Section 21 Notices through the looking glass Caridon Property Ltd v Shooltz [2018]

Residential landlords are still reeling from the decision of His Honour Judge Luba QC in Caridon Property Ltd v Shooltz [2018]. In case any residential lettings professional has missed this (which is unlikely) it has been held that unless a valid current gas certificate is served on a prospective Tenant before he takes occupation of any premises the tenancy cannot be brought to an end and he can never be removed so long as he complies with the other obligations under the tenancy. In effect an Assured Shorthold Tenancy becomes an Assured Tenancy.

I’ve heard it said that it is right and proper that Landlords who fail to provide accommodation that complies with the gas safety regulations should be effectively punished in this way. This misses the point that even where the subject accommodation is covered by a valid gas certificate at all times before and during the tenancy nevertheless as a result of an administrative slip where a Tenant takes occupation before he is given the current existing gas certificate instead of being given the gas certificate before he takes occupation then the Landlord loses the right to terminate the tenancy with a Section 21 Notice forever.

His Honour Judge Luba QC concluded that this was Parliament’s fault for their poor drafting of the legislation and that this was the inevitable consequence and the only interpretation of the relevant legislation available to the court.

I respectfully disagree. This is not what was intended by Parliament and furthermore this is not what the legislation says. As a decision by a circuit Judge in London this finding is only binding on the London County Courts but as His Honour Judge Luba QC is also a respected housing lawyer and co-author of “Defending Possession Proceedings” it will carry weight outside London too.

Although this ruling does not contradict his own published work, it does contradict Parliament’s clearly stated intention. When Section 21A of the 1988 Act, was inserted by the Deregulation Act 2015, this was introduced as a House of Lords amendment with an accompanying explanatory note stating that: “This clause would provide the Secretary of State with the power to prescribe legal requirements imposed on Landlords by any enactment, so that if a Landlord fails to comply with those requirements, the Landlord should be prevented from giving a Section 21 notice, until the Landlord has complied with the relevant legal obligation.” There is no suggestion that any failure to comply was to be irredeemable.

I appreciate that the relevant legislation is hard to follow. The Deregulation Act 2015 amended the Housing Act 1988 to introduce Section 21A which imposed preconditions on the validity of Section 21 Notices that were set out in The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (“the Prescribed Requirements”) which in turn refer to The Gas Safety (Installation and Use) Regulations 1998 (“the Gas Regs”).

However to explain my conclusions I need only take you to Regulations 2(1)(b) and 2(2) of the Prescribed Requirements and Regulation 36(6) of the Gas Regs.

Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015

2.
  • (1) Subject to paragraph (2), the requirements prescribed for the purposes of section 21A of the Act are the requirements contained in—
    (b) paragraph (6) or (as the case may be) paragraph (7) of regulation 36 of the Gas Safety (Installation and Use) Regulations 1998 (requirement to provide Tenant with a gas safety certificate).
  • (2) For the purposes of section 21A of the Act, the requirement prescribed by paragraph (1)(b) is limited to the requirement on a Landlord to give a copy of the relevant record to the Tenant and the 28 day period for compliance with that requirement does not apply

Regulation 2(1)(b) is quite clear. In order for a Section 21 Notice to be valid the Landlord must have complied with Regulation 36(6) of the Gas Regs (for this analysis we can ignore 36(7) that deals with lodgers and HMOs). So what does Regulation 36(6) require the Landlord to do?

The Gas Safety (Installation and Use) Regulations 1998

36
  • (6) Notwithstanding paragraph (5) above, every Landlord shall ensure that—
    (a) a copy of the record made pursuant to the requirements of paragraph (3)(c) above is given to each existing Tenant of premises to which the record relates within 28 days of the date of the check; and
  • (b) a copy of the last record made in respect of each appliance or flue is given to any new Tenant of premises to which the record relates before that Tenant occupies those premises…

Regulation 36(6)(a) is also straightforward. In order to avoid falling foul of the consequences of the prescribed requirements rendering a Section 21 invalid, a Landlord must provide each existing Tenant with a copy of a new gas certificate within 28 days of the date of the inspection. However Regulation 2(2) of the Prescribed Requirements limits the obligations under the Gas Regs as they apply to the validity of Section 21 Notices and so the need to provide the gas certificate within 28 days does not apply. If a Landlord fails to provide an existing Tenant with a copy of a new gas certificate within 28 days he will still be liable for breach of the Gas Regs but any Section 21 Notice will not be invalidated.

Similarly, as for new Tenants, Regulation 36(6)(b) requires a copy of the current gas certificate is to be given to any new Tenant before that Tenant occupies those premises but this is also limited by virtue of Regulation 2(2) of the Prescribed Requirements for the purposes of the validity of a Section 21 Notice to the bare requirement on a Landlord to give a copy of the relevant record to the Tenant. To me the consequence of this is clear. The effect of Reg 2(2) of the Prescribed Requirements is to limit Gas Reg 36(6)(b) so that a failure to give a new Tenant a copy of a gas certificate before that Tenant occupies those premises does NOT invalidate a Section 21 Notice.

A Landlord will be in breach of the Gas Regs if he doesn’t obtain a gas certificate annually and provide it to his Tenants within 28 days or if he fails to give a copy of a current gas certificate to a new Tenant before he occupies. I’m not aware of any Landlord being prosecuted for not giving a copy of a current gas certificate to a new Tenant before he occupies.

As for the validity of a Section 21 Notice then so long as the premises have always been covered by a gas certificate and the Tenant has been given a copy of a valid gas certificate prior to the service of a Section 21 Notice then the Section 21 Notice is valid.

I would argue that my interpretation is in line with the guidance produced by government, provides the Tenants with the safe conditions they are entitled to and the security to the Landlord (and any mortgage lender) that possession can be recovered.

The current situation is totally iniquitous but in order to change this there will either have to be new Regulations produced or a successful appeal on this point to the Court of Appeal. As the Government is pre-occupied at the moment so we must look to an appeal.

There will certainly be instances out there where Landlords who have fully complied with the Gas Regs at all times (and all the other regs for that matter) but nevertheless trapped under the Caridon ruling and looking for a way out.

I suggest we identify such a case and I volunteer to act for a worthy claimant and if necessary I’m sure we can arrange crowd funding and locate a suitably high-powered specialist barrister who is willing to go into battle to rectify the legal position.

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