LANDLORD AND
TENANT LAW
Certainty of term
MAY 2012
BPP LAW SCHOOL OPINION PIECE LANDLORD AND TENANT LAW – MAY 2012
0 LANDLORD AND TENANT LAW – CERTAINTY OF
TERM
This paper considers the legal position of a tenant in rented accommodation and the recent
Supreme Court case of Berrisford v Mexfield on the requirement that a tenancy must last for a
certain term.
THE REQUIREMENT OF CERTAINTY OF TERM IN
LEASES
It is a well known requirement that for a lease to be valid it must last for a certain term. The
maximum term must be certain from the outset. Prior to Berrisford , there were only two leading
modern cases on the requirement of certainty of term: Lace v Chantler [1944] KB 368 and
Prudential v London Residuary Body [1992] 3 WLR 279. In Lace, a lease ‘for the duration of the war’
was held to be void. (A further good example is Birrell v Carey (1989) 58 P & CR 184, where a lease
“for so long as the company is trading” was held void.) In Prudential, the House of Lords held that a
lease which was to last until the landlord served notice requiring the land back for road widening
was an invalid term, because it could not be known at the outset when the landlord would require
the land back for that purpose.
Their lordships explained that a lease can be for a fixed term or for a periodic term (e.g. weekly,
monthly, quarterly, yearly, all of which are considered certain terms) but it cannot be for an
indefinite period subject to the landlord’s right to terminate the lease at a time not known at the
outset. The House of Lords expressed dissatisfaction at the rule that the maximum duration of a
lease must be ascertainable from the outset, and expressed the hope ‘that the Law Commission
might look at the subject to see whether there is in fact any good reason now for maintaining a rule
which operates to defeat contractually agreed arrangements between the parties’ (per Lord
Browne-Wilkinson at page 287G).
Berrisford v Mexfield Housing Co-operative Limited [2011] UKSC 52 , [2011] 3 WLR 1091
Despite the hope of the House of Lords,
Prudential has remained the law. However, the
Supreme Court recently revisited the requirement
of certainty of term in the recent case of Berrisford
v Mexfield Housing Co-operative Ltd. In this case,
the Supreme Court made the very significant
decision that an uncertain term granted to an
individual tenant should be treated as a lease for
life and therefore be converted by s.149 (6) Law of
Property 1925 to a lease for 90 years determinable
on the tenant’s death, and also determinable in
accordance with the provisions in the agreement
for earlier termination. Further, the Supreme Court
Justices made strong comments in favour of
abandoning the requirement of certainty of term,
but stopped short of actually doing so.
BPP LAW SCHOOL OPINION PIECE LANDLORD AND TENANT LAW – MAY 2012
1 THE FACTS AND THE ARGUMENTS IN BERRISFORD
Mexfield Housing Co-operative is a fully mutual housing co-operative association. As part of a
mortgage rescue scheme, they buy properties from mortgagors who are in debt, and let them back
to the mortgagor, who becomes a member of the Mexfield co-operative. Under this scheme,
Mexfield bought Ms Berrisford’s house, and let it back to her.
Clause 1 of the letting agreement provided that:
‘Mexfield shall let and Ms Berrisford shall take the premises from 13th December 1993 and
thereafter from month to month until determined as provided in this agreement.’
The only provisions for termination were as follows:
Clause 5: ‘This agreement shall be determinable by Ms Berrisford giving Mexfield one month’s
notice in writing.’
Clause 6: ‘This agreement may be brought to an end by Mexfield by the exercise of the right of reentry specified in this clause but ONLY in the following circumstances:
a)
b)
c)
d)
If the rent reserved hereby... shall... be in arrear
If Ms Berrisford shall at any time fail... to perform... any of the terms of this agreement
If Ms Berrisford shall cease to be a member of Mexfield
If a resolution is passed... to dissolve Mexfield’
Ms Berrisford fell behind with her rent. As the landlord was a mutual housing association, the
tenancy did not have any statutory security of tenure under the Housing Acts 1988 or 1985. (Lord
Hope, at paragraph 81, suggests that such tenancies should have security of tenure.) Therefore, the
basic common law of landlord and tenant applied.
