Gas Safety Certificates and Section 21- A form of Resolution

18th June 2020 Commercial Litigation

The Court of Appeal has handed down its judgment on the important possession case of Trecarrel House Ltd v Rouncefield. This case concerned the serving of a section 21 notice under the Housing Act 1988 where a landlord’s gas safety certificate (GSC) had not been given prior to the start of the tenancy.

Legislative Background

There has long been a requirement on landlords to have a GSC for residential rented property. There are in fact two linked requirements:

  1. The landlord must provide the tenant with a copy of the GSC before they occupy the property;
  2. The landlord must update the GSC each year and provide the tenant with a copy of the updated certificate within 28 days of it being done.

As part of the changes to the s21 regime caused by the Deregulation Act 2015 the government imposed new restrictions on s21 notices and their service. One of these was to comply with certain “prescribed requirements” which were set out in regulations. Those regulations specified compliance with the GSC rules as being a prescribed requirement. The regulations disapply the 28 day time limit on part 2 of the obligations so it appears to be possible to provide the updated GSC after a re-check late and still serve an s21 but nothing is said about the time for compliance for obligation 1 so this appears to stand in full.

The Issue

These changes have created a bit of a problem. The requirement on provision of a GSC is that it must be given before the tenant occupies the property. This is not an event that can be replayed or worked around. So if the landlord gives the GSC after the tenant has moved in, even if they had it beforehand and the installation was actually safe, then it appears they cannot serve an s21 notice. This appeared to be an issue which was not resolvable by serving the s21 later and si imposed a huge penalty on landlords by converting their tenancies to ones which were, in effect, fully assured as the tenant could remain there, in principle, for life.

It has been argued that this is just deserts. GSCs are important and landlords should not be casual about them. However, it seems a little harsh for landlords whose agent has been incompetent or who have inherited or acquired a property with tenants in place who might not have been given a GSC at the right time.

However, a number of County Courts had held that this was the position and so the only option was to take a case to the Court of Appeal. When I was working as the Policy Director of the RLA (as it then was) we made a decision to find such a case and support it to an appeal. That case was Trecarrel v Rouncefield, which had emerged from Truro County Court. Here the tenant contended that no GSC had been given to her before she moved in. The landlord accepted this but argued that a notice had been given before an s21 notice was given. However, the Court followed other county court decisions and said that this was insufficient.

Court of Appeal

The Court of Appeal (CoA) was concerned by the apparent disparity in treatment between new and existing tenants. Where a tenant is already in the property then giving an updated GSC late, even very late, will allow service of the s21 notice. However, any lateness at all in providing a GSC to a new tenant, even just one day, will prevent service of a s21 notice. There are also other penalties for the failure to comply properly with the GSC requirements, most notably the possibility of imprisonment. The COA felt that the additional block on s21 was therefore intended more to encourage compliance rather than being a strict obligation which should be enforced aggressively. Therefore the CoA concluded that the regulations requiring a GSC to be served before a s21 can be served, in disapplying the 28 day time limit for repeat GSCs must also be read as disapplying the time requirement on an original GSC meaning it does not have to be given before the tenant occupies the property.

What this Means

This is all quite a painful reading of the regulations. So painful in fact that one of the three judges refused to accept it and held that the restrictions should apply in full effect. However, the majority decision applies and so landlords can serve a s21 notice even if the GSC was given to the tenant after they moved in.

However, this is not a total “get out of jail free” card. As has already been pointed out, in this case the GSC existed before the start of the tenancy. It is just that it was not supplied at the right time. So a landlord who had no GSC when a tenant moved in is not likely to be able to rely on this decision and is still unlikely to be able to serve a s21 notice.

Additional Points

Some additional points were raised by the tenant and were ruled on as well and they are worth noting. One of the landlord’s GSCs actually had an error on it in that it gave the wrong date for the date that the safety check had been carried out. The CoA ruled that this made the certificate invalid. So it is really important when getting a GSC done to check it carefully and ensure that it is entirely accurate. Secondly, there had been a gap between subsequent GSCs so that one of them had been carried out more than 12 months from a previous check. The CoA ruled that this did not matter as long as there was compliance at the time the s21 notice was served. So being late on a re-check is not necessarily fatal to a landlord’s chances of using a s21 notice.

Conclusion

This has been a long and tortured process. The MHCLG has been particularly feeble in terms of resolving this as the issue was pointed out to them very early on and they could have altered the regulations to limit the damage done. Many landlords and tenants will have wasted time, money, and energy arguing about this issue in lower courts. In addition, both landlords and tenants will have found themselves living in uncertainty over their exact positions. While this decision will eventually be academic once s21 is finally removed that it not likely to be for some time and so it will remain important. But it is also an object lesson in the damage that legislators can do when they act, albeit with good intentions, without properly understanding the legislation they are altering.

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David Smith is a Partner located in Londonin our Commercial Litigation department

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