A very recent decision of the Central London County Court is set to have serious implications for lettings agents and landlords with premises let under Assured Shorthold Tenancy (‘AST’).

The Deregulation Act 2015

We are all now too familiar with the requirements introduced by the Deregulation Act 2015, restricting a landlord’s ability to serve a Section 21 Notice until it has complied with certain prescribed requirements. Such requirements include the provision to the tenant of an EPC for the property, the Government’s ‘How to Rent’ booklet and the gas safety certificate for the property. 

These requirements have applied to all new ASTs granted after 1 October 2015 and will apply to all ASTs from 1 October 2018.

The Gas Safety Regulations 1998

The Regulations made under the Deregulation Act 2015 make it clear that the usual 28 day time frame imposed on landlords under regulation 36(6)(a) of the Gas Safety Regulations 1998 for the provision of the gas safety certificate to the tenant following a gas safety check is to be ignored for the purposes of compliance with the Deregulation Act 2015 requirements.

A landlord therefore complies with the Deregulation Act 2015 requirements by providing the gas safety certificate obtained following a gas safety check  at any time before a Section 21 Notice is served, even if not within the 28 days provided for under the Gas Safety Regulations 1998.

The Gas Safety Regulations 1998 also impose a duty on landlords to provide the latest gas safety certificate to a new tenant prior to the tenant taking up occupation of the premises under regulation 36(6)(b).

In somewhat of an anomaly, the Deregulation Act 2015 makes no provision excusing late compliance with regulation 36(6)(b) for the purposes of serving a Section 21 Notice, and this is the issue very recently considered by the Court this month in Caridon Property Ltd v Monty Shooltz.

The decision

In Caridon Property Ltd v Monty Shooltz, the Court held on appeal that Regulation 36(6)(b) of the Gas Safety Regulations had to be complied with at the commencement of the tenancy and the landlord’s failure to provide the latest gas safety certificate prior to the tenant taking up occupation of the premises was fatal to its claim for possession on the Section 21 Notice. Accordingly, the claim for possession failed.

The Court gave a purposive reading of the Deregulation Act 2015, insofar as it aims to restrict a landlord’s ability to give notice under Section 21 to circumstances in which assurance has been given to the occupier that the premises are safe. The Judge went on to say that any other interpretation of the Regulations would leave it open to the landlord to give a Section 21 Notice even where it has let what at the time may have been dangerous and unchecked premises that may have fallen foul of the Gas Safety Regulations 1998.

Implications

Whilst the decision is only a County Court appeal meaning that other Courts are not necessarily bound to agree and follow it, there is a real risk that other Courts will give a similar interpretation to the Regulations.

It is therefore absolutely imperative that the latest gas safety certificate is provided prior to the tenant taking up occupation of premises, as well as later certificates following a gas safety check, failing which a landlord is likely to find will be unable to serve and seek possession based on a Section 21 Notice.

It is clear that the effect of the decision will have wide reaching implications and seriously inhibits a landlord’s rights to seek possession; the result of which is to create an assured tenancy with greater security of tenure through the backdoor.

In our view, this cannot possibly be what the Deregulation Act 2015 intended, which, after all, sought to limit regulation and cut red tape. It seems an utter nonsense that the 28 day time limit for the provision of the gas safety certificate following a gas safety check should be ignored for the purposes of compliance with the Deregulation Act 2015, but such a strict approach should be taken with the time limits for initial compliance prior to the tenant taking up occupation.

There is rumour that the landlord will be appealing the decision to a higher Court and in any case amendments to the Regulations are clearly in order to bring about certainty and clarity on the issue.

In the meantime, you should be aware of the strict interpretation the Court has taken with the Deregulation Act 2015 requirements and ensure that you have full and accurate records of your compliance with the same.

If you or  your clients have any queries regarding this note, please do get in touch.

For more information, please contact Kevin Lever at Kevin.Lever@kdllaw.com or on 01435 897297.

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