The landlord did not want
to reply on the forfeiture
provisions in clause 6,
because forfeiture was
unlikely to be ordered in
practice. The court
would in reality have
ordered relief from
forfeiture. Therefore, the
landlord served just over
a month’s notice to quit.
The landlord argued that
that was all that was
required: they argued
that the express terms
for termination did not create a valid certain term, but that by payment and acceptance of rent it
was an implied weekly or monthly tenancy, and they only needed to serve a period’s notice to quit
(and also comply with the statutory minimum of 4 weeks notice required by s.5 Protection From
Eviction Act 1977).
BPP LAW SCHOOL OPINION PIECE LANDLORD AND TENANT LAW – MAY 2012
2 However, the tenant argued that:
a) The agreement could not be construed as a monthly periodic tenancy. It only allowed for
termination by the tenant under clause 5 and by the landlord under the circumstances in
clause 6.
b) Such an arrangement is not a valid tenancy in law due to uncertainty of term.
c) Before 1926, the common law treated such an uncertain term as a lease for life subject to
the determination rights under clauses 5 and 6.
d) S.149 (6) LPA 1925 converts such a lease for life to a term for 90 years subject to the
landlord’s right to terminate on the tenant’s death and clauses 5 and 6.
e) As the tenant had not served notice under clause 5 and the landlord was not relying on
clause 6, Mexfield was not entitled to possession, and the 90 year tenancy created by the
agreement was still subsisting.
THE DECISION
The Supreme Court accepted the tenant’s arguments.
The lead judgment was given by Lord Neuberger. He firstly
accepted that, on construction of the agreement, the tenancy was
not a monthly tenancy, but could only be terminated under
clauses 5 or 6. Secondly, he held that such an arrangement was
not capable of being a valid tenancy as it stood: it failed for
uncertainty of term, because it contained a fetter of uncertain
duration on the landlord’s right to serve a notice to quit. It could
not be known when the landlord would serve notice under clause
6. The Supreme Court reluctantly followed Prudential on this
point.
At this point, Lord Neuberger examined the ancient case law requiring certainty of term, and
expressed disapproval of such a requirement (paragraph 34). He could not see a good justification
for it. However, for various reasons he did not support jettisoning the requirement (paragraph 35).
Lady Hale thought the requirement of certainty of term should be reconsidered by the Supreme
Court or by parliament as a matter of urgency (paragraph 96). Lord Clarke thought there was
much to be said for the view that the certainty rule should now be abandoned (paragraph 105).
Lord Dyson said that the radical solution of doing away with the uncertainty rule was attractive
(paragraph 119).
However, the Supreme Court did not need to do away with the uncertainty rule, because the third
step in Lord Neuberger’s reasoning was that he examined ancient case law and held that before
1926 such an uncertain term was automatically treated as a lease for life subject to the right to
terminate under clauses 5 and 6. On this point, he rejected a contention by the landlord that an
uncertain term was only regarded as a lease for life where the parties intended that. He also stated
obiter that in any event, on construction of this agreement, it was intended that Ms Berrisford enjoy
the premises for life. Lady Hale agreed with this conclusion (paragraph 94). Lord Neuberger based
this interpretation on clause 6( c ) of the agreement in particular; but it could be questioned
whether clauses 1, 5 and 6 (above) do show an intention to grant a lease for her life.
BPP LAW SCHOOL OPINION PIECE LANDLORD AND TENANT LAW – MAY 2012
3 The fourth and final step in Lord Neuberger’s
reasoning was that, given the agreement would
have given rise to a tenancy for life prior to 1926,
s.149 (6) Law of Property Act 1925 now treats
such tenancies as a term of 90 years
determinable on the death of the tenant, subject
to the termination rights in clauses 5 and 6.
