It is a fundamental rule in property law that the duration of a lease must, from the outset, be certain or capable of being rendered certain. If it is not, the lease will be deemed void.
In the recent decision in Berrisford v Mexfield Housing Co-operative the Court of Appeal was asked to consider whether a clause in a periodic tenancy agreement that permitted the landlord to terminate the tenancy in limited circumstances had the effect of invalidating the lease agreement.
The Facts
The landlord, Mexfield, entered into what was described as an “occupancy agreement” with the tenant, Ms Berrisford. The terms of the agreement provided that:
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The term was to commence on 13 December 1993 “and thereafter from month to month until determined as provided in this Agreement...”; and
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Mexfield could only terminate the agreement (by giving one month’s notice to quit) if Ms Berrisford was either in arrears or in breach of the agreement.
In February 2008 Mexfield served a notice to quit on Ms Berrisford (despite the fact she was neither in arrears of rent or in breach of the agreement) and subsequently issued possession proceedings. Ms Berrisford defended the proceedings on the basis that the notice was defective.
The matter eventually came before the Court of Appeal. The Court held (in a majority 2:1 decision) that the clause restricting Mexfield’s power to serve a notice to quit to specific events (that may never occur) made the term of the lease indefinite and therefore void. Consequently, Ms Berrisford was held to occupy the premises on a monthly periodic tenancy that was validly determined by Mexfield’s notice to quit.
Comment
What is interesting about this decision is that all three Court of Appeal Judges unanimously called for the law in this area to be re-examined. Both of the judges who rejected the appeal expressed particular frustration at reaching a decision that did not give effect to the intension of the parties. However, until Parliament amends the current rules, both landlords and tenants should be careful to ensure that their tenancy agreements do not restrict the landlord’s ability to terminate the tenancy in a way that makes the term of the tenancy uncertain.
For more information on these issues please contact
Mario Betts
or your usual Lewis Silkin contact