Leap years are fascinating beasts. At their essence lies the simple task of synchronising the calendar year, which assumes that it takes exactly 365 days for the Earth to orbit the Sun, with the astronomical reality that it actually takes around six hours more. If left uncorrected over centuries, Britain would eventually celebrate Christmas in the height of summer.
History lesson
The Julian calendar, established by Julius Caesar and adopted throughout Europe until relatively modern times, added an additional day into February every four years. But even that was not precise enough, and by the late 16th century the Julian calendar was 10 days adrift from the astronomical year.
The Gregorian calendar resolved this anomaly by omitting three leap years in every 400 years. So, years ending XX00 are not leap years, unless they are divisible by 400. Which is why 2000 was a leap year but 1900 was not.
Most of Europe adopted the Gregorian calendar in 1582, but Britain held out until 1752, by which time we were 11 days out of synch with the astronomical year – and with the rest of Europe. To implement the Gregorian calendar, Wednesday 2 September 1752 was followed by Thursday 14 September.
Fearful of reduced tax revenues, the Treasury added the 11 days lost in September onto the end of the tax year, pushing it back from Lady Day (25 March) to 5 April 1753. That is why the fiscal year now always starts on 6 April.
Challenges
While the leap year solution is undeniably effective, having a day that only appears on the calendar once every four years presents its own challenges.
The Gilbert and Sullivan opera The Pirates of Penzance famously tells the story of poor Frederic, who is apprenticed to a band of pirates until his 21st birthday. When his birthday is revealed as 29 February, he is duty-bound to serve them until he is 84 years old!
Perhaps surprisingly, in most jurisdictions there are no laws relating to leap years. In the UK, a person born on 29 February cannot register to vote until 1 March in the year they turn 18, but there is no law specifying what happens when a right or an obligation is determined by reference to 29 February.
So, what are the potential leap year traps for the property community?
Unhappy anniversary
Leases are undoubtedly the biggest risk, since they will usually contain several references to years of the term and anniversaries of the term commencement date. This will encompass everything from decorating years to rent review dates, and from service charges to break dates, some of which are obviously more critical than others.
Imagine that a lease is completed with a term commencing on 29 February 2020, with a break option on the fifth anniversary of the commencement date. We can all hopefully agree that the tenant doesn’t have to wait until 2040 to exercise the break, but is the break date 28 February 2025 or 1 March 2025?
In practical terms, it may not matter that much. Modern leases invariably provide for a minimum rather than a fixed notice period, allowing the tenant to circumvent the issue by serving a break notice in good time quoting “the fifth anniversary” rather than a specific date. But why create that uncertainty and a potential trap?
Similar issues arise if the lease provides for rent reviews on “every fifth anniversary”.
If a lease completes on 29 February, or uses that date as its commencement date, then it is preferable to insert specific dates in break options and rent review clauses rather than relying on references to anniversaries.
Apportionments
29 February 2020 falls on a Saturday, which should limit the number of leases and other legal documents completed on that date. But does the leap year hold significance for documents completed on other days?
Imagine a contract to buy an investment property, or the assignment of a lease. Even though the transactions do not complete on 29 February, should the apportionment of rents and other sums reflect the fact that 2020 is a leap year?
Commercial property transactions will usually incorporate the Standard Commercial Property Conditions. Condition 9.3.4 provides for a daily rate equal to 1/365th of annual sums, thereby ignoring the reality of a leap year.
Conversely, the Standard Conditions of Sale used in residential conveyancing assume that income and outgoings “accrue at an equal daily rate throughout the year”, leaving open the possibility of apportioning on the basis of 366 days.
Ultimately, the difference is unlikely to be significant unless you are dealing with massive rents. On an annual rent of £1m, the daily rate differs by less than £7.50.
2020 vision
As well as being a leap year, 2020 is even more unusual in that the last two digits are the same as the first two. This only happens once every 101 years.
There is a warning circulating on social media of the risk of dating important documents this year in the informal style (eg 22/2/20), since it would be easy for an unscrupulous counterparty to amend the 20 to 2019 or 2021 and make it appear as if the document was completed in a different year.
While the lawyer in me has nightmares at the prospect of anyone dating legal documents in such an informal way, there will be many times over the course of the year that we all need to write the date. Whenever it is for anything vaguely official or important, I would encourage you to write the year in full.
Bill Chandler is a professional support lawyer at Hill Dickinson LLP
