, Deposit details (leaflet and statutory (s213) information) and the “How to Rent” guide to the Tenancy Agreement and to any Section 21 notice served in order to avoid a dispute. Always get proof that these notices have been served.
Serving some documents, such as the How to Rent guide, via email can be acceptable providing the tenant has agreed to this. A clause in the tenancy agreement to this effect will suffice, and again, proof of service should be obtained.
New Prescribed Form for Section 21 notices
The new prescribed form s21 notice (Form 6A) is required for all tenancies started after 1st October 2015 and all existing tenancies after 1st October 2018.
For tenancies started prior to that date, the older s21(1) and s21(4) notices should be used. In theory the new 6A notice could be used for an older tenancy, BUT all the new requirements as above must be met, so in practice it is better to continue to use the older notices for older tenancies.
Where the original tenancy started before 1st October 2015, but continued after that date as a periodic tenancy, it is not classed as a new tenancy for this purpose and the older s21(1) and s21(4) notices can still be used. The important date is when the original tenancy started. However, where the tenancy has been renewed (replacement tenancy) with the same tenant (a new agreement is signed), all the new rules apply.
Source: DCLG s21 Notice
Notice Periods for Section 21
For all new ASTs (including periodic tenancies) granted after 1st October 2015, it is no longer a requirement to have the 2 months’ s21 notice expire ‘on the last day of a period of the tenancy’ before applying to the court for a possession order. These dates caused a lot of confusion and invalidated numerous section 21 notices in the past. Therefore serving these notices has been simplified, but in practice landlords and agents should allow a few extra days when serving these notices to avoid any disputes on notice length.
For periodic tenancies which run for longer periods than month to month, for example when rent is payable every 3 or 6 months, a longer notice period will be required coinciding with the rent payment period length.
New Time Limits for s21
4 month rule – for all those new ASTs granted after 1st October 2015, a valid Section 21 notice cannot be served within 4 months of the start of the tenancy. For a replacement tenancy (a new tenancy agreement signed with the same parties and the same property) a Section 21 notice cannot be served within 4 months of when the original tenancy began, so in most of these cases the 4 month restriction will not apply.
6 month rule – when a Section 21 notice has been served under a fixed term AST or a periodic AST which runs from week to week or month to month, possession proceedings must be started within 6 months of the date the notice was served – see Section 36 of the Deregulation Act 2015.
4 month rule periodic tenancies – in the case of periodic tenancies running for longer periods, for which more than two months’ notice is required, for example, if the rent is paid quarterly, at least three months’ notice is required or half yearly or annually, the notice length should coincide with these periods, with a maximum notice period of 6 months. In these cases the s21 notice will be valid for only four months from when the notice expires, as specified in section 2 of the prescribed form Section 21 notice.
Retaliatory Eviction Rules
6 month rule for dilapidations – it is now the case that a landlord will not be permitted to serve a valid Section 21 notice within 6 months of the service or suspension of a relevant “improvement notice” which has been issued to the landlord by the Local Authority.
The landlord is also prevented from serving a valid Section 21 notice where the tenant has made a complaint to the landlord regarding the condition of the property and the landlord:
- Has failed to provide an adequate response to the complaint within 14 days of its receipt, or
- Has served a Section 21 notice in reply
Where the tenant feels that the landlord’s response is inadequate, the tenant can complain to the local authority who must carry out an inspection of the property. If the inspection results in a local authority improvement notice, or itself carries out emergency repairs in response to the tenant’s complaint, any Section 21 notices already served on the tenant will be invalid. Any proceedings under way will be struck out by the court and a further valid Section 21 notice cannot be served for a further 6 months.
Note: the retaliatory eviction measures will not apply if the landlord can show that the relevant “improvement notice” is served due to the tenant’s breach of the tenancy contract (dilapidations due to the tenant’s actions), where the property is on the market for sale and the property is subject to a mortgage granted before the beginning of the tenancy.
Repayment of rent
Due to an anomaly with the new notice periods, it will sometimes be the case that a tenancy is brought to an end and/or the tenant has vacated well before the end of a period of the tenancy, and the tenant has paid rent in advance for that period. Tenants now have a statutory entitlement to repayment of pro-rota rent on a daily basis, resulting from a Section 21 notice.
1988 Housing Act
2004 Housing Act
Deregulation Act 2015
Spencer v Taylor 
Assured Shorthold Tenancy Notices and Prescribed Requirements (England) (Amendment) – Regulations 2015
Serving the New Section 21 Notices https://t.co/EoRAsmMTIa
— LandlordZONE (@LandlordZONE) May 26, 2017