Section 21 Changes - Will The Law Be Abolished?

By Jonathan Daines

Unhappy evicted tenants in kitchen with packed boxes

Section 21 Changes – Will The Law Be Abolished?

How drastic will the changes to section 21 be and how are the Government planning to implement this overhaul?

Interestingly the Government appear to be working on two ‘no-fault’ policies concurrently.

Firstly, introducing a ‘no-fault’ reason for ending a relationship between married couples but, at the same time, removing a ‘no fault’ reason for ending a relationship between a landlord and tenant. It is outside the scope of our expertise to consider the merits and demerits of the former.

The Government have announced that, like the Labour party, they intend to put an end to ‘no-fault’ evictions. This comes out of the response to the Government’s own 2018 consultation entitled ‘Overcoming the Barriers to Longer Tenancies in the Private Rented Sector’.

The consultation identified that there was no tenant consensus around ‘mandating a certain tenancy length’. It additionally noted that the response from landlords was for no change to the current position. The alternative to giving the tenant the security of a longer term tenancy is to remove the ability of the landlord to end a tenancy without a genuine and evidenced reason.

Why would you use a section 21 anyway?

Section 21 is currently the only way for a landlord to seek possession where the tenant is either not in breach of the tenancy or one several pre-advised grounds are not available. In order for a section 21 notice to be employed correctly the deposit and prescribed information has to have been dealt with correctly; the relevant How to Rent guide has to have been given; the EPC has to have been given and, where applicable, the gas safety record has to have been given before the tenant occupied the property and renewal certificates given.

A failure to comply with these requirements can invalidate the notice. This does not even take into account ensuring it is not served too early or acted upon too late. Evicting a tenant can be a legal minefield.

The vast majority of tenancies end because the tenant serves notice and many landlords never serve a section 21 notice. There is no reason to as, for the most part, tenants pay the rent on time and look after the property.

For long-term landlords, this is the perfect scenario and a sustainable business model. Anecdotal evidence suggests that section 21 notices are not as used frequently as some would imply and tend to be employed only where, through no fault of the tenant, the landlord requires the property back.

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So what would replace section 21?

Well to be honest nothing. If section 21 changes and is repealed then tenancies would effectively become indefinite and the route for landlords to seek possession would be under section 8 of the Housing Act 1988. Section 8 allows for the landlord to seek possession during either the fixed term or the periodic element of a tenancy under either pre-advised grounds or breach of tenancy grounds.

Of course, an overhaul of section 8 and the Schedule 2 grounds would be required to ensure that landlords can get possession of their property, if, for instance, the landlord wanted to sell. At the moment, in this scenario, the landlord either sells with the tenant in situ or serves a section 21 notice. A new ground in schedule 2 would be required to enable the landlord to claim possession under section 8 on the basis that they want to sell.

Understandably the Government would need to address this specifically otherwise the buy to let sector could falter with landlords not willing to buy into a market that they could not exit from easily and importantly lenders would be reluctant to lend to potential landlords. On top of this, we could see existing landlords seeking to exit the market before the law changes and then where would we be?

The Government will seek the views of interested parties in a consultation due to be launched before the summer. This will be the opportunity for landlords, agents and other interested parties to help shape sensible legislation by putting forward their views not only on what new grounds will be needed but also on the process.

How might section 21 changes be implemented?

Possession proceedings after the expiry of a section 21 notice are in most cases done under an accelerated possession proceeding which is ordinarily a paper process and only requires a court hearing where either more information is required or the tenant raises a defence that the judge needs to understand more fully. A section 8 possession proceeding currently always requires a court hearing.

It is hard to imagine that the courts could cope with existing section 8 proceedings and then those proceedings that would have been dealt with under section 21 proceedings as well. Depending on where in the country the court is will influence the amount of time between the court application and the hearing. Typically it could be a month or more and clearly, the additional workload is only going to increase this time.

An increase in resources is one option, however, we are awaiting the response to housing related call for evidence which ended in January 2019 entitled ‘Considering the case for a Housing Court’. The call for evidence sought to gain an insight into the experience of those who had used the courts for possession processes in relation to the time it took first to get a hearing and then to have the judgement enforced and then also in relation to the complexity of the processes.

The response may provide the Government with the data to decide whether dedicated housing courts could solve delays experienced and help allay the fears that some landlords will have around the loss of section 21. It is not inconceivable that some grounds could be decided without the need for a hearing, for instance, those that are readily demonstrable such as grounds related to non-payment or late payment of rent (as used to be the case with the old N5A form).

We have already identified that the grounds available in Schedule 2 will have to be reviewed. Schedule 2 grounds have been added to in the past and so this is nothing new.

The Government could choose to examine the experience of Scotland which went through a not dissimilar process eventually scrapping their equivalent of section 21 in 2017 and replacing it with a list of reasons why a landlord could bring a tenancy to an end.

