Court of Appeal clarifies EPC and Gas Safety Certificates are not required for possession proceedings in relation to a pre-October 2015 tenancy.

A landlord must serve a section 21 notice of seeking possession to begin "no fault" possession proceedings of premises let under an assured shorthold tenancy ("AST"). Under the Deregulation Act 2015 ("the 2015 Act"), a section 21 notice cannot be served if the landlord is in breach of certain prescribed requirements. Section 41(1) of the 2015 Act restricts these requirements to ASTs granted on or after 1 October 2015, and the Court of Appeal has recently been asked to clarify whether they apply to ASTs that began prior to this date.

Background

As set out above, the 2015 Act made it unlawful to serve, in relation to an AST of a dwelling-house, a section 21 notice when a landlord is in breach of certain prescribed requirements. The requirements can be imposed on landlords by any enactment provided they relate to:

1. The condition of the property or its common parts;
2. The health and safety of occupiers of the property; or
3. The energy performance of the property.

Section 41(1) of the 2015 Act restricts these conditions to ASTs granted on or after 1 October 2015, although subsection (3) states:

"At the end of the period of three years beginning with the coming into force of a provision of [the above], that provision also applies to any assured shorthold tenancy of a dwelling-house in England:

(a) which is in existence at that time, and

(b) to which that provision does not otherwise apply by virtue of subsection (1) or (2)."

The Court of Appeal has now clarified the meaning of subsection (3) and confirmed that, on current legislation, the requirements apply only to ASTs which began after 1 October 2015.

The facts in Minister v Hathaway

A 12-month AST was entered into in March 2008, which became a statutory periodic tenancy in March 2009 and remained one thereafter. On 6 December 2018 the landlord served a section 21 notice without having provided an energy performance certificate. The tenant defended the possession proceedings on the basis that the landlord should have provided an EPC prior to serving a section 21 notice, in accordance with the 2015 Act.

The court decided at first instance that service of an EPC was required and therefore the section 21 notice was invalid, however, on appeal the decision was overturned. The tenant was granted permission to appeal to the Court of Appeal on the basis the issue "is one which has divided judges and commentators".

The Court of Appeal

The tenant argued section 41(3) applied and from 1 October 2018 all tenancies, no matter their start date, were caught by the requirements set out above. The landlord, however, argued that until secondary legislation is introduced there is no prescribed requirement which would give rise to any section 21 notice being invalid.

The Court of Appeal held that the argument raised by the tenant was "misplaced" and until the Secretary of State exercises its powers by introducing secondary legislation the provisions do not apply. Whilst the subject of this claim was EPCs, this decision will apply to all the prescribed regulations including How to Rent guides and gas safety certificates. This decision will be welcome news for landlords who let to tenants pursuant to ASTs which were granted prior to the 2015 Act coming into force.

Whilst it is true that the government has confirmed its commitment to abolish "no fault" section 21 evictions in the private rented sector (and a Renters' Reform Bill was promised in the 2019 Queens speech to achieve this), the Bill is still awaited. You can see our views on the need for reform from our  article from November 2019 here.

In the meantime, landlords should ensure they keep up to date with the prescribed requirements. If you are a landlord and require assistance in obtaining possession of tenanted property, or advice on the prescribed requirements, then please get in touch with the real estate dispute resolution team at Howard Kennedy LLP to discuss your options.