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19 June 2020

Better late than never?

Landlords of Assured Shorthold Tenancies (ASTs) will be well aware of the requirements introduced by the Deregulation Act 2015 that a landlord serving a Section 21 Notice to terminate an AST must have served a gas safety certificate on a tenant. 

The High Court in Caridon Property Limited v. Shooltz (2018) found that where a landlord failed to provide a future tenant with a gas safety certificate prior to entering into occupation, that was a breach which could not be later remedied. The effect being that a landlord would not be able to serve a Section 21 Notice (the so called “no fault” process) to terminate an AST. This decision was followed by the lower Court in Trecarrell House Limited v Rouncefield and the landlord appealed to the Court of Appeal.

The Court of Appeal has now handed down Judgment in Trecarrell House Limited v Rouncefield (2020) providing some much needed clarity on this issue. The Court of Appeal held that a landlord may serve a valid Section 21 Notice even if the gas safety certificate is served late, after a tenant moves into a property.

The Facts

Mrs Rouncefield was the tenant of Flat 2, Trecarrell House in Cornwall under an AST and the landlord was Trecarrell House Limited. Under Section 21 of the Housing Act 1988 a landlord may obtain possession of property let on an AST by giving not less than 2 months’ notice in writing of his intention to do so (currently at least 3 months’ by virtue of changes introduced by the Coronavirus Act 2020 ). It is not necessary for a landlord to establish a ground of possession.

In recent years, various legislation has been introduced regulating the landlord’s ability to serve a Section 21 Notice. This case concerned the requirement to provide a tenant with a gas safety certificate (“GSC”) (under the Gas Safety (Installation and Use) Regulations 1998 (“the Regulations”)). In particular, the Regulations provide that a copy of a GSC should be given to any “new tenant” “before the tenant occupies those premises”. There is also a requirement to provide a copy of the GSC to an “existing tenant” within 28 days of the gas safety check.

Mrs Rouncefield’s tenancy was granted in February 2017 but her landlord did not provide her with a copy of the GSC (dated 31 January 2017) until November 2017 (9 months after she had taken up occupation of the flat). Mrs Rouncefield argued that the landlord’s failure to provide her with the GSC before she took up occupation prevented the landlord from serving a valid Section 21 Notice.

The Court of Appeal decision

By a majority of 2 to 1, they interpreted the legislation as enabling a landlord to serve a valid Section 21 Notice even if the GSC was served after the tenant had moved into the property, provided that the GSC was served prior to the Section 21 Notice. 

The Court of Appeal also confirmed that, as far as the landlord’s continuing duty to provide an existing tenant with a GSC within 28 days of each gas safety check (at intervals of every 12 months) is concerned, the landlord may serve a valid Section 21 Notice provided that the GSC is served before the Section 21 Notice even if the gas safety inspection did not take place within the required 12 months.

The Court took into account the following factors:

  • The Court appreciated the delicate balancing exercise between the safety of occupiers with the ability of a landlord to take possession of its property at the end of the tenancy, without having to prove a ground for possession. The effect of the previous decisions had been that a landlord may have been prevented permanently from serving a valid Section 21 Notice for failure to serve a GSC before the tenant moved into the property with the result that they would only be able to obtain possession if they could establish a ground for possession (via the Section 8 process). 
  • The Court took the view that if a breach of the requirement to provide a new tenant with a GSC had such stark consequences for the landlord then this must apply in every case of late delivery, even if the delay is only minimal.  However, they took the view that this was not the consequence intended by the legislation given that there was no 28 day deadline for service of the GSC in respect of a “new” tenant only in respect of an “existing” tenant.
  • The Court noted that the bar on service of a Section 21 Notice was collateral to the primary sanction for non-compliance with the Regulations, which is potentially a criminal offence. 
  • The right to have sight of the GSC only arises once the person who is due to take up occupation becomes “the tenant”.
  • The technical wording of the provisions were interpreted to mean that a landlord may be able to do something to correct a breach of the Regulations in order to serve a Section 21 Notice.

Practical implications

  • Given the potential criminal sanctions of failing to comply with the Regulations, landlords should continue to comply with their statutory obligations to carry out gas safety checks and provide GSC’s to tenants.
  • However, where the GSC is served after the tenant has moved into the property, a landlord may serve a valid Section 21 Notice, provided the GSC is served before the Section 21 Notice.
  • If there has been a delay in the landlord carrying out GSC’s for existing tenants every 12 months, the landlord may serve a valid Section 21 Notice provided the GSC is served before the Section 21 Notice.

Please do not hesitate to contact Georgina Redsell or any member of the Real Estate Disputes team if you have any queries.  This insight is not a substitute for legal advice on the specific circumstances of the case.

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