The press and tenant pressure groups have made a huge point this week that tenants are fearful of complaining of disrepair in case their complaint is met with a section 21 notice. Landlord groups are right to point out that there is already legislation in place to deal with this in section 33 and 34 of the Deregulation Act 2015 and indeed we have the recently introduced Homes (Fitness for Human Habitation) Act 2018.

The issue, as ever, is the lack of enforcement. One has to ask if one of the reasons that the Government proposed the repealing of section 21 is an admission that enforcement is not working and they have no idea as to how to solve the problem.

We will have to wait for the consultation to know the specific details of the proposals.

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What’s your opinion on this proposed change to section 21? I’d love to hear your thoughts on the proposal – leave a comment and let me know.

About Jonathan Daines

After having worked as a high street letting agent for over 5 years, I believed there was a better way of helping landlords find tenants without the unnecessary expenses. And so in 2008, lettingaproperty.com was born and has since let over 8,000 properties across the country. I am very proud of the service levels we offer and to have achieved a 99.3% recommendation rate on reviewcentre.com. If you have any questions about our business, please do let me know. I look forward to hearing from you.

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Section 21 Changes  - Will The Law Be Abolished?
Article Name
Section 21 Changes - Will The Law Be Abolished?
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What will happen to section 21? A recent announcement by the Government proposes abolishing the legistlation altogether. Let's look at the possible changes.
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Lettingaproperty.com
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9 Comments

    May 16, 2019 REPLY

    I agree, more housing is needed, not more pressure on landlords who will end up having more costs and less chance of legitimately taking their own property back.

    April 27, 2019 REPLY

    I am very uncomfortable with the politicians approach to Landlords.

    This morning an agent advised they have already lost 24 landlords thus reducing available stock whilst in addition they have started to increase rents to compensate for not being able to charge tenants fees from June 2019.
    I don’t think our politicians understand the basic’s of business notably
    Business operation costs are reflected in the price the end customer pays.
    High demand and low supply the end customer pays more…..

    April 23, 2019 REPLY

    Hi NIALL THOMPSON,

    Yes, I agree with you and a tenant can stay in the Landlords property, as long as the rent is paid and failure to pay rent, the tenants should be evicted because we have mortgages to pay on the property.
    Without Landlords out there, there would be housing crisis. If Labour Party wants to give tenants more rights then Labour Party should put down more money to build more houses, which are then rented to those same tenants, who donot pay rents or stop paying rent.
    Niall, in your case, you should have a problem to get your property back because you have a good reason for wanting it back, as this is your only home to move back into from overseas work completion.

    April 22, 2019 REPLY

    I’m a British Diplomat working overseas what do I do if I need to move back into my property when I return from a stint overseas. I am currently renting out my property. The issue I have also the Labour Party seem to hate landlords they act like there super rich people. Most are like me and are not rich. I believe a landlord should be able to kick out a tenant for non payment of rent or destroying property which in many cases is why landlords evict tenants the Labour Party would give more rights to tenants. Landlords go to great expense evicting tenants for non payment of rent and ruining properties.

    April 22, 2019 REPLY

    Whatever happens with Section 21, laws that enable a landlord to gain full possession of a property within 28 days if a tenant does not pay the rent should be introduced. It can easily take 6 months at present , and is at the landlords expense. Further, a default CCJ should then be lodged against that tenant, and an automatic debt to the landlord should be lodged against that tenant . There are very poor laws currently in place protecting landlords from rogue tenants. And local councils encourage this protracted process by advising tenants to stay put until a bailiff arrives – adding up to another 6 weeks to the process in some cases.

    April 22, 2019 REPLY

    Very good

    April 21, 2019 REPLY

    It seems fair that a property owner should be allowed to determine what he does with his property at any one time. 2 to 3 months seems a reasonable time for a tenant to find another property to rent. After all, if a tenant wishes to vacate the property for any reason whatsoever, there is nothing a landlord can do to prevent this happening, It therefore seems unfair not to give a landlord the same power. It does seem that the reasons for getting rid of Section 21 is political rather than practical. Equality for both sides must be the correct recipe. I eagerly await the proposals. Thank you

    April 20, 2019 REPLY

    Good landlords like to update their properties whenever time and circumstances permit.
    If awkward tenants will not allow landlords to gain access to do such work the only way open is to issue a section 21.notice.
    The action the government proposes will stop updating of all rented properties leading to them deteriorating over time.
    Will the Government make a commitment to provide free grants to compensate landlords over a mandatory stipulated period?
    It always seems to be the case where decent landlords suffer because of the few rogues who are not dealt with properly when they are caught.
    What is the point of having a landlords register if they are being bound with legislation that takes away their freedom?
    What about having a designated Council official who can view damage done by rogue TENANTS and stipulate what compensation they will have to pay to the Landlord, so it becomes a fair playing field?

    April 20, 2019 REPLY

    I will definitely sell all my properties if law changes as regards tenants being able to stay indefinitely 3 years minimum

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