A periodic tenancy is where the original fixed term has expired but the parties continue on the same basis, or a rolling contract without a fixed term (e.g. monthly)
Is this the same tenancy or a new grant?
An issue which arose in one of our cases (Walcott v Jones (2017)) was over whether each period (of a periodic tenancy) was a ‘grant’ of a new tenancy or merely an extension of the original tenancy.
What does this really mean in terms of property law?
Since the Deregulation Act 2015, all ‘new’ tenancies require more stringent preconditions to be met (provision of a government leaflet entitled ‘How to Rent’, an Emergency Performance Certificate and a current Gas Safety Certificate) before a section 21 notice can be served to obtain possession of a property.
Facts of the case
Our client was the owner of a property in which her parents resided. The main case was about who actually beneficially owns the property. The facts which were agreed for the sake of the appeal, were that the tenants (her parents) had resided at the property on the basis of an oral monthly tenancy which started from 30 August 2007.
A section 21 notice was served on 21 June 2017. As this was after the Deregulation Act 2015, the tenants tried to argue that the notice was invalid as the relevant requirements under the Act had not been met.
This would only apply, if every month, a ‘new’ tenancy was granted (after 1 October 2015).
Was the tenancy granted on 30 August 2007 or every month since August 2007 until terminated by the notice?
The first time this went to Court the Judge agreed with the tenants and our client’s claim was struck out.
Our client appealed and His Honour Judge John Hand overturned this ruling.
It was decided that whether a period tenancy is an extension of the original tenancy or a re-letting of the tenancy, it did not matter, as neither could be argued to be a ‘grant’ of a tenancy.
A periodic tenancy is a single tenancy pursuant to the Law of Property Act 1925 therefore the Act does not apply.
What does this mean going forward?
From October 2018 the Act will apply to all assured shorthold tenancies, regardless of when (before or after 1 October 2015) or how they started (fixed or periodic), so there is less than 6 months left of grace for landlords.
But the fact that a periodic tenancy is an extension of original tenancy may have a bearing on tenancy deposit schemes and wider implications.