Landmark Judgment: Coastal Housing Group Ltd & Ors v Mitchell & Ors [2024]

In a landmark decision, the High Court judgment in Coastal Housing Group Ltd & Ors v Mitchell & Ors [2024] EWHC 2831 (Ch) has set a precedent with wide-reaching implications for housing law in Wales. This case revolves around the obligations of landlords under the Renting Homes (Wales) Act 2016 and provides crucial clarifications on landlords’ duties regarding Electrical Condition Reports (ECRs). The judgment also highlights the serious consequences landlords face if they fail to meet these statutory requirements.

We previously wrote about the main changes brought in by the Rent Homes (Wales) Act 2016 here.

Understanding the Renting Homes (Wales) Act 2016

The Renting Homes (Wales) Act 2016, which came into force on 1 December 2022, was a transformative piece of legislation designed to simplify housing laws in Wales. It consolidated various tenancy agreements into a unified legal framework by introducing the concept of “occupation contracts.” Under the Act, landlords are required to ensure that all properties are “fit for human habitation,” a standard that encompasses several safety and habitability requirements. Among these is the duty to provide tenants (or contract-holders) with up-to-date ECRs to verify the safety of the electrical installations in the property.

Failure to comply with this requirement can have significant implications, including rendering the property legally unfit for human habitation. This has the knock-on effect of potentially invalidating the landlord’s entitlement to collect rent during the period of non-compliance.

Background of the Case

The dispute arose when several tenants of Coastal Housing Group Ltd and other registered social landlords alleged that they had not received valid ECRs within the statutory timeframe outlined by the Act. These tenants, now contract-holders under the unified occupation contract system, argued that the landlords’ failure rendered the properties unfit for human habitation. Consequently, they contended that they were entitled to withhold rent for the duration of non-compliance.

The landlords, however, claimed that obtaining ECRs alone satisfied their statutory duty, even if the reports had not been shared with the tenants. This critical distinction became the focal point of the court’s deliberations.

Key Issues Before the Court

The High Court was tasked with determining:

Whether the failure to provide ECRs to contract-holders rendered the properties unfit for human habitation.
If the properties were unfit, whether the tenants were entitled to withhold rent for the duration of the non-compliance.

Court’s Findings

1. Obligation to Provide ECRs

The court firmly rejected the landlords’ argument that merely obtaining an ECR sufficed. It clarified that the statutory requirement is twofold: landlords must ensure the property is electrically safe and deliver a copy of the ECR to the contract-holder. The omission of this second step constituted a breach of the Renting Homes (Wales) Act 2016.

2. Properties Deemed Unfit for Human Habitation

The court ruled that failing to provide an ECR to contract-holders rendered the property unfit for human habitation under the Act. This status persisted for every day the contract-holder was not provided with the ECR. The judgment emphasised that safety and transparency are at the heart of the legislation, and landlords cannot absolve themselves of responsibility by simply commissioning safety checks without informing tenants.

3. Right to Withhold Rent

The court concluded that contract-holders were entitled to withhold rent for the duration of the unfitness caused by the landlords’ failure to provide ECRs. Rent arrears accrued during the period of non-compliance were therefore deemed irrecoverable.

Implications for Landlords

This decision has profound implications for landlords across Wales:

Compliance with the Act: Landlords must ensure that all legal requirements, including the provision of ECRs, are met in full. The failure to share these reports directly with contract-holders can have severe financial consequences.
Fit for Human Habitation Standards: The judgment reinforces the necessity for landlords to maintain high standards of habitability. Compliance is not limited to obtaining certificates or reports—it extends to proactive communication with tenants.
Financial Risks: Non-compliance can result in significant rent losses, as landlords cannot collect rent for periods during which properties are deemed unfit for habitation. This case also opens the door to potential legal disputes and compensation claims from tenants.
Reputation Management: Social landlords, such as housing associations, must consider the reputational risks associated with non-compliance. Beyond the legal and financial consequences, failing to meet tenant obligations can undermine trust and credibility.

Lessons for Tenants

For tenants, or contract-holders, this judgment underscores their rights under the Renting Homes (Wales) Act 2016. It affirms that landlords must comply with their obligations, and tenants are legally empowered to challenge any lapses, particularly concerning safety and habitability.

Conclusion

The Coastal Housing Group Ltd v Mitchell & Ors case represents a pivotal moment in housing law in Wales. It underscores the critical importance of compliance with the Renting Homes (Wales) Act 2016 and establishes clear legal consequences for landlords who fail to meet their obligations. The judgment reinforces tenants’ rights and ensures that safety and transparency remain central to the landlord-tenant relationship.

As landlords navigate this evolving legal landscape, they must prioritise compliance, not only to avoid financial penalties but also to uphold their duty of care to tenants. This case serves as a stark reminder that adherence to housing law is not optional—it is essential for both legal and ethical reasons.

Court of Appeal: Tenant Fees Act 2019