Assured shortholds - s21 notices

This page contains details of some more recent material dealing with s21 notices:

  • Gas safety certificates - Trecarrell House
  • Section 21 notice can't be served by head landlord during mesne tenancy
  • Starter tenancy - break clause - 6-month rule
  • Tenancy Fees Act - inability to serve s21 notice where Act is breached.

 

Gas Safety Certificates

Served after tenant took up occupation of the property

Trecarrell House Ltd v Rouncefield

[2020] EWCA Civ 760

Summary

The failure to serve a gas safety certificate (as required by Gas Safety (Installation and Use) Regulations 1998, reg 36(6)(7)) on a tenant before the tenant took up occupation of the demised premises was not fatal to the landlord’s later ability to serve a section 21 notice.

Facts

The landlord granted a tenancy to the tenant in February 2017 but did not serve the tenant with a copy of the gas safety certificate, dated 31 January 2017, until November 2017. Nor did the landlord display a copy of that certificate in the demised premises.

At the landlord's claim for possession the tenant argued that the s21 notice, served in May 2018, was invalid for failure to comply with the requirements of the  Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 reg.2(1), which, it was argued, required the gas safety certificate to be served before the tenant took up occupation of the premises in order for the landlord to validly serve a section 21 notice.

Issues

Did the failure to serve a gas safety certificate before the tenant took up occupation of the premises forever render the landlord unable to validly serve a section 21 notice?

First instance

The County Court judge held that the regulations could only be read so as to make the requirement to serve a gas safety certificate before the tenant takes up occupation of the premises a prescribed requirement, rendering the landlord forever unable to validly serve a section 21 notice.

Decision on appeal

In what was, it is fair to say, a pretty strained reading of the Regulations, the Court of Appeal found that they did not mean that a landlord who had failed to serve a gas safety certificate on the tenant at the outset was permanently deprived of the right to bring the tenancy to an end by service of a section 21 notice.

The Court of Appeal pointed out the disparity in treatment between the failure to serve a certificate at the outset, and the failure to serve a certificate within 28 days of a later gas safety check being carried out. The latter could be remedied, but on the tenant’s construction of the Regulations, the former could not.

Further, the statutory inhibition on the right to serve a section 21 notice was not the primary sanction for breach of the gas safety requirements – such a breach is punishable as a criminal offence under s.33 of the Health and Safety at Work etc. Act 1974. In addition, all other breaches of the prescribed requirements are remediable in some way. For example, a failure to protect the deposit can be remedied by repaying the deposit to the tenant.

Given the purpose of section 21, which is to give a landlord a “no fault” right to possession of their property, the landlord’s construction of the Regulations was to be preferred, and it was held that the failure to serve a gas safety certificate at the outset of the tenancy could be remedied in order to allow the landlord to serve a section 21 notice.

Comment

This will be a welcome decision for landlords, who have not received much good news recently. Many county courts had been following the earlier county court decision in Caridon Property Limited v Shooltz which went the other way, and landlords had found themselves dealing with tenants who were very difficult to remove, at least not without a lengthy and expensive argument about whether the tenant was in breach of the terms of the tenancy.

For so long as section 21 of the Housing Act 1988 remains in force (and it may soon be repealed) landlords are now able to rely on a section 21 notice even though they did not serve a gas safety certificate at the start of the tenancy so long as the landlord:

  • Was actually in possession of a current a gas safety check when the tenant entered into occupation; and
  • Serves copies of the gas safety certificates on the tenant before serving a section 21 notice.

 

Service by head landlord

Barrow v Kazim

[2018] EWCA Civ 2414

Summary

A s21 notice under the Housing Act 1988 cannot be served by a superior landlord during the term of a mesne tenancy.

Facts

The Respondents were the freehold owners of a block of flats. Their predecessors in title had granted a headlease to a letting agency on the basis that the agency was then permitted to sub-let the individual residential flats on assured shorthold tenancies, which it did. The Respondents served notice to quit on the agency, and, at the same time, also served s21 notices on the occupational assured shorthold tenants.

Issue

The question for the court was whether the Respondents, as superior landlords, were entitled to serve a notice under s21(1)(b) during the currency of the mesne tenancy held by the agency.

County court decisions

The District Judge, and on appeal, the Circuit Judge held that a superior landlord was entitled to serve a notice under s21(1)(b). The statute did not require the landlord to be the landlord at the date of the notice. The essential criterion was whether he was entitled to possession of the premises on the coming to an end of the assured shorthold tenancy. In this case, the Respondents would have been so entitled as, once the mesne tenancy had been determined by notice to quit, the occupational tenants would have become the Respondent’s tenants by virtue of s18 of the Housing Act 1988.

Decision on appeal

The decision was reversed. A Section 21 notice needed to be served by a tenant’s direct landlord. There was no reason to construe the statute to include a requirement to look to the future and ascertain what would happen when the assured shorthold tenancy came to an end.

Comment

This decision makes it clear that a section 21 notice should be given by the direct landlord at the time that the notice is served. Superior landlords are not able to give a section 21 notice to occupational tenants during the currency of a mesne tenancy.

 

Six month notice period under s21

Starter tenancy - break clauses

Livewest Homes Ltd (Formerly Liverty Ltd) v Bamber

[2019] EWCA Civ 1174

Summary

The six-month notice period required under the Housing Act 1988 (“the 1988 Act”) s.21(1A) and s.21(1B) assumed the expiry of a fixed-term tenancy by effluxion of time, and not as a result of its premature termination under a break clause. Section 21(1)(B) therefore operated as a bar to the court making a possession order only where the term of the assured shorthold tenancy had expired by effluxion of time.

