Gas Safety Records and Section 21 notices: where do things stand now?

Trecarrell House Limited v Rouncefield (2020) EWCA Civ 760 

The Court of Appeal recently made an important decision for landlords and tenants, about how and when a landlord will be barred from ending a normal private tenancy, if they have failed to comply with the relevant Gas Safety regulations.

According to the law as it appeared to stand before this appeal, landlords who had not provided valid Gas Safety Records at the right time could then never require their tenants to leave, without relying on one of the statutory “good reason” grounds for possession, such as rent arrears, breach of tenancy, etc.

This is an appeal which went in favour of the landlord, and it will reduce the effects of this civil penalty (there are still parallel criminal penalties which are unaffected) against some landlords who have breached those regulations. That said, it will only apply in certain – perhaps rather narrow – circumstances.

Background

The vast majority of people who rent their home privately do so under an Assured Shorthold Tenancy. Even if not labelled as one, this is probably what a tenancy will be if the landlord is not a local authority or housing association (there are exceptions for some arrangements such as where the landlord is a live-in landlord, for holiday lets, etc.)

Unlike the Secure Tenancies which council landlords normally grant, or the Assured Tenancies which housing association landlords normally grant, or for that matter the Regulated Tenancies which used to be the norm for private sector tenants before 1989, Assured Shorthold Tenancies can be ended at will by the landlord once any fixed term is up, without their needing any reason or justification such as rent arrears, breach of tenancy or anything else. The idea is, that so long as the landlord serves a valid notice under Section 21 of the Housing Act 1998 (a “Section 21 notice”) giving the tenant at least two months’ notice¹, the court will automatically grant the landlord a possession order to require the tenant to leave.

A tenant’s only defence to a possession claim brought on the grounds of a Section 21 notice, is to show that the notice was not valid. There are a number of reasons why a Section 21 notice may not be valid (some of which will only apply if the tenancy began after a certain date):

• First, there are strict requirements about getting the details in the Section 21 notice right. It will not be valid if the names or addresses are wrong, if it is on the wrong form, if the expiry date does not give a full two months’ notice, and so forth.
• Second, it will not be valid if it has been served during the first four months after the tenancy started (unless it is a replacement tenancy).
• Third, in certain circumstances it will not be valid if it is served in response to complaints about disrepair (“retaliatory eviction”).
• And finally, it will not be valid if the landlord has failed to meet one of the various regulatory requirements which apply to Assured Shorthold Tenancies. These include complying with the tenancy deposit protection legislation, any HMO licence / Selective Licencing requirements, the Tenant Fees legislation, and (getting to the point of this blog), the requirements under the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015). These Prescribed Requirements Regulations are about landlords providing tenants with “How to rent” leaflets, Energy Performance Certificates and Gas Safety Notices.

There is quite a lot to get right, and unwary landlords are easily tripped up. If they are, then as a general rule, albeit that on the first attempt their claim for possession may have failed, they can put right what they have got wrong, and start over again – hopefully having learnt not to make the same mistake again. For instance, if they failed to protect a deposit they received, they can serve a valid Section 21 notice after they return the deposit and proceed from there. If they failed to provide an Energy Performance Certificate, they can serve a valid Section 21 notice after they provide one. And so on.

The Gas Safety Record timing problem

However, there lurks in the Prescribed Requirements regulations one major – potential – exception to this rule. The way they define the prescribed requirement about providing Gas Safety Notices is by referring to the much earlier Gas Safety (Installation and Use) Regulations 1998. The Gas Safety regulations came into force nearly 20 years before. They contain numerous different requirements about gas safety, with their own (criminal) penalties for people who breach them. The Prescribed Requirements regulations add the additional penalty of not being able to serve a Section 21 notice, but they only do this in relation to the requirements contained in two specific paragraphs of the Gas Safety regulations, and with an added proviso meant to exclude some of the content of these paragraphs.

The two paragraphs in question are regulations 36(6) and 36(7). Essentially, they contain two main requirements. First, a landlord has to give to any new tenant before they move in a copy of the Gas Safety Record relating to the last inspection which took place. Second, a landlord then has to give existing tenants a copy of the Gas Safety Record from each new inspection (they have to take place yearly), within 28 days of the re-inspection date². The proviso which the Prescribed Requirements regulations makes reads as follows (with my paraphrasing in the square brackets):

2.(2) For the purposes of [the validity of Section 21 notices], the requirement [to comply with the Gas Safety regulations] 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.

