Tenancies which are ‘granted’ prior to the Deregulation Act 2015

In Walcott v Jones and Jones a Court held that a landlord was not obliged to comply with the Deregulation Act 2015 when serving a section 21 for a tenancy that commenced in 2007. It also held that a periodic tenancy continues from period to period and does not proceed as a series of new tenancies commencing at the start of each period.

In June 2016, the landlord served a Section 21 notice on her tenants for an oral monthly tenancy that commenced in August 2007. Some of the facts of the case were disputed between the parties but for the agreement that they had entered into an assured shorthold tenancy.

The tenants argued that the Section 21 served was invalid because the landlord had failed to adhere to the requirements of the Deregulation Act 2015 prior to serving the notice. Many will recall that the Deregulation Act requires landlords to obtain a gas safe certificate, ‘How to Rent’ Guide and EPC among other things, and give them to the tenant at the commencement of the tenancy. These requirements only apply to tenancies which commenced (including renewals) on or after 1 October 2015. The argument posed by the tenants was that the oral monthly tenancy was a re-grant of the tenancy every month. The deputy district judge agreed with the tenants and held that the tenancy was a re-grant at the end of each period and held that it was therefore subject to the Deregulation Act. Consequently, the landlord’s claim for possession was struck out.

The landlord appealed the decision.

The appeal judge held that with a periodic tenancy, if notice is not given then the tenancy is not limited to the original period but continues. It did not matter whether one regarded that as a deemed re-letting or an extension of the original term, in the end neither a re-letting or an extension is a “grant” of a new tenancy. Parliament did not intend there to be a grant of a tenancy in these circumstances. In other words, a periodic tenancy continues from month to month rather than a fresh tenancy being granted each month. The appeal was therefore allowed, and possession granted.

Comment

A periodic tenancy is a single tenancy pursuant to the Law of Property Act 1925 therefore the Deregulation Act 2015 did not apply. However, it is important to note that from October 2018 the Deregulation Act will apply to all assured shorthold tenancies no matter when and how they commenced. The point that a periodic tenancy proceeds as a series of extensions rather than re-grants is important more generally however and has implications for deposit protection as well as other areas.

 

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