CARIDON PROPERTY LTD -V- MONTY SHOOLTZ

by CARIDON LANDLORD SOLUTIONS

13:58 PM, 8th August 2019
About a month ago

CARIDON PROPERTY LTD -V- MONTY SHOOLTZ

Make Text Bigger
CARIDON PROPERTY LTD -V- MONTY SHOOLTZ

Many of you will be aware of the Caridon Property Ltd v Monty Shooltz case.  In short, the landlord, Caridon Property, failed to obtain a possession order based on their Section 21 notice, because His Honour Judge Jan Luba QC ruled that that the requirements of the Deregulation Act 2015 meant their failure to issue a gas safety certificate before the tenancy began invalidated the subsequent Section 21 notice for repossession.

From our perspective at Caridion Landlord Solutions, we fully recognise the vital importance of ensuring landlords have an up to date Gas Safety Certificate.  However, the fact that there is nothing landlords can do to resurrect this issue if they failed to provide a gas safety certificate before the tenancy commenced, even if they provided it since, seems a little austere.  In addition, what has not been widely reported in the Monty Shooltz case is that the dwelling itself did not have any gas appliances, these were only in the communal areas therefore we feel the ruling was misplaced and misguided.

Although the case was a County Court ruling, not a Court of Appeal ruling, it was heard before a Circuit Judge.  Since the only place that Circuit Judges sit in London is at the Central London Country Court, the London Courts have decided that this ruling is binding in all London Courts, and now appears to have set a precedence for courts nationwide, meaning many more landlords will be trapped by this ruling.  The strict judicial interpretation of the legislation, which could prevent thousands of landlords serving a Section 21 notice because of an unwitting administration error, traps them in a position they simply cannot rectify.

We had been liaising with the National Landlords Association (NLA) and Landlord Action who, like us, wanted to call on the Government to reconsider addressing the Monty Shooltz ruling.  However, of course the industry recently learnt that Section 21 notices are highly likely to be scrapped altogether in the not too distant future, turning this issue on its head entirely.

We spoke to Barrister Sena Frimpong at Holborn Chambers who agrees that the outcome of this ruling cannot have been Parliament’s intention when the legislation of Gas Safety was brought in. Two interesting points he made were: –

  1. Using deposit protection as an analogy, a landlord who has not protected the deposit in an authorised scheme within the relevant time limits is similarly prevented from serving a Section 21 notice. However, this is only UNTIL the tenant’s deposit is returned in full or subject to any deductions agreed with the tenant or the tenant makes an application to the court in respect of the landlord’s non-compliance, and the claim is either determined by the court, or withdrawn, or settled out of court between the landlord and tenant. The difference is, there is a route to resolution, so why is the Gas Safety regulation any different?
  2. If a landlord cannot serve a Section 21 to a tenant indefinitely owing to the time in which the Gas Safety Certificate was issued, what would happen if the landlord sold the property and transferred ownership to someone else with the tenant in situ? Would the new landlord be bound by his predecessor’s mistake?

While we await the possible abolition of Section 21 and/or subsequent changes to Section 8, we would urge the government to consider this issue as it is grossly unfair that three is no remedy for the breach.

Contact Sherrelle for offline Universal Credit advice

Sherrelle is an independent consultant and is recommended by Property118 for landlords who require professional advice and assistance in regards to dealing with Universal credit related matters


Comments

Seething Landlord

11:52 AM, 9th August 2019
About a month ago

Even more worrying is the suggestion that the pre-requisites for service of S21 notices will transfer over to the new regime after the proposed abolition of S21 and could therefore apply to S8 notices as well.

In view of the far reaching implications it is a pity that the case was not appealed further but that opportunity is long gone and the ruling will stand unless overruled by a higher court or a change in the law via Parliament. Whilst technically not binding on Courts outside London, it is given added weight by the standing of HH Judge Jan Luba QC, who is an acknowledged expert in Property Law and one of the authors of "Defending Possession Proceedings" of which Amazon says "This book has established itself as the book that lawyers and advisers turn to in a housing crisis. It is the key 'homelessness prevention' handbook - a comprehensive guide to all aspects of the law relating to possession proceedings."

I suspect that he would be the prime candidate to head up a specialist Housing Court if such a body were ever established so as in all things we should be careful what we wish for.

Luke P

12:41 PM, 9th August 2019
About a month ago

If s.21/Dereg. requirements are indeed carried over to s.8 upon s.21’s abolition, a missing/omitted/late Gas Safety Certificate could prevent eviction for, say, arrears. Does that mean, theoretically, a tenant could run up an unlimited amount and the only way to get rid of them is when they themselves decide to move?

Old Mrs Landlord

14:12 PM, 9th August 2019
About a month ago

A very worrying aspect of this ruling is that in the past many of us have been giving the tenant all the required information documents at the time they sign the tenancy agreement but until the Caridon/Schoolz ruling had not asked the tenant to sign that they had received them. In such cases, if it ever becomes necessary to issue a Section 21, any tenant who feels aggrieved at eviction could deny having received the documents at the correct time and it would be their word against the landlord's. It really seems as if, rather than being fair to all parties, the law is increasingly being rigged in tenants' favour which will inevitably result in an exodus of landlords from the sector. As has been said above, there is no remedy for innocent mistakes or oversights or even to deal with situations where the landlord has complied with regulation to the letter but subsequent legislation has opened up loopholes to be exploited by wily lawyers acting for undesirable or defaulting tenants.

