LiveWest Homes Limited (Formerly Liverty Limited) v Sarah Bamber  EWCA Civ 1974
Registered Providers will welcome the decision of the Court of Appeal in this case, which examined the effect of a break clause in a fixed term tenancy (“FTT”) which had incorporated a starter period of one year.
A FTT is an assured shorthold tenancy for a fixed period. For most general needs tenants the term will be for at least 5 years. During the fixed term, a “no fault” s21 Notice will not be effective and as such some FTTs were drafted incorporating probationary periods of 1 or 2 years, where the FTT could be brought to an end early by a break clause and service of a s21 Notice.
Ms Bamber benefited from a 7 year FTT which included a probationary period of 2 years. Livewest served a s21 Notice during the probationary period. Ms Bamber argued that it could not be effective due to s21(B) Housing Act 1988 which stipulates that a “minded to” notice is to be served at least 6 months before a FTT ends.
The Court found that service of a s21 Notice during any probationary period of a FTT will act as a break clause; the tenancy would thereafter be treated as a periodic assured shorthold tenancy. The Court found that the 6 month “minded to” notices as set out in s21(B) were only relevant where a FTT was due to expire at the end of the term and accordingly s21(B) will not apply in any case where RPs look to end a FTT during its probationary period.
Many RPs have started to switch back to assured lifetime tenancies due to the difficulties and the extra resources needed to operate FTTs, however for those RPs that are still using FTTs, the clarity that this case brings is welcome news.