Thus Mexfield was not entitled to possession
based on their month’s notice to quit.
The court explained away the Prudential decision
by the fact that the tenancy for life argument
was not raised or considered in that case. In any
event, as Lady Hale points out (paragraph 92), it
would have done the tenant no good in that case,
as the tenant was a company ‘... and companies
cannot have a lease for their own lives’.
As an alternative, the Supreme Court discussed
obiter whether, even if the arrangement could
not be valid as a tenancy due to uncertainty of
term, it could simply be valid on its terms as a
contract between the parties, even though it
would not create a proprietary interest binding on successors. The court discussed this at length,
and thought that it could be valid as a contract.
COMMENT ON BERRISFORD
This is a very significant decision on certainty of term. The Supreme Court held that an uncertain
term to an individual should be treated as a lease for life, which is converted by statute to a lease
for 90 years. This is not an approach the courts have taken since 1925.
Further, the Supreme Court made bold statements in favour of abolishing the requirement of
certainty of term.
Lord Dyson stated (paragraph 119) that the decision in the case ‘is a just result which plainly
accords with the intention of the parties’. However, is that true from Mexfield’s point of view? The
co-operative now finds that their tenants have a lease for life, which may not have been their
intention. Even if the result was just in this case, there may be other arrangements created for an
uncertain duration where a lease for 90 years was not intended.
It also means that what was envisaged as a short lease will now, possibly unknown to the parties,
be required to be by deed, registered and not subject to the landlord’s implied repairing obligations
in short leases under s.11 Landlord and Tenant Act 1985.
Further, there is now an unsatisfactory distinction between leases to individuals and leases to
companies, which cannot be saved as a lease for life. Lord Dyson in paragraph 119, indicates that
there is no compelling justification for the distinction.
BPP LAW SCHOOL OPINION PIECE LANDLORD AND TENANT LAW – MAY 2012
4 Finally, what of the statements that the requirement of certainty of term should be abandoned? If
the Supreme Court thinks that there is no good justification for the rule, that must carry huge
weight. In the case of a detailed agreement, in which the landlord sets clear circumstances in
which he can serve notice to quit, even though the parties don’t know exactly when that will be, it is
arguable that there is no reason why such an agreement should not be valid. The parties should be
free to make such a contractual arrangement. However, what if a landlord simply lets his house to
a tenant ‘until I decide to end the lease’? Is that really an appropriate way to allocate a property
right? Will that be interpreted as a lease for the tenant’s life?
To avoid these problems, a landlord should either expressly grant the tenancy as a periodic
tenancy, i.e. an express weekly, monthly, quarterly or yearly tenancy, without any further
restrictions on when the landlord can serve a notice to quit; or the landlord should specify a
maximum fixed term, subject to the landlord’s right to determine the term early on the happening
of an uncertain event. As long as there is a maximum fixed term, such a break clause will be valid.
For other articles on this case, see:
A supremely unsatisfactory solution, Sandi Murdoch, Estates Gazette, EG (2012) No 1202 Page 67
Mexfield: a missed opportunity, Janet Bignell, Landlord & Tenant Review, L & T Review (2012) Vol 16
No 1 Pages 1-2
Uncertainty of term-orthodoxy side –stepped in favour of a just result, Mark Pawlowski, L & T Review
(2012) Vol 16 No 1 Pages 16-22
Time to change the rules, John Summers and Elizabeth Fitzgerald, New Law Journal, NLJ (2011 Vol
161 No 7494 pages 1733-1735
The future of housing co-operatives: Mexfield and beyond, Caroline Hunter and Dave Cowan, Journal
of Housing Law, JHL (2012) Vol 15 No 2 pages 26-32
AUTHOR
Jonathan Clore is a tutor at the BPP Law School. He teaches on the GDL, LLB and BPTC. His areas
of expertise and interest are land law, the law of equity and trusts, and landlord and tenant law.
BPP LAW SCHOOL OPINION PIECE LANDLORD AND TENANT LAW – MAY 2012
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