Residential landlords – Section 21 update: Caridon Property Ltd v Monty Shooltz

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16/03/2018

Walker Morris’ Housing Litigation expert Zoe McLean-Wells explains a recent case which highlights an essential pre-requisite for landlords wishing to recovering possession of residential premises by service of a notice under section 21 of the Housing Act 1988.

Recovering possession by section 21 notice

Residential landlords will be aware that serving two months’ notice under section 21 of the Housing Act 1988 is a means of bringing an assured shorthold tenancy to an end, without the landlord having to give a reason for requiring possession.

However, the situation is not straightforward because of the requirements which must be complied with before a section 21 notice can be validly served. Currently, for new tenancies entered into on or after 1 October 2015 [1], the requirements include the need to provide a valid Energy Performance Certificate (EPC); the current version of the booklet: ‘How to rent: The checklist for renting in England’; and a valid Gas Safety Certificate (GSC).

The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (the 2015 Regulations) specifically require that a landlord must provide a GSC to a tenant at the start of the tenancy, before the tenant takes up occupation.

A crucial question…

Whether a landlord’s failure to provide a GSC at the outset is an absolute bar to service of a section 21 notice to recover possession later down the line, or whether it is a breach that can be rescued by later provision of a GSC has now been addressed in the case of Caridon Property Ltd v Monty Shooltz [2].

The landlord’s possession claim had been dismissed at First Instance on the basis that a GSC had not been provided before the tenant took up occupation.  (A GSC had, however, been provided at a later date).  The landlord appealed and the case was heard before Circuit Judge HHJ Jan Luba QC, a very experienced housing lawyer, at the Central London County Court.

The landlord argued that, when read together and purposively, the 2015 Regulations and the Gas Safety (Installation and Use) Regulations 1998 disapplied the time limits for providing GSCs, so as to avoid a timing breach operating as an absolute bar to service of a section 21 notice. On appeal, Judge Luba did not agree.

…answered for the tenant

Finding for the tenant and dismissing the appeal, HHJ Luba stated that the requirement to provide a GSC to a tenant at the outset is a “once and for all obligation on a prospective landlord in relation to a prospective tenant”. Also, that if the intention was that a once and for all breach should not debar a landlord from serving a section 21 notice, then the legislators could have stated that expressly in the 2015 Regulations.  HHJ Luba also stated: “…if the… GSC was not given to the tenant before he or she occupied, this is a breach which cannot be rectified”.

WM Comment and practical advice

Whilst this decision is not strictly binding on other courts, it is likely to have a persuasive effect on other District Judges throughout the country if it is cited in Court. The decision is already receiving considerable publicity and it is likely to be relied upon by tenants as an absolute defence to section 21 possession claims wherever the landlord has failed to provide a GSC at the outset of a tenancy. Advocates acting for tenants may also seek to argue that, by analogy, the same principle should apply where the landlord fails to provide an EPC and possibly also the How to Rent Booklet.

The implications of Caridon v Shooltz are likely to be wide-ranging and it may well be that the case is appealed again, this time to the Court of Appeal.  Further or alternatively, if its effect is contrary to what the legislators intended, it is possible that the 2015 Regulations could be amended.  Walker Morris will monitor and report on any developments.

In the meantime, landlords and their managing agents should ensure that, in all cases, tenants are provided with an EPC, a GSC and the How to Rent Booklet before start of the tenancy and before the tenant moves in.  If the tenancy is held jointly, these documents should be issued to all prospective tenants.  Landlords and their agents should also keep clear records of both the date of issue of these documents and of the tenant’s receipt, in case evidence is required in any subsequent possession claim.

For further information or advice, please do not hesitate to contact Walker Morris’ Housing Litigation and Management specialists.

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[1] including a written renewal after that date, but not where an assured tenancy becomes a statutory periodic tenancy on or after 1 October 2015 where the original fixed term was granted before 1 October 2015
[2] Central London County Court, 2 February 2018 (unreported)

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