Property Guardianship: New court ruling on repossessions welcomed by landlords and property guardian companies
Landlords and property guardian companies will welcome a recent Court of Appeal decision determining issues surrounding section 21 notices and gas safety certificates.
The Gas Safety (Installation and Use) Regulations 1998 impose various obligations on residential landlords. These include a requirement to:
- carry out an annual gas safety inspection;
- give a tenant a copy of a gas safety certificate within 28 days of any such inspection; and
- give a current certificate to any tenant prior to occupation.
Section 21 of the Housing Act 1988 creates a “no fault / notice only” ground for possession against an assured shorthold tenant. A notice may not be given at a time when a landlord is in breach of a prescribed requirement. A “prescribed requirement” includes regulation 36(6) of the Gas Safety (Installation and Use) Regulations 1998 save that “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.
Trecarrell House Ltd v Rouncefield  EWCA Civ 760: The facts
In February 2017, Ms Rouncefield became the assured shorthold tenant of a flat of which Trecarrell House Ltd was her landlord. The landlord did not give her a gas safety certificate before she entered into occupation, but in November 2017, provided her with a copy of a certificate dated January 2017.
At first instance, the landlord was initially granted and order to repossess the property under section 21 of the Housing Act 1988. However, the tenant successfully appealed that decision on the grounds that they were not provided with a gas safety certificate prior to moving in.
Despite the landlord making the certificate available after the tenancy had begun, the courts initially held that the section 21 notice was invalid, referring to a similar case in which the certificate was made available less than two weeks after the tenant moved in.
The Court of Appeal found in favour of the landlord. In a majority 2:1 decision, it held that section 21 notices are valid provided a gas safety certificate is issued before the notice is given to the tenant and not before a tenant moves into a property.
Comment for the property guardianship sector
Whilst the primary position with regard to the legal status of property guardians remains that they are licensees, there may continue to be factually specific instances where a property guardian company inadvertently creates an assured shorthold tenancy (“AST”) for failing to follow guidance in providing shared living space to property guardians (although if you are faced with a property guardian asserting they have an AST, please get in touch as we have tested legal arguments to defend your position).
This decision allows private rented sector landlords and property guardian companies (who have inadvertently created an assured shorthold tenancy) the opportunity to retrospectively issue a gas safety certificate and subsequently serve notice under section 21 of the Housing Act 1988.
Going forward however, housing ministers remain committed to abolishing section 21 altogether. The Housing Minister has confirmed such changes will only be made “in a considered manner” and not as an immediate response to the current pandemic. The current position with regard to possession proceedings remains as set out in our last update.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.