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 7 year fixed term tenancy which had incorporated a starter period of one year.
A fixed term tenancy in this context is an assured shorthold tenancy for a fixed period. Fixed Term Tenancies (“FTTs”) were introduced and encouraged by the Government following the introduction of the Localism Act 2011 with the intention of replacing lifetime assured tenancies. In order to comply with the Tenancy Standard, social landlords should only offer FTTs for periods of at least 5 years to general needs tenants.
During the fixed term, the usual “no fault” section 21 Notice will not be effective and, as such, some FTTs are drafted to incorporate probationary periods of 1 or 2 years, whereby the FTT can be brought to an end prematurely by a break clause and service of a s21 Notice.
There was potentially difficulty with the above approach as FTTs of over 2 years let out by Registered Providers are also subject to section 21(1B) of the Housing Act 1988 which states that a Court may not make an order for possession unless the landlord has given the tenant not less than 6 months’ notice in writing confirmation that the landlord does not propose to grant another tenancy on expiry of the FTT and giving them information of how to obtain help or advice (in particular from the landlord). This is popularly known as the “Minded to” notice.
The facts in this case
Ms Bamber benefited from a 7 year FTT which included a probationary period of 2 years. Livewest served a s21 Notice in compliance with the break clause and during the probationary period to terminate the tenancy due to anti-social behaviour. It did not serve a “minded to” notice. Ms Bamber argued that the s.21 notice 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 or Appeal found that service of a s21 Notice during any probationary period of a FTT in compliance with the terms of the tenancy will act as service of a break notice; the tenancy would thereafter be treated as a periodic assured shorthold tenancy following expiry of the s.21 notice. 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 fixed period (i.e. after 7 years in the Bamber case) and accordingly s21(B) will not apply in any case where RPs look to end a FTT during its probationary period using the s.21 notice.
Lessons for RPs
Many RPs have started to switch back to lifetime assured tenancies due to the difficulties and the extra resources needed to operate FTTs, however for those RPs that are still using FTTs and in particular those RPs that are using FTTs which incorporate a probationary period, the clarity that this case brings is welcome news.
For more information please contact Anna Bennett, Solicitor in our Housing Management & Property Litigation team.