Court case shows agents must be scrupulous in issuing...

The Association of Residential Letting Agents is reminding its members - and all letting agents - of the need to be scrupulous in the issuing of the correct documents to tenants.

This follows a recent county court decision relating to Section 21.

“The decision serves to remind agents of the importance of serving tenants with deposit registration details, an EPC certificate, the latest version of the MHCLG How to Rent guide, any relevant licences and a gas safety certificate where appropriate, prior to occupation” says a statement from the association.

Dutton Gregory, the landlord and tenant legal specialists and ARLA Legal Helpline provider, has also provided guidance via a letter to the association’s chief executive David Cox.

It specifically concerns gas safety notices but highlights the wider issue, and reads:

The Deregulation Act 2015 brought in a whole new raft of legislation government when we can or cannot serve a Section 21 notice and the documents that must precede it.

Since 1 October 2015 we have all got used to the idea that quite apart from sending a tenant paperwork proving compliance with the deposit registration regulations, we now have to make sure that tenants have received the appropriate energy performance certificate, the government’s ‘How To Rent’ guide plus the gas safety certificate where a property has any gas appliances.

Before last month it was common practice simply to re-serve each of these documents immediately before, or indeed the same time as, giving a tenant the usual two month notice required by Section 21. Many agents have done this, even where the documentation might have been given to a tenant at the very start of the initial tenancy.

However this practice might have to be reviewed in light of the decision of His Honour Judge Luba QC in the case of Caridon Property Ltd v Monty Shooltz heard in the County Court at Central London this February.

The Judge has pointed out that the necessary regulations that followed the implementation of the Deregulation Act 2015 stipulate that one can only serve a Section 21 notice if the landlord or his agent has fully complied with paragraphs 6 and 7 of regulation 36 of the Gas Safety (installation & Use) Regulations 1998.

These in turn require the gas safety certificate to be served on an existing tenant within 28 days of the check being completed. Of itself this would not be a problem as the 2015 regulations state that the original 28 day compliance period need not apply.

However, the 1998 rules also state quite clearly that a gas safety certificate must be given to “any new tenant of premises ..... before that tenant occupies those premises.”

Here His Honour was adamant. Whichever way one reads the 2015 regulation, if you did not give your tenant the relevant piece of paper before they actually moved into the property, you were in breach of the 1998 legislation. In the view of at least one judge, there is nothing a landlord or agent can do to rectify that position. If correct this means your Section 21 notice is fatally tainted - indeed, can one ever serve a Section 21 Notice?

By implication Judge Luba criticises the drafting of the 2015 regulations and quoted from his own text book on the matter, a legal tome which is now the bible for those seeking to defend possession proceedings:

‘ .... if the latest gas safety certificate was not given to the tenant before he or she occupied, this is a breach which cannot be rectified ... although this may not have been the legislative intention.’

So where are we now? Decisions of the county court are not binding on other parts of the judicial system. However Judge Luba is a well-respected Judge whose decisions are bound to be heeded at least in the London area if not further afield.

If landlords or their agents have not served the gas safety certificate before a tenant takes up occupation of a property, there may well indeed be fatal consequences but in the meantime the Judge’s learned words are creating considerable uncertainty each time a possession action is considered where it is based on an expired Section 21 notice.

Ironically, if a tenant is on a second or subsequent fixed term tenancy, it may not be so much of an issue provided you can show that before the latest contractual term started, the tenant had indeed received a valid gas safety certificate for the preceding term. Whether His Honour Judge Luba agrees, remains to be seen.

Meanwhile, various trade bodies are making representations to the newly re-named Housing Ministry who are already aware of the problem.

For practitioners it is now more important than ever to have a paper trail and be able to prove that a gas safety certificate was given to a tenant ‘before‘ they take up occupation upon an assured shorthold tenancy.

Yours sincerely, etc