With the plethora of restrictions on remedies against defaulting tenants introduced in the wake of the pandemic, it is fair to say that residential landlords are not having a good year. However, there is a crumb of comfort.
The Court of Appeal has overturned a county court ruling to find — with a 2-1 majority — that a landlord who obtained a Gas Safety Record (“GSR”) before the tenancy began, but failed to give it to the tenant before they took up occupation, can still serve a section 21 notice, as long as they served it on the tenant before serving the notice.
This now settles the law, barring an appeal by the tenant to the Supreme Court.
The case arose out of the toughening of rules in 2015 requiring landlords to meet certain “prescribed requirements” before they could serve section 21 notices.
Some of these requirements related to service of GSRs and were imported from the Gas Safety (Installation and Use) Regulations 1998 (“1998 Regulations”).
However, instead of being copied and pasted into the 2015 regulations, they were modified; a recipe for confusion.
The relevant part of the 1998 Regulations requires a landlord to:
Give a copy of the GSR to each existing tenant within 28 days of the check; and
Give a copy of the last GSR to any new tenant before that tenant takes up occupation.
The 2015 regulations expressly relieve landlords of the obligation to give existing tenants a copy of the GSR within 28 days of the check. But there is no equivalent relief in relation to the provision of GSRs to new tenants before they take up occupation.
That led the county court to order that a landlord who did not give a new tenant a GSR before that tenant took up occupation to be forever barred from serving a section 21 notice. However, the Court of Appeal did not agree.
The court’s decision may have been driven by policy implications. Although it was obvious why Parliament would want to ensure tenants knew their premises were safe, it was not clear why that principle should not be applied only to new tenants and not to existing tenants as well.
In any case, the breach of the 1998 Regulations is a criminal offence. A prohibition on a landlord who may have committed an offence from serving a section 21 notice was “only collateral to [the criminal sanctions],” and (presumably) less likely to be what Parliament intended”.
Possibly more significant is the fact that preventing a landlord from serving a section 21 notice effectively converts the tenancy into an assured tenancy.
Why should this “prescribed requirement” be the only one to have such a drastic consequence if breached?
Inevitably, there are still unanswered questions. Can a landlord who has failed to obtain a GSR before the tenancy begins subsequently obtain it, and then serve a section 21 notice? Doubtless we need to wait for another case to clarify the point.
The wider implications of this judgement are hard to discern. Aside from the suspension of possession proceedings during the pandemic, the government has proposed a Renters’ Reform Bill, which would have abolish section 21 notices altogether.
Nonetheless, it seems likely that the section 21 regime will stay with us for a little while longer. Despite the welcome news this ruling offers for landlords, common sense and good practice still demand that a landlord should be able prove he gave a new tenant a GSR before that tenant took up occupation.
Scott Goldstein is a partner at Payne Hicks Beach