Quite what the effect of the Prescribed Requirements regulations is in relation to Gas Safety Notices – and in particular the proviso – has been a source of speculation and confusion since the Regulations were published; but it came into focus in a County Court appeal a little over two years later, Caridon Property Ltd v Monty Shooltz (Central London County Court, 2 February 2018). In that case the Court held that the only time limit which the proviso excludes is the 28 day time limit (i.e. the one for providing the yearly re-inspection certificates).

The Court held that the requirement about the time limit for providing the initial Gas Safety Record to any new tenant was not, and was itself a prescribed requirement for the purposes of serving a valid Section 21 notice. According to this interpretation, if a landlord has not given the tenant a Gas Safety Record before the tenant moved in, then they cannot serve a valid Section 21 notice to end the tenancy, ever – short of time travel. This was something of a bombshell: the defining feature of what makes an Assured Shorthold Tenancy “shorthold” is removed, and the tenant attains similar security of tenure to a social housing tenant or old-style Regulated Tenant – potentially a tenant of their home for life, as long as they do not fall into rent arrears, etc.

Caridon Property Ltd v Monty Shooltz was a County Court Appeal. As such, although widely publicised and of “persuasive authority” for other judges in the County Court (particularly those in the London area whose decisions might be appealed to the Central London County Court), it is not a precedent binding outside the context of the particular case itself. It did not go further down the appeals process, and so things stood for a time.

A year later, another County Court appeal came to light, Trecarrell House Limited v Rouncefield (County Court at Exeter, 13 February 2019). The appeal was again on the same issue as in Caridon Property Ltd v Monty Shooltz, i.e. whether in principle a failure to provide a gas safety certificate before the start of the tenancy was a breach which cannot be remedied without a time machine. In this case the landlord had indeed had a Gas Safety check carried out before the start of the tenancy, and they did provide the Gas Safety Record from that inspection to the tenant, but not until some nine months after the tenancy began. The first instance County Court decision was in favour of the landlord, but in the County Court appeal, the court reached the same conclusions about the timing problem as had been reached in Caridon, and allowed the tenant’s appeal.

Still, this was a County Court appeal and so not an authority technically binding outside the context of the particular case itself.

The recent Court of Appeal decision

Trecarrell House Limited v Rouncefield (2020) EWCA Civ 760

This time, however, the landlord appealed to the Court of Appeal, and so we have a Court of Appeal precedent, binding now on all further County Court cases turning on the same essential facts.

The tenant, Ms Rouncefield, argued as the County Court appeal judges had done in this case and in Caridon Property Ltd v Monty Shooltz: that the most obvious and straightforward meaning of the proviso in the Prescribed Requirements regulations is that it excludes the 28 day period for providing the yearly re-inspection certificates, but it has no bearing on the requirement to provide the initial Gas Safety Record before the start of the tenancy. The timing of that initial Gas Safety Record is therefore an essential part of the prescribed requirements about providing Gas Safety Records.

The landlord, Trecarrell House Limited, argued two alternative possible interpretations – straining the language somewhat, but both just about holding together. According to these:

1. The proviso actually excludes altogether the requirement to provide a Gas Safety Record relating to the last inspection before the tenancy began; it is only a prescribed requirement for Section 21 purposes to provide the new Gas Safety Records each year, minus the 28 day time limit.
2. Alternatively, it is a prescribed requirement to provide the Gas Safety Record for the last inspection before the tenancy began, but there is no time limit to do that, as long as it is provided before the Section 21 notice is served.

In considering these possible alternatives, the three Court of Appeal judges did not arrive at a unanimous final decision. By a majority of 2:1, they allowed the landlord’s appeal, on the basis of the second of the two alternatives.

The reasoning behind the majority decision to allow the appeal focussed on trying to make sense of the legislative purpose behind the Prescribed Requirements regulations. On this basis they rejected the landlord’s first argument (i.e. that it was not a prescribed requirement at all to provide a copy of the Gas Safety Record from the last inspection before the tenancy started). Quite apart from this not being the most obvious meaning of the words when read in context, they reasoned that it would be illogical to exclude for no apparent cause all new tenants from the protection these regulations are supposed to provide. It was therefore unlikely to be what the legislature intended by the words and the interpretation should be rejected.