CARIDON LANDLORD SOLUTIONS

14:32 PM, 9th August 2019
About a month ago

Reply to the comment left by Seething Landlord at 09/08/2019 - 11:52
Paul Shamplina met with MHDCLG yesterday and discussed this case and its significance to the current Section 21 process. Currently we are all in limbo until it is decided what happens next.

CARIDON LANDLORD SOLUTIONS

14:51 PM, 9th August 2019
About a month ago

Reply to the comment left by Old Mrs Landlord at 09/08/2019 - 14:12
Totally agree with your comments.
In this case there was no Gas in the tenants actual dwelling but central heating in the communal walk way, the case was appealed but I believe that similar cases need to also be appealed.

Annie Landlord

20:10 PM, 9th August 2019
About a month ago

All my tenants have been renting from me for several years. As Old Mrs Landlord says, back then we didn't ask tenants to sign for receipt of the gas cert. Until a couple of years ago the certs were produced on a carbon pad and the fitter left one copy for the tenant, kept one for himself and gave one to me. He now completes them electronically and emails them to me and I now give one to the tenant and ask for a signature. Surely if we need to begin S21 proceedings with a long standing tenant it couldn't be thrown out because 7/8 years ago we didn't request a signature - could it??

Seething Landlord

1:54 AM, 10th August 2019
About a month ago

Reply to the comment left by Luke P at 09/08/2019 - 12:41It is section 2 of "A New Deal for Renting" that gives rise to these concerns, specifically paragraphs 2.30 to 2.34
2.30 The Deregulation Act 2015 contains measures aimed at improving safety in the private rented sector by requiring landlords to have met several safety and best practice standards before being able to use section 21 to end a tenancy.
2.34 Tenants across all sectors must have confidence that their home is safe. The Government intends to carry over the measures detailed above into the new tenancy regime so that tenants can be protected after the assured shorthold regime is removed from the Housing Act 1988. We will also consider applying these protections to all users of the Housing Act 1988, not just those in the private rented sector.
Taken at face value, this could indeed mean that it would be impossible to evict for any reason if the Gas Certificate had not been properly served at or before commencement of the tenancy - the other requirements can be rectified at the moment by e.g. refunding the deposit but it is not inconceivable that even this let out could be removed.
I doubt whether even this Government would intend that a tenant could stop paying rent and yet be protected from eviction but my fear is that it could become an unintended consequence if S8 is revised without proper scrutiny or understanding of all the ramifications as seems to have happened with other laws and regulations. Having said that, what is the justification for making any of the S8 grounds subject to compliance with the so-called "protections"?
Getting the new S8 right, fair and balanced is going to be crucial to the survival of the PRS. The last thing we need is another fiasco such as followed the Superstrike case in relation to prescribed information.
I urge everyone to emphasise the importance of this matter when responding to the consultation - if S21 is to be removed, S8 must be available unimpeded by irrelevant obstacles.

Luke P

9:45 AM, 10th August 2019
About a month ago

Reply to the comment left by Seething Landlord at 10/08/2019 - 01:54
A comment from another forum: “ Govt has no interest in making it easier for tenants to be booted out in rent default cases.
The longer it can legally make LL retain rent defaulting tenants the better as far as it is concerned.
This because it doesn't have to fund housing costs.
LL lose £9 billion a year mostly caused by rent defaulting tenants.
This is £9 billion the Govt DOESN'T have to resource!
It is just a simple fact that the PRS suffers massive losses.
I can't think of a single other industry which loses so much money to non-paying customers.
It is simply not in the Govt best interests to give speedy possession to LL.
If S8 remains no matter how enhanced it will take an average of 20 months to evict.
That will be the end of the mortgaged PRS which is 50% of the market.
Unencumbered LL are OK as they can afford to lose income as they have no mortgage to pay.
It just means they might miss out on a holiday..........big deal!
Mortgaged LL however are in a whole world of hurt.
It just wouldn't be viable to remain a mortgaged LL.
I predict that Govt will do nothing with the S8 process.
So LL will have to endure even longer court processes as there simply aren't enough Courts and Judges to administer all the S8 claims
It was bad enough with S21.
I can see lots of LL jacking up rents via S13 to get rid of tenants using S21 before it is abolished and then going for better quality tenants.
The last thing the Govt will be doing is to invest in facilities which gives LL easier eviction
Just never gonna happen!
LL are deluding themselves if they believe Govt will adjust the S8 process to be similar to S21.”

Seething Landlord

10:49 AM, 10th August 2019
About a month ago

Reply to the comment left by Luke P at 10/08/2019 - 09:45
That is a fairly extreme view but might well prove to be prescient.

Freda Blogs

12:28 PM, 10th August 2019
About a month ago

Reply to the comment left by Luke P at 10/08/2019 - 09:45
@Luke P
"Unencumbered LL are OK as they can afford to lose income as they have no mortgage to pay. It just means they might miss out on a holiday..........big deal!"
Seriously? Is this your view or are you projecting that this might be the government's view?
If the former, I find that statement offensive. Many landlords rely on the rental income for rather more than holidays - so loss of that income IS a big deal and should not be belittled. If properties are unencumbered, most likely it is at the opportunity cost of something else -savings or holidays foregone in the past or simply as a result of hard work.

1 2 3

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Tenant Reform not to be retrospective?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More