Most landlords will be well aware of the Deregulation Act 2015 and how this legislation has added to the myriad of new rules and regulations that landlords need to be aware of if using an agent to manage their property, or be fully up to speed with if managing themselves.
So, just to re-cap:
From the 1st October 2015 landlords need to ensure that all new tenancies after that date and including tenancy renewals, will need to have the following items served on the tenant at the start of the tenancy:
- Gas Safety Certificate (If there is gas)
- Energy Performance Certificate
- How to Rent Guide (the correct version – and there have been many!)
The usual rules relating to protecting the deposit apply in that the deposit must be protected within 30 days of receipt and landlords will need to comply with the particular rules of whichever tenancy deposit scheme they are using.
So far so good!… and up until a couple of recent County Court cases it was. Provided the tenancy deposit regulations had been complied with, and if not, you could return the deposit provided it was returned before a s21 notice was served, you would be okay.
It became accepted practice that if the Gas Safety Certificate, EPC, and How to Rent Guide had not been provided at the beginning of the tenancy, you could simply serve them on the tenant retrospectively, as long as this took place before you served the s21, and that would be fine.
The first County Court case, Assured Property Services Limited v Ooo (yes Ooo is correct and not a typo), was heard at Edmonton County Court in June 2017. This claim involved a hapless landlord wishing to get his property back by virtue of a s21 notice which the tenant decided was invalid due to the there being no gas certificate served at the time of the tenancy.
Another case, Caridon Property Limited v Monty Shooltz, February 2018, further supported this proposition.
Unfortunately, the County Court Judges that presided at both hearings agreed that the Gas Safety Certificate had to be served at the start of the tenancy, despite what had become common practice.
So, being able to evidence that the Gas safety certificate, and to be safe the EPC and How to Rent guide were served at the time or before the tenancy was signed is vitally important.
Now, although County Court cases do not set a precedent as far as case law is concerned. You can bet your bottom dollar that every duty solicitor in every county court in the land will be aware of these two cases. Indeed, I have seen it for myself in several courts, where the aim of the defendant was to scupper the landlords claim for possession. Luckily in all the cases I have had, we also had a s8 notice with substantial rent arrears.
Many landlords will incorrectly or correctly take the view that their tenants won’t know about these two cases. However, be that as it may, if your tenants are represented in court by the Duty Solicitor because your tenant may be entitled to legal aid, or you just so happen to have a tenant who just does not particularly want to leave for whatever reason – you will not be able to get possession using a s21 notice. If you lose your case, you will end up potentially paying your tenants costs, even if they are legally aided.
So where does that leave you?
Well, If your tenant is up to date with the rent or they have arrears but insufficient to use Ground 8 in Schedule 2 of the Housing Act 1988, and you are not able to use Ground 1, (because you are moving back to the property having previously lived there), then you might find it very difficult indeed.
Some experts have suggested that it almost has the effect of converting your assured shorthold tenancy into an assured tenancy. Assured tenancies are given out by housing associations to tenants in social housing, pretty much for as long as the tenant wants to be there so long as they don’t default on their agreement.
Scary isn’t it! – You got into property to invest for your future and now it is possible that unless your tenant is in serious breach of contract, you may not be able to get them out!
I would therefore suggest – even if you are using an agent, make sure you can evidence via a signed check list of some description (some agents are now writing the checklist into the agreement), receipt of the following:
- Gas Certificate
- How to Rent Guide
Don’t forget that you will need to be able to evidence that you have served the above items. If you provided them but can’t really prove it you’re going to have a problem if it’s defended.
What can you do if this happens to be your problem?
Well unless they owe at least 2 months of rent arrears and you think they are likely to owe more by the time you are in court, then not much as far as securing possession of your property with a court order is concerned. Even rent arrears claims are not guaranteed to get you possession despite you starting out with mandatory Ground 8. If there is a valid counterclaim your proceedings may end up failing as the tenants apply for setoff. The value of the counterclaim offsetting the outstanding arrears.
Of course, if you have previously lived at the property, and you have a clause in the tenancy agreement that allows you to seek possession on Ground 1 in Schedule 2 of the Housing Act 1988, you will have another mandatory ground you can use. However, I have to say, the number of tenancy agreements I have seen lately that omit this really useful ground is staggering.
Another Option – and you cannot of course force your tenant, is to do as follows:
- Have a friendly discussion with your tenant – don’t let on that there is a problem of course.
- Explain that you may need the property back in a year or so’s time
- Tell them you’re proposing to ask them to sign a new agreement, they don’t have to you’ll say, but if they do, you’ll reduce the rent for them.
- Make them aware that signing a new agreement in no way reduces their occupation rights and that you will still need to serve them with a s21 notice should you eventually need possession in the future.
- There may be other reasons why you might want them to sign a new agreement – a new lender’s mortgage conditions, Landlord Insurance etc – this might be more palatable for them perhaps.
- Don’t over complicate it though.
- If you get them to agree – make sure you get them to sign to confirm they have received the Gas Safety Certificate, EPC, How to Rent guide.
I’m not sure which landlords body it was, but I believe one of the more vocal landlord organisations has raised this issue with the Government, highlighting the fact that this caselaw goes against the original purpose and intent of the Assured Shorthold tenancy, and they were met with the response that there were no plans to make any legislative changes in the light of this caselaw – so, don’t hold your breath for a solution, just don’t get caught out.
Of course, if you are in this position and you need to sell fast or move in yourself, all of the above can seem complicated and time consuming. Give us a call and we will be more than happy to help.