Facts

The Landlord granted to the tenant a second seven-year tenancy, which included a 12-month starter period, which could be extended by six months. The tenancy could be ended by the landlord giving two months’ written notice during the starter period or extended starter period. In light of allegations of anti-social behaviour, the landlord sent a notice during the starter period purporting to exercise the two-month break clause and to be a notice under s21 of the 1988 Act ending the tenancy. The Landlord bought possession proceedings.

Issues

The tenant argued that the notice did not comply with the provisions of section 21(1B) of the 1988 Act in that the Landlord had not given at least six months’ notice before the making of the possession order.

First instance

The trial Judge rejected the Landlord’s argument that the tenancy had become a statutory periodic tenancy after service of the notice. However, he granted possession on the basis that section 21(1A) and section 21(1B) of the 1988 Act were not applicable to a tenancy with a break clause because, where that clause was exercised, it did not come to an end by the effluxion of time.

On appeal to the High Court, the Landlord accepted that section 21(1A) and section 21(1B) applied to the tenancy before the service of the break notice as it was a tenancy of "a term certain of not less than two years". However, Dingemans J accepted the Landlord’s argument that on giving two months’ notice in the starter period, the tenant did not have a fixed term tenancy for a term certain of not less than two years. The effect of service had left the tenant with a statutory periodic tenancy pursuant to s5(2) of the 1988 Act. That could be terminated by the service of a s21 notice, and sections 21(1A) and 21(1B) were of no application. He found that it was necessary to ask whether the tenancy was a fixed-term tenancy at the date of the hearing, rejecting an argument that the words "it is a fixed term tenancy for a term certain of not less than two years" in s.21(1A) should be read as "it was a fixed term tenancy for a term certain of not less than two years".

Decision on appeal

On further appeal to the Court of Appeal the tenant’s appeal was dismissed.

The CA held that ministerial statements in relation to the Localism Act 2011 (which introduced sections 21(1A) and 21(1B)) made clear that the six-month notice period assumed an expiry of the fixed term by effluxion of time, and not as a result of its premature termination under a break clause.

However, the Judge was wrong to construe the word “is” as importing a requirement that the tenancy should remain a fixed-term tenancy for a term certain of not less than two years as at the date of the hearing or the date of issue of the possession proceedings. That would make the provisions inoperable and could not have been what Parliament intended. Section 21(1A) did no more than identify the type of tenancy to which the notice provisions in Section 21(1B) applied. The use of the present tense was not intended to provide a condition which had to be satisfied as at the date of the possession hearing.

Section 21(1B) had to be read as a bar to the court making a possession order only where the term of the assured shorthold tenancy had expired by effluxion of time.

LJ Patten went on to make obiter comments as to the Landlord’s argument that a fixed-term tenancy with a break clause allowing it to be terminated during the first year was not a tenancy for a “term certain” within the meaning of Section 21(1A) or section 107A(2)(a) of the Housing Act 1985. Although it was not necessary to decide the point, his Lordship would have provisionally rejected the point. The draftsman of the Localism Act 2011 had adopted the use of a well-established nomenclature to simply describe a tenancy granted for a term of years.

LJ Patten also commented, again obiter, that a landlord could give a tenant six-months’ notice under section 21(1B) late (i.e. where there is less than six-months left to run on the tenancy) and bring the tenancy to an end. To hold otherwise, and thereby bar landlords from obtaining possession orders under section 21 where the required notice was not served in sufficient time, would not be justified by legislation or its intended purpose.

Comment

This Judgment will be welcomed by providers of social housing as it reinforces the contractual methods of bringing a tenancy to an end. The obiter comments by LJ Patten also provide a useful suggestion of how Section 21 would be construed by a Court if the matter ever needed to be properly determined.

 

Tenant Fees Act 2019

Section 21 Notice

Tenant Fees Act, s17

The Assured Tenancies and Agricultural Occupancies (Forms) (Amendment) Regulations 2019

Summary

The Tenant Fees Act prevents the service of a s21 notice where the prohibitions in the Act have not been complied with. A new form 6A - the prescribed form to use under s21 of the Housing Act 1988 – was published to be used in respect of assured shorthold tenancies to reflect these changes. It came into force on 1 June 2019.

More detail

Section s17(3) Tenant Fees Act 2019 provides that no s21 notice may be given where a landlord has breached s1(1) or Schedule 2 of that Act so long as all or part of the prohibited payment or holding deposit has not been repaid.  There are also exceptions where the payment has been utilised with consent towards the rent, a tenancy deposit: 

 

17(3) No section 21 notice may be given in relation to the tenancy so long as all or part of the prohibited payment or holding deposit has not been repaid to the relevant person.

(4) Subsection (3) does not apply where none of the prohibited payment or holding deposit has been repaid to the relevant person if, with the consent of the relevant person—

(a) the payment or deposit has been applied towards a payment of rent under the tenancy,

(b) the payment or deposit has been applied towards the tenancy deposit in respect of the tenancy, or

(c) some of the payment or deposit has been applied as mentioned in paragraph (a) and the rest has been applied as mentioned in paragraph (b).

(5) Subsection (3) does not apply where part of the prohibited payment or holding deposit has been repaid to the relevant person if, with the consent of the relevant person—

(a) the remaining part has been applied towards a payment of rent under the tenancy,

(b) the remaining part has been applied towards the tenancy deposit in respect of the tenancy, or

(c) some of the remaining part has been applied as mentioned in paragraph (a) and the rest has been applied as mentioned in paragraph (b).

The notes of the new Form 6A take account of those provisions.

 

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