The certainty rule
Limits on the right to serve notice to quit on tenants with periodic tenancies could be problematic, says Andrew Dymond, barrister at Arden Chambers
In the recent case Berrisford v Mexfield Housing Co-operative Ltd, the Supreme Court considered a claim for possession against a tenant of a fully mutual housing association. This case could have wide-ranging implications for tenants of mutual housing associations and councils that grant non-secure tenancies to homeless people.
Tenants of fully mutual housing associations do not have security of tenure, principally because they are also members of the association itself.
Most tenancies granted by such associations are periodic - meaning they run from week to week or month to month - and can therefore be terminated by notice to quit. However, it is common for the tenancy agreement to limit the circumstances in which the landlord can serve notice, for example, breach of a condition by the tenant.
This limitation brings into play one of the fundamental principles of landlord and tenant law, namely that a tenancy must be for a ‘certain’ term, meaning it must be possible to know when it will come to end.
Although a periodic tenancy may last for an indefinite length of time, it does not go against the certainty rule because either party may terminate it by notice to quit expiring at the end of a period. For this reason, however, a limitation on serving notice is inconsistent with the certainty principle.
In a 1992 case, Prudential Assurance Co. Ltd v London Residuary Body, it was held that an agreement containing such a limitation was void but that a periodic tenancy arose by operation of law because the tenant had taken possession and paid rent. That tenancy could be terminated by notice to quit at any time.
In the Berrisford v Mexfield Housing Co-operative case, clause 6 of the tenancy agreement provided that the association could bring the tenancy to an end where the tenant was in breach. The association chose not to rely on any breach but served notice to quit. It succeeded in the Court of Appeal.
The Supreme Court, however, allowed the tenant’s appeal. The court decided not to depart from the certainty rule. Thereafter, however, it departed from the reasoning in the Prudential case. In common law, such an indeterminate tenancy is a ‘lease for life’. As the agreement created a lease for life, it was converted by section 149(6), Law of Property Act 1925, into a 90-year lease, which could only be terminated by the association under clause 6, that is, forfeiture for breach.
On the one hand, the result is fair to the tenant in that she received the protection that her tenancy agreement appeared to give her. On the other, it is remarkable that she should have a 90-year lease.
The case raises significant issues not just for fully mutual housing associations but for any landlord that grants tenancies which do not have security of tenure but which limit the right to serve notice to quit, for example, non-secure tenancies granted by local authorities to homeless people.