Does a Periodic Tenancy mean a new tenancy every month? By LandlordZONE - 8th December 2017
Under English law, once a fixed period tenancy comes to an end it is automatically replaced with a periodic one, based on the rent payment period (commonly monthly), unless the original tenancy is terminated. With an Assured Shorthold Tenancy (AST) termination would be if the tenant leaves at the end of the term, or is served a 2 months’ notice by the landlord effective at the end of the term.
The periodic tenancy rolls on indefinitely if the parties wish it to. Interestingly, a determination in a test case (Superstrike Ltd v Marino Rodrigues 2013)1, contrary to what many in the industry believed at the time, a statutory periodic tenancy is a new and distinct tenancy, not a continuation of the tenant’s previous fixed-term status.
On this basis a tenant sought to argue that a periodic tenancy is a new tenancy EVERY month. In Walcott v Jones & Jones November 2017, a county court appeal, the tenants argued that in their tenancy, which had started prior to the introduction of new rules (1st October 2015), the landlord had not complied with those new rules before serving his s21 notice, and that therefore the notice was invalid.
Tenancies commencing before the change date and up to 1st October next year (2018) do not have to comply with these new rules which were brought in under the Deregulation Act 2015 (s21A and s21B of Housing Act 1988) – meaning under these new rules the landlord must provide the tenant with a gas safety certificate (if applicable), an EPC and the DCLG “How to Rent Guide” before a valid s21 notice can be served.
Clearly, if the plaintiffs could establish that the tenancy renewed each time it could be argued that the landlord did not comply, and that was the original decision of the county court.
However, according to a note on the case on Giles Peaker’s Nearly Legal Blog, Ms W being the landlord of the Joneses, it was accepted for the purposes of the appeal that the new rules only apply to a tenancy that commenced on or after 1 October 2015 and until October 2018, including any “renewal tenancies” – where a new agreement is signed. The plaintiffs’ argument went that as the grant of tenancy was a monthly period from the start, (there was no written agreement), each month represented a new grant.
The appeal judge, Judge Hand QC, held that the grant of a periodic tenancy meant that if notice was not given in accordance with the agreement the tenancy would continue after the original term. Whether this was considered as an extension of the original term or a ‘deemed re-grant’ did not matter, as for the purposes of Housing Act 1988 (as amended), neither amounted to a ‘grant’ of a tenancy. Parliament did not intend a ‘grant’ in such circumstances. The county court judge had erred in law and the appeal was allowed.
A similar point arose recently in Leeds City Council v Broadley 2016 2 concerning council tax liability, where it was acknowledged that a periodic tenancy was a singular tenancy, as per the Law of Property Act 1925. In that case the court of appeal held that a tenancy grant for a year or six months, and thereafter a month to month periodic tenancy was indeed a single tenancy.
The conclusion to all this is that a periodic tenancy it does not result in a new tenancy each period – it is in fact a single ongoing tenancy, from period to period. But, as per Superstrike, a statutory periodic tenancy that arises at the end of an AST fixed term, is a new tenancy, not a ‘renewal’ tenancy.