On similar lines, however, they also rejected the tenant’s interpretation which the County Court appeal judges in this case and in Caridon Property Ltd v Monty Shooltz had favoured. Just as it would be illogical for the legislature to have intended to exclude all new tenants from protection as compared with existing tenants, similarly it would be illogical for the timing to be “of the essence” for new tenants but not for existing tenants, and for new tenants therefore to have so much more protection than existing tenants. Notwithstanding that the interpretation fits the words only awkwardly, they therefore accepted the landlord’s second argument, that the proviso was intended to exclude all time limits for providing any of the Gas Safety Records, as long as they are eventually provided before the Section 21 notice is served.

In his dissenting minority judgment, the third Court of Appeal judge in this case objects that, policy reasons aside, both of the landlord’s interpretations of the proviso are much less of an obvious and natural reading compared to the tenant’s interpretation. Applying the normal rules of statutory interpretation, his view was that this should be determinative.

It remains to be said that the tenant also raised two new issues on the appeal, which had not been argued before, and turning on a different part of the factual background. These had to do with whether the landlord had breached the prescribed requirements for other reasons, namely in having failed to have carried out a Gas Safety re-inspection within the period of one year of the one before the tenancy began, and in having failed to provide a valid re-inspection Gas Safety Record before serving the Section 21 Notice. The Court of Appeal did not make a decision about this part of the appeal, but directed that, rather than coming to a conclusion, the case should now be passed back to the County Court so that these further issues could be properly argued – and any evidence examined – there.

Comment

As a Court of Appeal decision this is now binding on all County Court cases turning on the same facts. But what exactly does that mean? What it can definitely be said to means is that, if a landlord has not given their tenant a Gas Safety Record before the start of the tenancy³, they can still serve a valid Section 21 notice, as long as they have – as the landlord had in this case – actually provided a copy of it subsequently, before serving the Section 21 notice.

However, for the Court of Appeal decision definitely to be applicable, then there has to have been a Gas Safety inspection which took place sometime during the year before the tenancy began, and the landlord – as it did in this case – has to have provided a copy of the Gas Safety Notice relating to that inspection.

If a landlord is not able to provide a Gas Safety Notice relating to an inspection which took place within the year before the start of the tenancy, then this Court of Appeal decision is unlikely to help them: the case does not support the argument that it is enough for a landlord to provide only a Gas Safety Notice relating to a later inspection that took place after the tenancy began. For one thing, those were not the facts of this case, and for another, the reasoning behind the majority decision specifically and emphatically rejects the argument the landlord attempted, that providing a Gas Safety Notice from the last inspection before the tenancy began is excluded from being a prescribed requirement altogether. Indeed, they went to pains to say that it is only the time limit for providing it that is excluded.

It appears to follow, therefore, that landlords will still be barred (for ever, short of time travel) from using a Section 21 notice to end the tenancy, if:

• they did not actually have an inspection carried out during the year before the tenancy began, or
• even though they did, they no longer have a copy of the Gas Safety Record relating that inspection and have not previously provided a copy to the tenant.

And so, one wonders how many landlords this decision will actually help, beyond perhaps easing the evidential burden on landlords who, for instance, have not been so prudent as to get their tenant to sign a receipt for their initial Gas Safety Notice. One would have thought that most landlords who have had a Gas Safety check carried out during the year before the tenancy began, would provide a copy to the tenant as they are required to; that is probably the reason they had the Gas Safety check carried out in any event.

Whereas, for the majority of landlords who have not provided a Gas Safety Notice before the tenancy started, that is probably because they did not have one to provide. For these landlords, and despite the problems highlighted in the judgment about the probable legislative intentions behind these regulations, it still seems that no Section 21 notice will ever be valid. But given the clumsy way the regulations were drafted, this was probably about as far as the courts could go to achieve some semblance of consistency in this area. Ultimately, achieving consistency will be a job for the government, or for Parliament, in amending the poorly drafted legislation itself.

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¹At the time of writing this has been temporarily extended to three months, as one of the Covid-19 pandemic measures
²In certain circumstances, it is enough if for the landlord to leave it on display within the property or in a communal area within the building.
³or, where applicable, leave it on display somewhere