Landlords beware! – The perils of Monty Shooltz
The Deregulation Act 2015 introduced a number of major changes in relation to rented residential properties let out on an assured shorthold tenancy (AST), notably in relation to a landlord’s ability to serve a Section 21 Notice.
For tenancies granted on or since 1st October 2015, certain documents have to be supplied to the tenant at or before the commencement of the tenancy. These are:
- How to rent guide
- Energy performance certificate
- Gas safety certificate (if the property has gas)
A Section 21 Notice may not be served unless and until these documents have been supplied to the tenant. It was understood that failure on the part of the landlord to supply these documents at the outset could be remedied by serving them later.
This point was considered by the court, in relation to a gas safety certificate, in the case of Caridon Property Ltd –v- Monty Shooltz.
The facts in this case were that a gas safety certificate had not been provided to the tenant at the start of the tenancy, before the tenant took up occupation, although one was served shortly before the service of a Section 21 Notice.
The lower court dismissed the possession claim by Caridon on the basis that the prescribed requirements had not been complied with. Caridon appealed. However, the higher court also found against the landlord, and dismissed the appeal, concluding that non-service of a gas safety certificate at the start of a tenancy is an irremediable breach.
The decision of the court is a major one (with echoes of the “Superstrike” decision in relation to tenancy deposits a few years back, which caused many problems for landlords) and will be a cause for concern for landlords and their advisers.
The government has so far indicated that it will not step in with a measure to reverse the effect of this decision, as it did in Superstrike. Furthermore, the decision has not been taken to the Court of Appeal so, for the time being at least, landlords are stuck with it.
What the Monty Shooltz decision means for landlords in relation to existing ASTs (granted since 1st October 2015), where the gas certificate was not issued at the outset, is that they may not serve a Section 21 Notice. If they do want the tenant out, they will have to use the alternative eviction procedure under Section 8 Housing Act 1988, if, in fact, any of the recognised grounds for possession are available to them. The concern is that for some landlords Section 8 may not be available, in which case they will, effectively, be saddled with a sitting tenant who they cannot evict.
What this also means is that landlords and agents must ensure that in every case, a tenant is provided with a gas safety certificate in advance of the start of the tenancy, and before the tenant takes up occupation of the property. Furthermore, anyone purchasing a property subject to a tenancy (or tenancies) will need to ascertain when the certificate was supplied.
If you have any questions about eviction notices or need some guidance as to how to set up a tenancy properly, speak to our landlord and tenant dispute specialist, Philip Oke. You can email him on philip.oke@GAsolicitors.com or call 01752 203500.