Section 21 Notice who is the entitled to serve sub-tenants with ASTs?

Barrow & another v Kazim & others (2018) EWCA Civ 2414

This case highlighted the importance of checking who can be validly served a section 21 notice in accordance with the Housing Act 1988 (HA 1988) in relation to an assured shorthold tenant whilst there is an intermediate lease in situ.

Usually when a head lease is terminated the sublease will also come to an end. However there is an exception to this rule within section 19 of the HA 1988, which provides protection to tenants of lawfully granted assured tenancies.

In this particular case, the head landlord served notice on both the intermediate tenant and the sub-tenant. The sub-tenant occupied the property in accordance with a lawfully granted assured shorthold tenancy (AST).

The court ruled that the head landlord was not entitled to possession of the property whilst the intermediate lease continued, and therefore whilst the intermediate lease continued the head landlord could not terminate the sub-tenant’s AST.

If the intermediate lease was determined first, the head landlord would at that point become the direct landlord to the sub-tenant, and the head landlord would only at that stage be able to serve the section 21 notice directly on the sub-tenant to terminate the AST.

This necessary sequence of events is likely to delay a head landlord’s ability to gain possession of the property. With foresight, a landlord could incorporate terms within the intermediate tenant’s lease requiring the intermediate tenant to serve notice on any sub-tenants following receipt of a notice from the head landlord themselves.

There are a number of other elements to consider when serving a section 21 notice such as:
• checking that the fixed term has lapsed, if not you may want to consider a separate route via section 8 of HA 1998;
• checking that you have complied with the pre-conditions to serving the section 21 notice such as also serving a valid EPC, Gas Safety Certificate and How to Rent Guide on the Tenant; and
• if the Tenant has a deposit, checking that the deposit was protected within 30 days of receipt and if not, considering the implications of this.

This is a non-exclusive list. If are looking to terminate a tenancy, and are unsure whether you can validly serve a notice on your tenant or any sub-tenants, our Residential Property Dispute Resolution Team can guide you through the process.