Many of you will be aware of the Caridon Property Ltd v Monty Shooltz case. In short, the landlord, Caridon Property, failed to obtain a possession order based on their Section 21 notice, because His Honour Judge Jan Luba QC ruled that that the requirements of the Deregulation Act 2015 meant their failure to issue a gas safety certificate before the tenancy began invalidated the subsequent Section 21 notice for repossession.
From our perspective at Caridion Landlord Solutions, we fully recognise the vital importance of ensuring landlords have an up to date Gas Safety Certificate. However, the fact that there is nothing landlords can do to resurrect this issue if they failed to provide a gas safety certificate before the tenancy commenced, even if they provided it since, seems a little austere. In addition, what has not been widely reported in the Monty Shooltz case is that the dwelling itself did not have any gas appliances, these were only in the communal areas therefore we feel the ruling was misplaced and misguided.
Although the case was a County Court ruling, not a Court of Appeal ruling, it was heard before a Circuit Judge. Since the only place that Circuit Judges sit in London is at the Central London Country Court, the London Courts have decided that this ruling is binding in all London Courts, and now appears to have set a precedence for courts nationwide, meaning many more landlords will be trapped by this ruling. The strict judicial interpretation of the legislation, which could prevent thousands of landlords serving a Section 21 notice because of an unwitting administration error, traps them in a position they simply cannot rectify.
We had been liaising with the National Landlords Association (NLA) and Landlord Action who, like us, wanted to call on the Government to reconsider addressing the Monty Shooltz ruling. However, of course the industry recently learnt that Section 21 notices are highly likely to be scrapped altogether in the not too distant future, turning this issue on its head entirely.
We spoke to Barrister Sena Frimpong at Holborn Chambers who agrees that the outcome of this ruling cannot have been Parliament’s intention when the legislation of Gas Safety was brought in. Two interesting points he made were: -
1.Using deposit protection as an analogy, a landlord who has not protected the deposit in an authorised scheme within the relevant time limits is similarly prevented from serving a Section 21 notice. However, this is only UNTIL the tenant’s deposit is returned in full or subject to any deductions agreed with the tenant or the tenant makes an application to the court in respect of the landlord's non-compliance, and the claim is either determined by the court, or withdrawn, or settled out of court between the landlord and tenant. The difference is, there is a route to resolution, so why is the Gas Safety regulation any different?
2.If a landlord cannot serve a Section 21 to a tenant indefinitely owing to the time in which the Gas Safety Certificate was issued, what would happen if the landlord sold the property and transferred ownership to someone else with the tenant in situ? Would the new landlord be bound by his predecessor’s mistake?
While we await the possible abolition of Section 21 and/or subsequent changes to Section 8, we would urge the government to consider this issue as it is grossly unfair that three is no remedy for the breach.