Stephen Gerlis points out the often delicate wording of tenancy agreements and demonstrates the danger of an inexperienced approach



Residential tenancies are a technical minefield for the unwary. Get a notice to determine wrong by one day - or even one word - and possession may be thwarted.



Drawing tenancy agreements, too, can be fraught with danger. The following case illustrates how insufficient attention given at the drafting stage can render a tenancy agreement confusing for all involved. It also shows how just one word can make the difference between clarity and ambiguity.



The assured shorthold tenancy agreement in question in Church Commissioners for England v Gisele Meya (2006) EWCA Civ 821, (2006) All ER (D) 234 (Jun), was described by Lord Justice Ward, giving the judgment of the Court of Appeal, as 'unusual'. It was riddled with inconsistencies, although most of these were irrelevant. For example, it was designed for a company letting that was not appropriate for an assured shorthold tenancy. In addition, the term was for one year less a day but the covenant for payment of rent required payment quarterly in advance, which meant that the tenant had, in fact, to pay for an extra day. These anomalies, said the court, demonstrated 'that not a great deal of concentrated thought was put into the agreement'.



The relevant clause described the tenancy as running from 1 January 2004 to 30 December 2004, with 'a clear yearly rent of £17,680 per annum... payable in advance by equal quarterly payments'. This novel arrangement, more suited to a commercial lease, gave rise to the conundrum at the centre of the case - for the purposes of service of a notice to determine, was the rental period a year or a quarter?



The landlords served a notice to determine a periodic tenancy under section 21(4)(a) of the Housing Act 1988, the initial tenancy period having expired. Although it was a two-month notice, it had the usual saving clause that the alternative date for possession would be 'at the end of that period of your tenancy, which will end after the expiry of two months from the giving of this notice, whichever is the later'.



There was no argument that the notice was good to determine a quarterly tenancy at the end of the next quarter. However, the tenant took the view that this was a yearly tenancy and therefore the notice was premature.



Deputy District Judge Lawrence at Central London County Court, reluctantly concluding that he was bound by authority to do so, dismissed the claim for possession, but gave permission to appeal straight to the Court of Appeal.



The relevant statutory provision is section 5(3)(d) of the 1988 Act, which deals with the definition of a periodic tenancy by providing that one of the conditions is that 'the periods of the tenancy are those for which rent was last payable under the fixed-term tenancy'. Section 21(4)(a) of the Act also refers to a notice to determine a periodic tenancy being referable to a 'period of the tenancy'.



Reference was made by both the Deputy District Judge and the Court of Appeal to the case of Laine v Cadwallader (2000) 33 HLR 397, in which a monthly rent was specified to be payable 'every two months in advance'. The case concerned the surrender of a tenancy by the tenant, and was therefore not on all fours with the present case. However, the Court of Appeal did note the comments of Lord Justice Kennedy that the rental period was in fact one month, even though the time for payment was bi-monthly, which was 'immaterial'.



In Adler v Blackman (1953) 1 QB 146, the term was for one year with rent payable weekly. The tenant argued that, having held over after a year, the tenancy was in fact a yearly one with half-a-year's notice required. The court in that case held that, where the rent was expressed as so much per year, the rental period was yearly, with the rent being paid in weekly instalments. However, where the term was for a year but the rent is expressed as weekly, then the rental period would be a week.



In Church Commissioners v Meya, the rent was expressed to be yearly, but payable quarterly. It looked, on the face of it, as if half-a-year's notice was required. However, the common law has to give way to any statutory modification, and section 5(3)(d) of the 1988 Act clearly defines rental periods as the same as those for which 'rent was last payable under the fixed-term tenancy'. In the light of this, Lord Justice Ward considered the language in the tenancy agreement, providing as it did for a yearly rent payable quarterly, to be ambiguous, because 'it can as equally be said that it is the annual rent of £17,680 that is payable as that it is the quarterly rent of £4,420 that is payable. An annual rent is payable but it is payable by quarterly instalments. One cannot tell which from which because both sums can be equally said to be payable'.



Initially, Lord Justice Ward was attracted by the idea of a yearly rent. If the tenant had handed in the keys in the first month, she would have been liable for a full year's rent, not just a quarter's rent. However, this was to miss an important word in the section 5(3)(d) definition: the word 'last' before the word 'payable'. Without that word, it could be argued that the rent payable under the tenancy was on a yearly basis. But the answer to the question 'What was the period for which rent was last payable under the fixed-term tenancy?' is susceptible of more certainty. Lord Justice Ward said: 'The last instalment became payable in September. Asking then for what period that last payment was payable provides the answer that it was for a quarterly period.' The appeal succeeded - 'The Deputy District Judge's instincts were correct'. Possession was ordered.



There are lessons to be learned from this. The first and most obvious is that solicitors would be well advised to rely on proved printed tenancy agreements rather than trying to draft their own or adapt unsuitable versions, where mistakes are more likely to be made and are likely to be costly. The second is that only those fully experienced in residential landlord and tenant law should tread the ground over which the unwary have ventured, stumbled and fallen.



District Judge Stephen Gerlis sits at Barnet County Court