Residential tenancies: extended paperwork trap set to ensnare landlords

As of 1st October 2018, new statutory provisions (Section 41 (3) of the Deregulation Act 2015 ("DA 2015")) come into force, which substantially limit the freedom of landlords of many residential tenancies, who wish to use the fast-track Section 21 procedure as a means of terminating the tenancy. Notices served under Section 21 Housing Act 1988 allow landlords to terminate assured shorthold tenancies (ASTs) by means of a non-fault, accelerated possession claim procedure. For several years landlords of new ASTs have had to comply with various statutory obligations in order to have the right to use the fast-track section 21 procedure. However, as of 1 October 2018, landlords of existing ASTs will be met with additional restrictions, should they wish to invoke the provisions of Section 21. Most notably:

  • Retaliatory eviction - Landlords will be prevented from serving a Section 21 Notice if they have failed to carry out repairs identified by the Tenant as being necessary (Section 33 DA 2015)
  • Time Limits - Landlords will only have 6 months from the date on which the Notice was given to act on it (Section 36 DA 2015)
  • Prescribed Information must be provided - Landlords will be required to provide tenants with Energy Performance Certificates (EPC) and Gas Safety Certificates (where appropriate) free of charge (Section 38 DA 2015)
  • Prescribed Form of S21 Notice - Landlords will be required to use prescribed Form 6A when serving Section 21 Notices for all ASTs (Section 37 DA 2015). 

Caridon Property Limited v Monty Shooltz 2 February 2018 (not reported)

The Section 21 procedure and its relationship with the Deregulation Act 2015 was recently considered in the unreported case of Caridon Property Limited v Monty Shooltz ("Caridon").

Caridon concerned a possession claim brought by landlord, Caridon Property Limited, who had served a Section 21 Notice on its tenant in an attempt to regain possession. The landlord failed to provide the tenant with a gas safety certificate prior to the commencement of the tenancy, and therefore the tenant asserted that the Section 21 Notice, that was served, was invalid.

In the Central London County Court District Judge Bloom accepted the tenant's arguments, finding that the landlord should have provided the required information to the tenant at the commencement of the tenancy. The landlord appealed that decision. However, His Honour Judge Jan Luba QC upheld the Court at First Instance's decision. 

Consequences

Although the decision in Caridon is not binding, it is likely to be persuasive to Judges in future cases. As such, prior to 1 October 2018 (or as soon as possible thereafter), it would be prudent for all landlords to: 

  • Ensure that all existing tenants have been provided with copies of EPC Certificates and Gas Safety Certificates
  • Diarise the 6 months from the giving of any Section 21 Notice to ensure they are within time to issue proceedings
  • Prepare to use Form 6A from 1st October when serving all Section 21 Notices.

The new restriction likely to create the biggest financial burden for landlords is the requirement to provide information on the condition of the property to all tenants, for which the landlord must bear the cost. For many landlords this may mean commissioning new surveys of properties that may have had tenants in them over a considerable period of time. If such information is not provided and the landlord later wishes to attempt to regain possession via the service of a Section 21 Notice, following the decision in Caridon, the Notice is likely to be held invalid.