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Flexible tenancies: when to serve an NSP, NTQ, NST, BN or FN – nobody said housing law was easy!

19.05.2020

By Jon Holbrook

When the government introduced flexible tenancies the idea seemed simple: a tenant would have a tenancy for a fixed term at the end of which the landlord would have a mandatory right to possession.

However, in addition to creating a mandatory right to possession (HA 1985, s107D) the scheme considerably complicated the possession process for the landlord that wants possession before the fixed term ends. Landlords now have to consider two-possession procedures that differ significantly depending on whether the tenant is old-style periodic or new-style fixed-term flexible. Let's look at the former first.

Periodic - secure

With 'periodic' tenancies landlords are used to there being two different routes to possession (although they are often combined in one-possession claim which is pleaded on an either/or basis). So long as the tenant satisfies the residence condition of occupying the tenancy as an only or principle home, statutory protection is normally retained, and the tenancy remains secure. The route to possession against a secure periodic tenant is by serving a prescribed notice seeking possession (NSP) that relies on statutory grounds, such as rent arrears or causing a nuisance (s83).

Periodic – non-secure

But where the tenant has lost secure tenancy status the underlying 'periodic' tenancy cannot be ended with an NSP and the landlord must serve a notice to quit (NTQ). The NTQ, if valid, ends the occupier's right of occupation and entitles the landlord to possession. There is no basis for proving a statutory ground when the occupier has lost secure tenancy status. The common law method of serving an NTQ is simple and straightforward.

A similar two-route approach to possession applies with fixed-term flexible Council tenants. But there are important differences for each route.

Fixed-term - secure

For so long as the tenant retains secure tenancy status (i.e. satisfies the only or principle home requirement etc) the landlord's route to possession is by serving a prescribed notice that relies on a statutory ground, such as rent arrears or causing a nuisance (s82). But the prescribed notice is different. It can be accessed from the HMSO website.

Whereas the notice for a secure periodic tenant is called a 'notice seeking possession' (NSP) the notice for a secure fixed-term tenant is called 'a notice seeking termination of tenancy and recovery of possession' (NST for short). The notices are similar and, in particular, require the landlord to state the grounds for possession and the particulars that give rise to those grounds. But the NST does not need to state a date before which proceedings will be begun.

More significantly, the NST includes some prescribed information that may be inappropriate. The NST states that the Housing Act 1985 "does not remove the need for your landlord to bring an action under [a re-entry or forfeiture] provision, nor does it affect your right to seek relief against re-entry or forfeiture". This wording in the NST, which was drafted prior to the flexible tenancy scheme being enacted, is arguably inappropriate. It was surely parliament's intent that the secure flexible tenancy scheme would, as with the secure periodic tenancy scheme, replace common law routes to possession with a simple to understand and use statutory scheme. Parliament's intent was surely not to put another hurdle (the need to forfeit a tenancy) in the way of local authority landlords seeking possession of flexible tenants who broke their tenancy terms. So, on this basis, the wording of the NST is inappropriate.

The High Court is expected to clarify this issue shortly when giving judgment in Croydon LBC v Kalonga. And, if it rules in favour of Croydon's argument that possession is achieved under a statutory scheme (without the need for forfeiture), the prescribed NST will need to be amended by Parliament. Until that happens local authorities should serve the prescribed NST with a covering letter that corrects, with reference to Croydon LBC v Kalonga, the inappropriate wording.

On the other hand, if the High Court rules against Croydon then landlords will need to brush-up on their working knowledge of forfeiture. In fact, as the next paragraph explains, an understanding of forfeiture will, in any event, be necessary for evicting fixed-term flexible tenants who have lost their secure tenancy status.

Fixed-term – non-secure

An NTQ cannot end a fixed term. In order to do this, the landlord must serve either a break notice (BN) or a forfeiture notice (FN). The right to serve such a notice must be established in the tenancy agreement because whereas the right to serve an NTQ is part and parcel of a periodic tenancy there is no comparable automatic right to terminate a fixed-term tenancy. Furthermore, because forfeiture contains many common law and statutory protections a flexible tenancy will ideally have a break notice provision that the landlord can rely on, in preference to forfeiture. An example of an agreement that establishes a right to serve a BN and an FN is available on Wandsworth's website.