Residential possession claims – a cautionary tale

16 Nov 2018

The Dispute Resolution Briefing is made up of different articles on the challenges when facing certain disputes in everyday life. Here, Linden Talbot describes a landlord and tenant scenario.

Landlords who are familiar with recovering possession of their properties will be aware that the most common, and certain, route to follow is by serving a notice pursuant to section 21 of the Housing Act 1988. Broadly speaking, this process allows a landlord to recover possession of their property from a tenant, upon giving the tenant no less than two months’ notice, without needing to give a reason and without needing to prove an element of tenant default. If the notice expires and the tenant is still in possession, the landlord can apply to the courts for a possession order.

The section 21 procedure is the source of continued debate. Landlords often view the procedure for evicting a tenant, particularly if the courts are involved, as unnecessarily complicated and costly. Others take the view that the protection given to tenants is not enough or even that the procedure should be abolished entirely.

There are no plans to abolish the procedure entirely but the regulations governing it have changed in recent years, most notably as a consequence of the Deregulation Act 2015 coming into effect from 1st October 2015. The last three years have been a transitional period, allowing landlords and tenants to become familiar with the new regulations. However, the transitional period ends shortly.

 

Current position

The main change that most landlords will be aware of affects any assured shorthold tenancy (“AST”) which started on or after 1st October 2015. This is likely to be most, but not all, ASTs. The changes mean that for an AST that started after 1st October 2015, a landlord has an obligation to provide the following documentation to a tenant:

1 If a deposit has been taken it must have been protected in compliance with the Tenancy Deposit Scheme and details of that scheme and other “prescribed information” must be provided within 30 days of receipt;

2 An Energy Performance Certificate and a Gas Safety Certificate must be provided to the tenant before the tenancy starts; and

3 A “How to Rent” must have been provided to the tenant.

If a landlord wants to recover possession through the section 21 procedure, then notice can only be served if the landlord has complied with these requirements.

Furthermore, a notice cannot be served in retaliation, for example because the tenant has raised a legitimate complaint about repairs to their home.

It must also be noted that notice cannot be given within the first four months of the beginning of the AST. That notice must be in a prescribed format, known as Form 6A.

For ASTs which began before 1st October 2015, the old rules apply until 30th September 2018. That is, a landlord only needs to give at least two months’ notice of a specified date for possession, which cannot be earlier than the date on which the fixed term is due to expire. That notice does not need to be in any particular format. Provided that the landlord has protected the deposit, no further regulations or restrictions apply.

From 1st October 2018

Almost every AST that exists on or after 1 October 2018, irrespective of when it was entered into, will be governed by the above regulations. This will mean that Form 6A will be the only form of notice which is acceptable.

 

What are the consequences of failing to comply with the regulations?

In short, a landlord who fails to comply with the above regulations cannot serve a valid section 21 notice until the conditions have been met. This could mean that a landlord, who is not aware of the regulations, gets all the way to court only to have the case thrown out because of a failure to comply.

In some cases, if there is non-compliance, the breach may be capable of being remedied. For example, a landlord who fails to protect a tenant’s deposit can either return it to the tenant or protect it. Provided that one of these is done before the section 21 notice has been served then it will be valid, although the landlord may face a claim for compensation arising from the failure.
However, what happens if the landlord does not provide, say, a Gas Safety Certificate before the AST starts?

This happened in a case which was heard earlier this year (Caridon Property Ltd v Monty Shooltz). The landlord had not provided a Gas Safety Certificate to its tenant until some 11 months after the AST began. The landlord then served a section 21 notice and started court proceedings for a possession order. The judge at first instance dismissed the landlord’s claim on the basis that, on a strict interpretation of the regulations, the requirement to serve a Gas Safety Certificate before the AST began had not been met. The landlord appealed and the case came before HHJ Luba QC, widely regarded as a pre-eminent housing law specialist. HHJ Luba QC dismissed the appeal, finding:

“Once opportunity [to serve the certificate] has been missed, there is in my judgment no sense in which it can be rectified.”

It is understood that the landlord has since withdrawn its case so it will not be the subject of a further appeal. Whilst this decision is not generally binding, district judges in the county courts, many of whom hear possession cases on a weekly basis, will find it hard to dissent from HHJ Luba’s decision. The position is likely to remain like this until such time as Parliament legislates or a higher court determines otherwise and creates a binding precedent.

Therefore, as things stand currently, a landlord may well find it impossible to recover possession through the section 21 route if a Gas Safety Certificate has not been provided before an AST begins.

 

Closing comments

Landlords may well feel that the ever changing regulations are designed to catch them out. Conversely, tenants are likely to view the changes over recent years as positive and aimed at protecting their rights. Either way, I cannot overstate the importance for landlords and agents of keeping up to date with the changes and getting good advice from the outset. In particular:

1 Ensure that the relevant certificates are provided to the tenant before the AST starts. Ideally, obtain a signed receipt.

2 Ensure that any deposit taken is protected on time and the prescribed information sent to the tenant.

3 Ensure that the “How to Rent” guide is provided to the tenant.

4 Make sure that you serve the appropriate section 21 notice at the appropriate time.

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Author

Linden Talbot

Associate

Commercial Litigation

Email me

01202 338565