Comment

Court of Appeal rules on law on gas safety certificates and section 21 notices

Wednesday, July 8, 2020 - By Sarah Cummins, Solicitor at Anthony Gold

Sarah Cummins, Solicitor at Anthony Gold Solicitors

On 18 June the Court of Appeal delivered its judgement in the eagerly anticipated case of Trecarrell House Limited v Rouncefield (2020) EWCA Civ 760. In a split decision, the Court confirmed that where a landlord has given the tenant a gas safety record (“GSR”) late, the s.21 notice will not be invalidated, provided the relevant GSR has been given before service of the s.21 notice. While a good outcome for landlords, the Court’s judgment shows that this was not an easy case to resolve and there are still difficult questions to be answered.

The Facts

The landlord, Trecarrell House Limited (“THL”), granted the tenant, Patricia Rouncefield, an assured shorthold tenancy in February 2017. THL completed a gas safety check in January 2017 but the GSR was not provided to Ms Rouncefield until November 2017 after she had moved in. A subsequent gas safety check was carried out in February 2018 and a s.21 notice served in May 2018. There was a dispute over whether the February GSR was provided to Ms Rouncefield before service of the s.21 notice (and that issue has been remitted to the county court for determination).

THL commenced a possession claim in Truro County Court. This was defended by Ms Rouncefield on the basis that the landlord had failed to provide her with a copy of the GSR prior to her occupation of the property. The District Judge held that late compliance would not invalidate the s.21 notice and made a possession order. Ms Rouncefield appealed and the case came before Circuit Judge, HHJ Carr, who overturned THL’s possession order. In his judgment, HHJ Carr adopted the reasoning in the earlier county court appeal case of Caridon Property v Monty Schooltz where HHJ Luba QC had concluded that a failure to provide the tenant with the GSR before occupation was a breach that could not be remedied late and resulted in a landlord being permanently excluded from relying on the s.21 procedure.

THL applied for and was granted permission to appeal to the Court of Appeal.

The Law

Before examining the issues the Court of Appeal had to determine, it is necessary to rewind and look at the complex legislative framework behind the appeal.

The Deregulation Act 2015 came into force on 1 October 2015 and made significant changes to the s.21 procedure. It amended the Housing Act 1988 including introducing a new section 21A which prevents the service of a s.21 notice in England “at a time when the landlord is in breach of a prescribed requirement.” The prescribed requirements are contained in subordinate legislation: The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (“the 2015 Regulations”) and refer to the landlord’s duty to provide the tenant with an energy performance certificate and gas safety certificate.

The requirements were prescribed by referring to duties already imposed on landlords by existing legislation. For gas safety it is the duty on the landlord to provide the tenant with a GSR under paragraph 6 or paragraph 7 of regulation 36 of the Gas Safety (Installation and Use) Regulations 1998 (“The Gas Safety Regulations”). However, for section 21 purposes this requirement is qualified by an express provision in the 2015 Regulations that states that for the purposes of s.21A of the Housing Act 1988, the requirement is “limited to the requirement on a landlord to give a copy of the relevant record to the tenant and the 28 day period for compliance with that requirement does not apply.” This qualification was of central importance to the Court of Appeal’s decision for the reasons we shall see below.

Regulation 36(6) of Gas Safety Regulations contains two distinct obligations on landlords:

1) to give a copy of the GSR to each existing tenant within 28 days of the check (Regulation 36(6)(a)); and

2) to give a copy of the last GSR made in respect of each appliance or flue to any new tenant of the property to which the record relates before that tenant occupies the premises (Regulation 36(6)(b)).

Regulation 36(7) sets out when the landlord can comply with the above duties by displaying the GSR in a prominent position in the premises instead of giving it to the tenant. This applies in circumstances where there is no relevant gas appliance in the room occupied or to be occupied by the tenant, for example where a tenant’s flat is served by a gas boiler situated outside the flat.

Issues

By the time of the hearing, the Court of Appeal was being asked to determine two key issues.

1. Does a failure to provide the tenant with the GSR before occupation prevent the landlord from serving a valid section 21 notice?

2. Is a section 21 notice invalid if the GSR is based on a late safety check?

The second issue was a new argument raised by Ms Rouncefield during the course of the appeal.

Before Occupation

Starting with the first issue of whether a landlord can remedy a failure to provide the tenant with a GSR before occupation. All three judges agreed that the duty to give a new tenant a copy of the last GSR i.e. the obligation at Regulation 36(6)(b) above did form part of the prescribed legal requirements. However, the majority of the Court took the view that the time limit set out in the Gas Safety Regulations: to provide the GSR before occupation, did not apply for s.21 purposes. This means it is possible to remedy a failure to provide the tenant with a GSR before occupation by providing the GSR late, so long as it is given before service of the s.21 notice.

