Implications for Landlords of the repeal of section 21 notice

In 2019, the Government announced “the biggest change to the private rental sector for a generation” with its plans to repeal Section 21 of the Housing Act 1988, putting an end to so-called “no-fault evictions” as part of its ongoing project to improve security of tenure for tenants (1).

It certainly represents a significant change. The repeal of Section 21 would also put an end to assured shorthold tenancies, which are the most common form of tenancy in the English residential rental sector. Section 21 notices can only be served under assured shorthold tenancies, and the government notes that, once Section 21 is abolished, there won’t be any significant legal distinction between an assured shorthold tenancy and an assured tenancy.

Serving a Section 21 notice is the preferred method of letting agents and landlords for the swift repossession of a property, whether or not the tenant is at fault. A survey by Goodlord found that 87% of letting agents had served a Section 21 notice in the past 12 months, whereas only 51% of letting agents had served a Section 8 notice in the same period (2).

Section 8 is generally considered by letting agents and landlords to be a more complicated process for gaining possession of a property for a variety of factors, from the difficulty in gaining possession through the courts, which almost half of landlords had experienced (3) to the mandatory grounds not meeting their needs.

The Government has proposed accelerating the court process for repossession under Section 8 and expanding and amending the mandatory grounds for repossession, which means the court must grant possession of the property if the grounds can be proved.

“Strengthening Section 8 is essential, and it must move to a system of mandatory grounds with anti-social behaviour and rent arrears being top of the priority list,” says ARLA CEO David Cox. “Reform to the justice system is vital, and digitalisation, privatising bailiffs and investing to ensure a properly functioning court system, must be advanced in order that confidence amongst landlords and within the sector is maintained.”(4)

1.“Government announces end to unfair evictions”, gov.uk
2. State of the Industry Report: Summer 2019, Goodlord, goodlord.co.uk
3.“A New Deal for Renting: Resetting the balance of rights and responsibilities between landlords and tenants: A consultation”, gov.uk
4.“Consultation launched on Tenancy Reform in England”, ARLA Propertymark, arla.co.uk

ENDING TENANCIES
There will be a number of potential ways in which a tenancy could be brought to an end under the Government’s proposed framework:
• In a fixed-term tenancy, tenants will be able to end the tenancy after the end of the fixed-term (or at a breakpoint), as long as they provide sufficient notice to the letting agent or landlord in line with their tenancy agreement.
• In an assured periodic (open-ended) tenancy, tenants will be able to end a tenancy at any point, provided they comply with the appropriate notice period.
• In either scenario, letting agents or landlords will be able to end the tenancy by issuing a notice under Section 8 of the Housing Act 1988, providing one of the grounds applies. Source: “A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants”, 2019, gov.uk

Article courtesy of The Goodlord