The passing of the Deregulation Act 2015 imposed a host of new requirements on landlords who let out properties under Assured Shorthold Tenancy agreements. A number of those, known as “Prescribed Requirements” arise pursuant to the “Assured Shorthold Tenancy and Prescribed Requirements (England) Regulations 2015” (“the Regulations”) and relate to the condition of the property, the health and safety of its occupants and its energy performance. Under these new “Prescribed Requirements”, landlords are obliged to provide certain documents to tenants, including the most up to date version of the Government’s “How to Rent” guide, an Energy Performance Certificate and a Gas Safety Certificate.
It is important to note that, despite a degree of unintended statutory overlap, compliance with the Prescribed Requirements applies only to those tenancies which were granted on or after 1 October 2015.
Pertinently, the Deregulation Act also inserted the new s.21A into the Housing Act 1988. This new provision holds that a landlord in England is forbidden from serving a s.21 notice to recover a property at the expiry of the fixed term of a tenancy agreement when he is in breach of a Prescribed Requirement. This effectively means that a landlord could not serve a s.21 notice in circumstances where any of the documents specified above had not been served, thereby rendering a landlord incapable of recovering possession of its property.
In the case of a Gas Safety Certificate, the Prescribed Requirement is to provide a copy of the Certificate within 28 days of the date of the most recent gas safety inspection in the case of existing tenancies, or, in the case of new tenancies, before the tenant occupies.
Regulation 2(2) of the Regulations provides a saving provision in respect of existing tenancies and holds that even if a Gas Safety Certificate was not served within the required 28 period, service of the Certificate at any point thereafter can remedy the breach and permit the landlord to serve a valid s.21 notice (subject to compliance with all other statutory requirements). The presumption amongst landlords and legal practitioners was that the same saving provision would apply to new tenancies (eg, those entered into on or after 1 October 2015).
However, the decision in the recent case of Caridon Property Ltd v Monty Shooltz has rebutted that presumption. In this case HHJ Luba QC (who is considered an authority on Housing Law) held that for new tenancies entered into after 1 October 2015, the failure to serve a Gas Safety Certificate before the tenant occupied the property in question was a fatal flaw which was incapable of remedy; meaning that, in those circumstances, a s.21 notice could never be served.
The consequences of such a decision are obvious: unless a tenant’s conduct gave rise to one of the statutory grounds of eviction (such as rent arrears or other breaches of the tenancy) or chose to leave themselves, a landlord can find themselves in a position where they can never re-gain possession of their property, for a theoretically unlimited period, owing to one administrative failure which occurred prior to the commencement of the tenancy.
It must be noted that this was only an appeal to a Circuit Judge, heard in the County Court and so could be overturned upon appeal or by a dissenting decision of a superior court. Therefore, it is questionable how long the decision will remain as “good law.” However, at the time of writing, the decision remains valid and serves as a cautionary tale for landlords to ensure that they are aware of their statutory obligations and that all Prescribed Requirements are complied with prior to the commencement of individual tenancy agreements.
DKLM are able to provide advice with regard to the formalities required when entering into Assured Shorthold Tenancy agreements.