Two recent court cases appear to have given landlords some much needed comfort dealing with their tenants.
The first case, Spencer -v- Turner, concerned the Court of Appeal’s decision regarding what was previously a settled area of law relating to the service of Section 21 notice of seeking possession. The Court held that a simple form of notice may be given by the landlord to a tenant to terminate a tenancy agreement that originally started as a fixed term but had thereafter become periodic. The significance is that this type of notice does not need to terminate on the last day of a term.
Crucially, landlords will now be able to serve a “simple” form of Section 21 notice that need not expire on the last day of the term, a pitfall which previously deemed many hundreds of notices invalid for being even one day out. This is provided that the relevant tenancy agreement started as a fixed term and simply continued upon expiry of the initial fixed term.
The second case involves a commercial leases of premises occupied by the Game retailer. In summary, Game went into administration in 2012, leaving its landlords within different shopping retail centres with very substantial rent arrears.
It had been thought that the natural consequence of entry administration was to offer the tenant a moratorium against any legal action by the landlord. However, in this case, a number of the Game retail shops continued trading. The administrator argued successfully that it should be entitled to receive the equivalent of rental payments on “a pay per trade” basis.
This is a significant point for commercial landlords who have been given the ability to charge the equivalent of “use and occupation charges” against tenants who, although entering administration, continue successfully to trade from a number of their premises.