CARIDON PROPERTY LTD -V- MONTY SHOOLTZ

by CARIDON LANDLORD SOLUTIONS

13:58 PM, 8th August 2019
About 2 months ago

CARIDON PROPERTY LTD -V- MONTY SHOOLTZ

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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

12:54 PM, 10th August 2019
About a month ago

Reply to the comment left by Freda Blogs at 10/08/2019 - 12:28
Luke's whole post is quoted from another forum, not his own views.

Freda Blogs

13:15 PM, 10th August 2019
About a month ago

Reply to the comment left by Seething Landlord at 10/08/2019 - 12:54Ah yes, I see that now, thanks. Flipping cheek whoever wrote it!

There is so much anti-landlord feeling everywhere, I don't even discuss that I'm a LL anymore when meeting new people as you don't know whether you'll be faced with hostility - although I'm actually proud of the quality of my properties and the service I provide.

Old Mrs Landlord

13:45 PM, 10th August 2019
About a month ago

Reply to the comment left by Freda Blogs at 10/08/2019 - 13:15
Unsympathetic to landlords as the comments quoted by Luke may be, they are a realistic reflection of commonly held views and it is perfectly true that government is looking for any and every opportunity to pay out less to house those who cannot afford to house themselves. In fact I have a sneaking suspicion that the abolition of Section 21 is not solely aimed at appeasing generation rent and the various housing lobbies but that the ministry officials are well aware that most S.21s are served for rent arrears and if S.8 has to be employed for such cases that will leave evicted tenants open to the accusation of intentional homelessness, thus relieving the local authority of responsibility to rehouse them. Win-win for the government until the public outcry at the explosion in visible homelessness. Of course that will be postponed because of the increased pressure on the courts. Perhaps I am just an old cynic with a very jaded view of politicians.

Luke P

15:48 PM, 10th August 2019
About a month ago

Reply to the comment left by Freda Blogs at 10/08/2019 - 13:15The person that wrote the comment I quoted is an active LL and regular forum user on another site. I think to a certain extent they were writing it as the Government see things.
Personally I think any tenant owing rent should be made to pay every single penny, the problem is that there are many serial offenders and they’d end up with next-to-nothing in benefit if past arrears were deducted. Tough luck, I say but we live in a country where the masters have decided we won’t have masses of people living in the gutters (even if it is of their own making), because MPs and Lords don’t want to see or step over these folk. And whilst they make the rules, they can just prevent deductions being a reality (even attachment of earnings come with an initial ‘protected amount’ before deductions are allowed).
I have just assisted a client with the evicting of two separate tenants owing a total of £14.5k in arrears. There’s no realistic prospect of seeing that money and even if there were, it would take years for them to repay it and be a millstone around their already poor neck. And seeing as it’s only you and me -‘hobby landlord’- missing out, who cares. Don’t let’s make them the Government’s responsibility to house once they’ve got complete rock-bottom!

I would say they should think of the tax HMRC are missing out on to arrears, but I’m pretty certain you’re supposed to pay tax on the due rent, even if you don’t actually collect it (though this is rarely enforced).

Seething Landlord

17:58 PM, 10th August 2019
About a month ago

Reply to the comment left by Luke P at 10/08/2019 - 15:48"but I’m pretty certain you’re supposed to pay tax on the due rent, even if you don’t actually collect it " - my understanding is that is true if you are using the traditional accruals basis for your accounts although you can write off "bad debts" as a tax loss after a reasonable time. However, HMRC have in the last couple of years said that for landlords with turnover below a certain level (£150,000?) the cash basis will be the default method, under which you only account for income received and payments made on the date that each transaction took place,so you are no longer taxed on rent due but not received. On the other hand, if you accept 6 months rent in advance you will be taxed on the whole lot as income for the tax year in which you received it.

Michael Barnes

3:56 AM, 11th August 2019
About a month ago

Reply to the comment left by Annie Landlord at 09/08/2019 - 20:10
Serving GSC before tenant occupies the premises is only a requirement for tenancies that started after the Deregulation Act came into force; I think that is "after 30 September 2015"

Michael Barnes

3:58 AM, 11th August 2019
About a month ago

I think it would be useful if the OP were to use accepted English spellings of the intended words, and not words with close spellings but different meanings from the intended words.

Michael Barnes

3:59 AM, 11th August 2019
About a month ago

It is my understanding (from NearlyLegal site) that another case on the same issue is going to Appeal in January 2020.

Luke P

7:42 AM, 11th August 2019
About a month ago

Reply to the comment left by Michael Barnes at 11/08/2019 - 03:58
Do you mean ‘resurrect’ that I presume should be ‘rectify’?

Old Mrs Landlord

7:52 AM, 11th August 2019
About a month ago

Reply to the comment left by Luke P at 11/08/2019 - 07:42
I thought Michael was probably referring to 'precedence' where precedent is intended, but Central London Country Court rather than County Court is another contender. (I discounted the obvious typo three instead of there.)

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