Minister v Hathaway & Anor (2021) EWCA Civ 936

A Court of Appeal judgment on the applicability of the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 to tenancies that pre-date 1 October 2015.

The Hathaways had granted a tenancy to Mr Minister in 2008. In 2009 the tenancy became a statutory periodic and remained so thereafter. In December 2018, the landlords served a section 21 notice, then began possession proceedings in February 2019. It was common ground that no EPC had been provided to the tenant.

As first instance, the District Judge dismissed the claim for possession on the basis that an EPC was required and the s.21 notice was invalid. On appeal, the Circuit Judge overturned the decision, as service of an EPC was not required.

The tenant appealed to the Court of Appeal, which permitted a second appeal “because the issue is one which has divided judges and commentators” (which caused me to raise an eyebrow, but here we are).

The tenant argued that s.41(3) of Deregulation Act 2015 meant that an EPC was required as the tenancy existed on 1 October 2018. S.41(3) reads

(3) At the end of the period of three years beginning with the coming into force of a provision of sections 33 to 38 or section 40, 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 dealt pretty swiftly with this.

The Tenant relies upon the fact that section 41(3) of the 2015 Act provides that section 38 of the 2015 Act inserting section 21A of the 1988 Act applies to any assured shorthold tenancy which is in existence on 1 October 2018, but in my judgment this reliance is misplaced. The consequence of this for present purposes is simply that section 21A can apply to a tenancy which is in existence at that time. Section 21A(1) only bites on such a tenancy if and to the extent that the Secretary of State exercises the power conferred by section 21A(2) to prescribe requirements.

Section 21A(2) does not oblige the Secretary of State to prescribe any requirements at all, and if the Secretary of State did not prescribe any requirements section 21A(1) would not bite on any tenancies. Equally, it would be open to the Secretary of State to exercise the power to prescribe requirements falling within section 21A(2)(a) and/or (b), but not (c), in which case section 21A(1) would bite on tenancies affected by those requirements and not on tenancies only affected by the absence of an EPC.

If the Secretary of State exercised the power conferred by section 21A(2) in an irrational manner, then that could be challenged on public law grounds. No such challenge is advanced in the present case, however.

The absence of such a challenge is not surprising even if procedural considerations are ignored. The Secretary of State exercised the power conferred by section 21A(2) of the 1988 Act by making regulation 2 of the 2015 Regulations. Regulation 1(3) of the 2015 Regulations provides that those requirements only apply to assured shorthold tenancies granted on or after 1 October 2015. At the time that the Secretary of State made the 2015 Regulations, the Secretary of State had no power to go further by virtue of section 41(1) and (2) of the 2015 Act. The inclusion of regulation 1(3) made sure that the reach of regulation 2 did not extend beyond the statutory power as it then was.

From 1 October 2018 the Secretary of State had the power by virtue of section 41(3) to extend the reach of regulation 2 to any assured shorthold tenancy in existence on that date. As noted above, however, the Secretary of State has not exercised that power. If the Secretary of State failed at least to consider whether or not to exercise that power, then there might come a point where that failure could become susceptible to a public law challenge, but it is not suggested that such a situation has yet arisen. Moreover, it would be understandable if the Secretary of State, when considering whether to exercise that power, decided not to do so on the ground that that would place an undue burden on landlords seeking to exercise their section 21 rights in respect of tenancies which were not subject to the requirements imposed by regulation 2 when granted.

So, reg 1(3) of the 2015 Regulations limited the regulations effect to tenancies commencing on or after 1 October 2015. The effect of s.41(3) Deregulation Act 2015 was simply to give the minister the power to make further regulations in respect of other assured shorthold tenancies concerning prescribed information, by way of s.38 Dereg Act/s.21B Housing Act 1988 (as amended). No such regulations had been made. There was no EPC requirement for a valid s.21.

Appeal dismissed.

Comment

This does, of course, apply to all of the 2015 Regulations requirements – EPC, Gas safety Cert, How to Rent guide etc. – with the possible exception of the use of Form 6 as the prescribed form of section 21 notice, which I think was (possibly inadvertently) made a requirement by subsequent regulations.

We knew this, I hope! But the Court of Appeal has made it definite. The suggestion of a possible public law challenge to the Minister’s failure to consider whether or not to make further regulations is interesting, but given the passage of time and the diminishing number of pre 1 October 2015 tenancies, not to mention that it is entirely possible that the Minister did consider whether to, and didn’t, such a challenge seems unlikely.