Patten LJ in his lead judgment undertook a detailed analysis of the above legislation. However, the basis of his and King LJ’s decision was the interpretation of the 2015 Regulations, specifically Regulation 2(2), the provision that sets out the disapplication of the 28-day time period. It was clear that the 28-day period for compliance was disapplied in respect of existing tenants and Patten LJ and King LJ could not see why Parliament would have intended a more draconian sanction in respect of landlords’ duties towards new tenants. “Such a disparity of outcome” King LJ stated “does not seem to me to fit with the legislative scheme as a whole”. Patten LJ noted that while one explanation for this difference in treatment might be that a new tenant should have sight of the GSR prior to making a decision about whether or not to enter into the tenancy, the duty to provide a GSR is only triggered once that person becomes a tenant and not before. This therefore could not explain why new tenants should be entitled to greater protection.

Both Patten LJ and King LJ referred to other factors in support of their interpretation including:

  • That the restrictions on serving a s.21 notice are not the primary sanction for breach of landlords’ gas safety responsibilities. Non-compliance is punishable as a criminal offence. In Patten LJ’s opinion “The imposition by s.21A of a bar to the service of a s.21 notice is therefore only collateral to these sanctions and, at best, a spur to compliance.
  • The other pre-conditions for serving a s.21 notice can be remedied by the landlord prior to service of the notice. For example, breaches of the tenancy deposit legislation can be remedied by returning the deposit.
  • While the wording “at a time” in s.21A Housing Act 1988 was not itself sufficient to mean that the breach was automatically capable of remedy, it did suggest that it was envisaged that the landlord could do something to remedy the breach.

Moylen LJ provided a dissenting opinion. In his view, only the time limit in respect of existing tenants was removed because of the express disapplication of the 28-day period for compliance. The disparity of outcome as between new and existing tenants that would result was, in his opinion, the effect of a plain reading of the legislation.

Late Safety Checks

This was a second argument raised in the tenant’s Respondent’s Notice in respect of the subsequent gas safety check. It was argued that as the second check was carried out more than 12 months after the previous check, the s.21 notice was invalid because the GSR was not a copy of the record made pursuant to the requirements of the Gas Safety Regulations. This was an argument that had been successfully raised by a tenant in a different case in the county court.

Patten LJ was quicker to dismiss this argument confirming that the duty in the Gas Safety Regulations to carry out an annual gas safety check was not itself a prescribed requirement for serving a s.21 notice (even though it could be a breach of the Gas Safety Regulations exposing the landlord to criminal penalties). Therefore, in respect of existing tenants, the landlord can comply by giving the tenant a GSR which contains all the required information, even if the check is carried out late, provided that the GSR is given before the service of the s.21 notice. This decision will be a welcome relief to landlords who may have struggled to access their properties to carry out checks on time during the current pandemic.

Where does Trecarrell leave landlords now?

The Court of Appeal’s decision will be welcomed by the many responsible landlords who carry out gas safety checks but have been fearful that administrative oversights and errors in providing the GSR to tenants could leave them permanently barred from using the s.21 procedure. The Court of Appeal has rejected the strict interpretation of the law applied in Caridon v Monty Schooltz, which saw landlords barred from serving a s.21 notice even in circumstances where the GSR was provided a day late. Landlords in this position will be comforted by the decision and the binding precedent it creates.

The Court’s decision, however, is not a cure for all the difficult issues that have emerged since the law was changed in 2015. The decision leaves a number of questions unanswered most notably what if a landlord did not carry out a gas safety check at all before the tenant went into occupation. Can this be remedied late, and, if so, how? This issue wasn’t dealt with in the appeal because the landlord had carried out a check before the tenant went into occupation.

Also, what if the tenant has occupied the property for several years and the landlord carried out a check before occupation but no longer has a copy of the GSR and/or evidence to show that the original GSR was given to the tenant. This could be a problem for many compliant landlords as the Gas Safety Regulations only require records to be retained for a period of 2 years.

The Court of Appeal did not go so far in its decision to say that all historic gas safety breaches can be remedied so long as the tenant has been given the current GSR before service of the s.21 notice. That means there may well still be situations where a landlord’s failure to comply with their gas safety obligations results in them being permanently barred from using the s.21 procedure. Given the difficult questions left unanswered it seems inevitable that the senior courts will be asked to look at the legislation again in future cases. Furthermore the Court of Appeal’s decision may not be the end of the matter for THL and Ms Rouncefield as the tenant’s legal team has announced they are seeking permission to appeal to the Supreme Court.

Overall, the Court of Appeal’s decision is good news for landlords but it would be unwise to view the decision as an easing of the rules. While the judgment may represent a relaxation in how the law has previously been interpreted, it highlights the importance of landlords taking their gas safety obligations seriously and ensuring checks are carried out, GSRs are given to tenants and records are kept. The s.21 procedure has proven to be a popular and effective way of enforcing legal obligations and landlords who wish to make use of it should not underestimate the importance of both complying with their legal duties and retaining paperwork to demonstrate their compliance.

The author of this blog, Sarah Cummins, is a Solicitor in the Housing Team at Anthony Gold. Her email address is scm@anthonygold.co.uk.

Please note that the views and opinions expressed in these blogs are those of the author and do not necessarily represent the views of London Property Licensing. These blogs are designed to stimulate discussion and debate within the property industry. This article does not represent legal advice and should not be treated as such.

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