Landlords beware – Section 21 path permanently closed following irremediable error
A Landlord who lets a residential property to a Tenant on an assured shorthold tenancy and takes a deposit must, within 30 days of the deposit having been received, ensure that
- the deposit is lodged with an appropriate tenancy deposit scheme; and
- the Prescribed Information must be provided to the tenant.
A Landlord will be liable to the Tenant for a penalty of up to 3x the value of the deposit if the Landlord fails to lodge the deposit and/or provide the prescribed information to the Tenant within the 30 day period, even if the Landlord's failings are later corrected.
A further consequence of a Landlord's failure to secure the deposit with an appropriate deposit scheme and/or provide a Tenant with the Prescribed Information within the 30 day window for doing so, is that a Landlord is unable to serve a section 21 notice until either the deposit is returned to the Tenant and/or the prescribed information is provided to the Tenant.
Given that the section 21 procedure is a 'no fault' process that enables a Landlord to recover possession of a property without any reason, the inability to serve a section 21 notice could leave a Landlord stuck with a tenant that it no longer wants. If the Tenant is paying rent and not causing any problems for the Landlord, some may ask why the inability to serve a section 21 notice would be a problem. However, a Landlord may, for example need to sell their property for financial reasons and want vacant possession to maximise the selling price. An inability to rely upon the section 21 procedure could cause a Landlord significant difficulties.
Private Landlords are also required to ensure that at the commencement of a new assured shorthold tenancy of a residential property that
- the Tenant has the "right to rent", that is, the right to reside in the UK;
- the Property is fitted with
- Carbon monoxide alarms in all rooms with a solid fuel burning appliance, and
- Fire alarms on all floors of the property
- the Tenant is provided with
- an Energy Performance Certificate ("EPC")
- an up to date Gas Safety certificate ("GSC")
- the current version of "How to Rent - the Checklist for Renting in England" Booklet (the latest version, as at the date of this article, was published on 9 July 2018)
Just as a Landlord's ability to issue a section 21 notice is conditional upon a Landlord having complied with legislative requirements in respect of a Tenant's deposit, a Landlord is also unable to issue a Section 21 Notice in circumstances where a Landlord has failed to provide a Tenant with an EPC, GSC and/or the "How to Rent" booklet.
Some Landlords appear to have been under the mistaken belief that the failure to provide an EPC, GSC and/or How to Rent Booklet at the commencement of the tenancy could be remedied in much the same way that the failure to properly deal with deposits and prescribed information can be, that is, that provided the documentation is given to the Tenant before a section 21 notice is issued, a Landlord can still serve a Section 21 Notice.
However, in February 2018, HHJ Luba QC confirmed that the provision of a Gas Safety Certificate was a "once and for all" obligation that could not be rectified if it was not fulfilled prior to the commencement of the tenancy.
The case in question was concerned with a Landlord's failure to provide a Tenant with a Gas Safety Certificate at the commencement of the tenancy - the Gas Safety Certificate was not issued until 11 months after the start of the tenancy. Whilst the judgment related to a County Court appeal, given HHJ Luba's expertise in Housing Law, it is likely that this decision will be widely followed.
Furthermore, it is likely that the determination that the obligation to issue a Gas Safety Certificate at the outset of the tenancy is "once and for all" obligation will be applied to the obligation to provide Tenants with an EPC and/or the "How to Rent" Booklet at the commencement of the Tenancy also. Any Landlords that have failed to issue these documents at the commencement of the Tenancy should take legal advice on their options before issuing a section 21 notice.
If you have any queries arising from this article, would like to suggest a topic for a future article or wish to discuss a contentious property issue, contact Chris Drinkall, Head of Rollits' Property Dispute Resolution Team on 01482 337367 or firstname.lastname@example.org
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.