Plans to Abolish the Section 21

May 3, 2019 / Industry News

 

Under new plans being discussed by the government the current section 21 could be abolished making it much more difficult for landlords to evict tenants without there being a very good reason to do so.

Under current legislation a landlord can serve a section 21 notice without giving a particular reason and be safe in the knowledge that the tenant legally has to vacate either at the end of the fixed term or after a 2 month notice period if the tenancy has rolled onto a periodic tenancy. A section 21 is only valid if all the correct documentation is in place and all other legal obligations have been met when setting up the tenancy.

Abolishment of the section 21 will mean an increased security of tenure for tenants and the only option available to landlords for evicting tenants will be the section 8. There are strict criteria for a section 8 to be valid such as rent arrears, criminal activity by the tenant or mortgage repossession. Currently a landlord can use a section 8 to regain their property for their own inhabitancy providing that the tenant was given written notice prior to the tenancy starting stating that this might be a possibility in the near future.

The aim of getting rid of the section 21 is to try and prevent retaliatory evictions. There have been cases where tenants have complained about the property and made a fuss about ongoing maintenance issues and then found themselves on the receiving end of a section 21 so the landlord can avoid the cost of maintenance work. Landlords can get away with this behaviour when the rental market is as buoyant as its has been recently with people desperate for properties and then tenants terrified that they are going to lose their home so then put up with substandard condition, for fear of being labelled ‘problem standards’.

As usual it’s a few unreputable people who are causing problems for all the decent landlords. On the whole we find our landlords are willing to fix any maintenance issues, they understand that the tenant is paying rent and has the right to live in a maintained property. Our landlords also understand that for their asset to be an ongoing profitable investment they need to prevent the property from going into disrepair. However, we totally understand that if a tenant is repeatedly late with their rent or fails to pay then a landlord will not want to renew their tenancy and will want to serve a section 21. Often landlords have mortgages to pay and if rent is repeatedly late or not paid then this can be problematic.

Granted a section 8 can be served on the grounds of rent arrears however a tenant needs to be in 8 weeks of arrears before a section 8 can be legally served. This could then take a further month to go through the courts with no guarantees at the end of it. 8 weeks is a long way off someone who is just repeatedly late, however both can be problematic for a landlord.

Proposed changes in legislation to ban a section 21 completely fail to account for a sudden change in circumstances for a landlord. A landlord may not expect to require the property however situations change, and things happen. This may not be applicable to the landlords with investment portfolios but for single property landlords then being in the knowledge that they might not be able to reclaim their property should they need to would be a big worry. A good tenant may be deterred if they are pre warned by their landlord that they might reclaim the property even if the chance of this actually happening is remote.

In my opinion if they are to abolish the section 21 then they need to make amendments to the section 8. Under section 8 there are currently 17 rounds for possession some mandatory and some at the discretion of the courts. Although the landlord, their agent or legal team can serve the section 8, the form must be the prescribed information and must all be filled in correctly, however possession can only be given by a court order and is not automatically assumed after a set period as is the case with a section 21. Courts have the power to postpone or suspend all possession proceedings so there are no time frame guarantees for landlords. Courts are already busy and if they need to grant possession every time a landlord wants to reclaim their property time delays could really mount up. There will need to be circumstances where a section 8 does not automatically need to go through the courts. This will make it both more time and cost effective and a more attractive option to landlords if they can no longer turn to the section 21.

Our fear is that with increased legislation being brought in all time and tax disincentives, landlords will sell up deciding that renting is just too much hassle. With first time buyers coming at a later and later age, people really rely on the private rented sector as there are not enough council houses.